64 posts tagged south south
64 posts tagged south south
Vice President Paa Kwesi Bekoe Amissah-Arthur on Thursday appealed to the Brazilian investor community to consider Ghana’s strategic position within the West Africa sub-region and work together to develop her economic potentials.
He said there were huge potentials for Ghana’s economic growth and government was ready to team up with investors and provide opportunities for the generation of power. At a meeting with a Brazilian business delegation, led by Ms Irene Vida Gala, the Brazilian Ambassador to Ghana, the Vice President said the Government of Ghana was ready to collaborate with investors to tap into Ghana’s rich investment potentials within the overall national development agenda.
Vice President Amissah-Arthur noted that there were similarities between Ghana and Brazil and added that Ghana “was happy to meet with people of the Southern hemisphere.”
Cashew accounts for more than 90 percent of Guinea-Bissau’s export earnings. Almost the entire crop is exported to India, particularly to Kerala, for processing.
“If you establish a company in Guinea Bissau, you can have free access to a big market that numbers 300 million inhabitants in the case of ECOWAS, and 100 million in the case of the monetary union,” said de Barros.
Guinea-Bissau is a member of two regional economic groupings - Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (UEMOA).
“Companies from both countries should work together to set up processing factories so that jobs are also created,” he said, adding that Guinea Bissau could be the gateway for Indian businesses to West Africa.
Pointing to India’s knowledge and human resource base, he said Guinea-Bissau, a country of 1.5 million bordered by Senegal, Guinea and the Atlantic Ocean, required knowledge and technology from India.
“We want India to be a part of the development of Guinea-Bissau. I think South-South cooperation is better for both parties.”
1. Dependency on Europe is reducing
“The first trend is that the dependency on Europe is changing quite significantly,” said Brewer. “Historically Europe was a main trading partner for Africa.”
While Europe-Africa trade has decreased in recent years, Brewer said that it is still a key player in African trade, with countries such as the UK and Belgium (and other old colonial powers) still being important markets for Africa.
“So those countries still sit very prominently as trading partners but the dependency is becoming a little less, which I personally think is a good thing.”
This dependency on European trade is diminishing for a number of reasons.
“Firstly because the European economy has been absolutely sick as a dog for the last few years,” said Brewer. The Eurozone crisis has notably affected trade with Africa, but this has come alongside an increase in trade from other emerging markets such as Asia and, in particular, China.
2. Africa is gaining a broader spectrum of trading partners
“Our trade with Asia, which is the second point, is growing significantly and in fact in 2011, trade between South Africa and China grew at 77%,” highlighted Brewer.
“So it’s growing at an incredibly rapid rate.”
China has become Africa’s number one trading partner in recent years, which is one of the reasons why the economic powerhouse has also become a major investor in African transport and logistics infrastructure.
In addition Brewer said that other BRICS economies – such as India, Brazil and South Africa – are also increasing their trade with the continent.
“And of course the US is still a very important market.” “Ideally you want to have a nice broad basket of trading partners,” he added. “And I think Africa is becoming broader in terms of its trading partners.”
3. Manufacturing beginning to come to Africa
“While in Asia, America and Europe, 70% of what is produced stays in those continents, for Africa it is less than 15%, which is staggering, if you think about it,” stressed Brewer.
“You’ve got these three regions with 70% of what they have produced staying in their own continent, but here it’s less than 15%.”
Whether it is electronics, vehicles or medical equipment, Africa has to rely on importing these products from other places in the world. One of the ramifications of this is that companies and consumers have to suffer the price increases to cover transport and logistics costs in Africa.
“There is not a lot of production happening in Africa today. It is going to change but today that is the reality,” said Brewer. “So contextually our trading partners outside of Africa are more important than our trading partners in Africa, but that is changing and you have countries like Ghana, Mozambique, Ethiopia, Uganda, South Africa, Nigeria particularly, and Liberia, growing very rapidly.”
“So that’s the current climate and I think it is going to change, and the next step for Africa is production coming to Africa,” he added.
Zhai made the remarks during a briefing on President Xi Jinping’s upcoming visits to Russia, Tanzania, South Africa and the Republic of Congo, which will take place from March 22 to 30.
Xi is also scheduled to attend the fifth BRICS leaders’ meeting, which will feature the leaders of Brazil, Russia, India, China and South Africa. Zhai said one million Chinese are now doing their business in Africa and there are thousands of Chinese companies there, adding that many entrepreneurs will attend activities to be held during Xi’s visit.
China and Africa regard each other as development opportunities and both sides have strong willingness to further strengthen cooperation, Zhai said.
Trade between North Africa and Korea also exploded in the past five years. As latecomers to North Africa, Korean corporations now recognize the strategic importance of consumer and resource markets in the Middle East and North Africa (MENA).
Korean government is presently finalizing an FTA with Turkey, and exploring potential FTAs with Morocco and the Gulf Cooperation Council. While trade between North Africa and Korea currently represents only 2-3% of each other’s overall trade volumes ($22 billion in 2011), it grows over 20% annually.
FDI of Korean corporations in North Africa – construction of refineries, plants and research facilities by extraction, resource processing, telecommunications and technology companies – reaches tens of billions of dollars (presently $400 million annually).
European and Korean governments play an important part in the deepening of trade relations with North Africa. Korean government is active in ‘resource diplomacy,’ promotion of business exchange, and development assistance.
Korea-Africa Economic Cooperation (KOAFEC), a bilateral trade and development program, was set up in 2006, and Korea Business Centers popped up in several African countries to explore venture opportunities.
European Commission also seeks closer economic integration between the EU and North African countries, and provides North Arica with hundreds of millions of dollars in development funds under the European Neighborhood Policy.
Malik pointed out that the 2013 HDR identifies more than 40 developing countries – on all continents – that have performed much better than would have been predicted in HDI terms over the past two decades, with this progress accelerating notably in most since 2000, he added.
The study says the South is “developing at a pace unprecedented in human history, with hundreds of millions of people lifted out of poverty, and billions more poised to join a new global middle class.”
Asked if this phenomenon is largely confined to just the three leading countries while most developing nations are still lagging far behind in alleviating or eradicating poverty, Malik singled out the 40 countries categorised as being among the “human development high achievers”.
The 40 countries include Bangladesh, Chile, Ghana, Indonesia, Malaysia, Mauritius, Mexico, Rwanda, South Korea, Thailand, Tunisia, Turkey, Viet Nam and Uganda.
Malik said the HDR looks in greater detail at 18 of the 40 countries, and their paths to human development improvement.
He pointed out that the 2013 HDR also looks at the potentially highly positive impact of this phenomenon on today’s 47 least developed countries (described as the poorest of the poor), which include new markets, new sources of investment, better access to appropriate technologies, and, most important, many useful policy lessons.
“And while a number of low-income countries will miss their own national goals of halving extreme poverty by 2015, it is important to emphasise that the world as a whole has already met this target ahead of time, largely due to massive poverty eradication in many of the leading South nations since 1990,” he added.
Excerpts from the interview follow.
“We are realising that it is not just about price but also quality that is standing out for Indian imports, and this is something that can definitely be sustained in the near-term. Regional proximity of India also makes it easy to travel to and to transport goods to Kenya,” Tiberius Barasa, the executive director of the Centre for Policy Research, a governance and public policy analysis think-tank, said in a recent interview.
Chinese imports value was second at Sh167.2 billion, followed by the United Arab Emirates’ Sh150 billion worth of imports. Import value from the UAE of Sh28.5 billion in March was the highest recorded in a single month in 2012.
Kenya, a net importer of capital goods, has in recent years turned to Asia and fellow African countries for external trade, shifting away from its traditional European source markets with declining trade volumes.
Branching out across the region has become a vital strategy for African companies wrestling with how to thrive on a continent of small and fragmented markets. Many western multinationals have sat on the sidelines as African economies have expanded, leaving the door open for domestic players to build a pan-African presence. But the competition is now intensifying.
The trend has been most pronounced in South Africa, home to nearly half the continent’s largest 40 companies by market capitalisation. Many of them are leading a charge across the Limpopo River, expanding into less developed neighbouring countries.
Other African companies, particularly from Nigeria and Kenya – the economic powerhouses in the west and east – are following suit as they seek to dominate various sectors in their regional hinterland and beyond.
“China is no longer an option,” she says. “We are dealing with a new reality.
The world is so heavily debt-ridden and those companies reliant on old money sources are doomed to stagnate, downsize, face acquisition or ultimately succumb to bankruptcy.
“In light of the 2008 post-recession shockwaves, how can any company refuse to switch gears and adapt to the new reality at hand.
Some companies foresaw the rise of Asia and positioned themselves to trade with, source from, or serve Asian markets like China.
But that represents only a small percentage of businesses who managed to align their long-term ambitions with Asia.
“Africa has failed to secure a larger slice of the huge investment potential China has and is continuously making on the continent. Teams going out to negotiate and market on behalf of Africa are not composed of the perfect mix of talent, personalities and synergy needed to maneuver Chinese deal-making sessions.
We’re not doing it right as a continent. Africa is using Euro-centric perceptions to negotiate a whole different playing field and it is not working.”
In the future, Rwese hopes to join an international team of management experts devoted to designing solutions for clients tapping into Chinese consumerism.
She believes much more work needs to be done for the country to reap the benefits of China’s growing outbound tourism to her homeland.