See how your county is fairing in the regions when it comes to investment prospects. Many odds against Kenya amidst the good words
Ernst & Young's 2011 Africa attractiveness survey identified 17 African countries that will offer attractive Foreign Direct Investment (FDI) opportunities in the next five years.
East Africa
Ethiopia: Research from The Economist shows that Ethiopia was among the 10 fastest growing economies in the world over the past decade. Its gold mines, and the potential to exploit recently found natural gas reserves (currently 25bn cubic meters) will attract significant amounts of investment over the next few years. But poor levels of human capital, a small domestic market, underdeveloped infrastructure and high levels of bureaucracy are all barriers to investment outside of natural resources.
Rwanda: Relative to its African counterparts, Rwanda’s resource endowment is poor; the country has no significant natural resource, and its labour force is small and poorly educated. But offsetting these negatives is Rwanda’s institutional environment. The government has actively tackled corruption in recent years, and the business environment is extremely friendly. Significant investment has been made to improve infrastructure.
Democratic Republic of Congo: The DRC’s oil and mineral reserves are among the riches in Africa, and the sheer potential will continue to attract foreign investment, particularly as demand in the developed and emerging markets rises and capacity constraints are met by other producers. But poor human capital, a small domestic market, primitive infrastructure and an unfriendly business environment will all work against any attempt to attract capital to non-resource sectors of the economy. Above all, the precarious political situation, with the possibility of renewed conflict in the eastern provinces, may limit the attraction of the country to foreign investors.
Kenya: Kenya probably has the most highly developed economy in East Africa. It has a relatively well-educated and rapidly growing labour force, and is most often used as a hub by multinationals looking to develop East African markets. However, its relative lack of natural resources may make it increasingly hard for it to compete with its neighbours, and it’s still small domestic market, immature infrastructure and high levels of bureaucracy are barriers to investment that need to be addressed.
Tanzania: Driven by the rising price of gold that has increased 75% over the last three years, Tanzania’s gold reserves will continue to attract investor interest over the medium term. The country’s relatively well-educated labour force, coupled with political stability and the government’s sound macroeconomic management of the economy, will add to Tanzania’s attractiveness. But the relatively small domestic market, poor infrastructure network and high levels of bureaucracy are a barrier to further investment in the non-mineral sector of the economy.
Uganda: Uganda’s vast mineral resources and a recent discovery of oil will attract significant amounts of investment over the medium term. The country’s relatively well-educated labour force, low levels of bureaucracy and diversified economy will attract funds into the labour-intensive service sector too (e.g., communications and financial services). Offsetting these positive factors are the infrastructure network and the country’s small domestic market. In addition, following the recent disputed presidential election, political risk factors need to be taken into account.
Southern Africa
South Africa: South Africa’s substantial natural resource endowment will continue to attract investors, and its comparatively well-educated labour force will draw funds into the non-resource sectors of its diverse economy. Coupled with this, the domestic market is among the largest in Africa, the population is the richest on average (although extreme income inequality means that many people remain in poverty) and the institutional environment is relatively conducive to business. Despite these overwhelming positives, inflows to South Africa are not expected to be large relative to GDP (around 2% to 2.5%). The economy’s wealth means it can afford to fund much of its own investment, and the country is expected to be a significant source of funds for other African nations over the forecast period.
Angola: Angola’s attractiveness for FDI will remain moderate but is expected to improve between 2011 and 2015. Angola’s oil and mineral reserves will continue to be the main attraction for investors over the next five years. Enriched by the oil wealth, the country’s growing middle class will also be attractive to investors looking for new markets. But current levels of income inequality, skills shortages, underdeveloped infrastructure, and bureaucracy are all hindering efforts to attract foreign investment. As a result most FDI in Angola is likely to be focused on the natural resource sectors for the foreseeable future. Although Angola will receive a significant amount of FDI over the next five years, its expected concentration in the oil sector will limit the job creation prospects.
Mauritius: Mauritius has a well-developed infrastructure network, a highly educated workforce, a comparatively high level of income and low levels of bureaucracy, all of which are attractive to investors. Slightly offsetting these positives are labour market rigidities; in particular, the centralised wage-setting mechanism and high levels of inequality. Despite Mauritius’ positive attributes, it is expected to receive only modest amounts of FDI over the next five years. Better opportunities elsewhere, in particular in countries with large natural resource endowments or larger populations, will attract investors. Despite the modest amount of FDI, the economy’s focus on the service sector means a relatively large number of jobs will be created as a result.
Mozambique: Mozambique’s key attraction for investors is the recently established natural gas reserves, which already stand at over 127bn cubic meters. Coupled with this, significant improvements are being made to the education system and the country’s infrastructure. According to research by The Economist, Mozambique was one of the 10 fastest-growing economies in the world over the past decade, and this growth is likely to be sustained for the foreseeable future. However, the country’s relatively poor population and high levels of bureaucracy (although this too is improving) mean Mozambique will probably remain only moderately attractive to investors over the medium term.
Zambia: Zambia’s copper mines will continue to attract investors over the forecast period, with global demand expected to keep prices high for the foreseeable future. Outside of the minerals sector, prospects for FDI are less good. Zambia’s reliance on copper (which makes it vulnerable to price movements), coupled with its small domestic market, will limit the flow of capital into the rest of the economy. But the country’s business-friendly environment, sound macroeconomic management and investment in the infrastructure network should attract multinational companies into other parts of the economy.
West Africa
Nigeria: Nigeria’s oil reserves (which stood at over 36b barrels in 2007) will continue to attract funds over the medium term, and we expect a large proportion of FDI to be concentrated here. However, the large domestic market and diversified economy mean other sectors such as communications, real estate and tourism will also attract attention. Holding Nigeria back are its relative shortage of key skills, poor infrastructure and high level of bureaucracy. Ongoing perceptions of high political risk should begin to diminish after the elections.
Ghana: Ghana has a sizable resource endowment, including substantial mineral, gas and oil reserves. We expect continued investment in the oil and gas industries, contributing to the majority of FDI flows. Increasing oil revenues should indirectly boost other sectors. This is particularly true of infrastructure, although, if managed correctly, it could help fund improvements in industries such as health care and education. Ghana benefits from a stable political environment, with democracy well established and adhered to. However, Ghana needs to continue to invest in infrastructure, human capital and health care to attract more diversified FDI projects.
Senegal: Senegal has a sizable resource endowment, and its mineral resources make it an attractive location in which to invest. We expect continued investment in mineral extraction, contributing to the majority of FDI flows. Senegal also benefits from a stable political environment, with democracy well established and adhered to. A range of economic reforms have fostered a stable macroeconomic environment. However, improvements need to be made regarding human development, the business environment and infrastructure, for FDI to grow substantially.
North Africa
Egypt: Egypt oil production is expected to fall as reserves mature and run dry, but the fossil fuel sector is still expected to attract investors over the next five years. Bigger attractions for investors are Egypt’s large, relatively well-educated population, sizeable domestic market and proximity to Europe. Slightly offsetting these positives are the high levels of bureaucracy and corruption, but recent government reforms in these areas should improve the institutional environment. Assuming that the political situation is resolved and reforms are continued, Egypt will remain an attractive destination for investors in the next five years.
Thursday, June 23, 2011
Wednesday, March 16, 2011
imapct of social media on business
While social media has infinite potential to do wonders for your business, it also has the potential to cause a catastrophe. “A hazard of social media is that people will read what you write. Your error will be multiplied in its impact by the trail of online wreckage it creates,” said Marla Erwin, the inthttp://www.blogger.com/img/blank.gifehttp://www.blogger.com/img/blank.gifractive art director for Whole Foods Market.
Companies such as Amazon, United Airlines, Pepsi, Chipotle and Motrin have made mistakes resulting in unprecedented ramifications, thanks to customer feedback via social media. Companies can stave off a social media disaster by being cautious and vigilant, and responding swiftly to crisis. Some of Erwin’s tips:
* Fight social media fire with social media water. Be it Facebook, Twitter or another network, always make sure you are in the same medium as your customers.
* Context matters. If you are responding to a tweet, make sure you aren’t responding to the final of a series of tweets, as you could end up looking foolish.
* Apologies matter. If you are going to apologize to your customers, you’d better mean it.
* Don’t bite the hand that feeds you. Don’t mock or belittle your customers. It’s a bad move.
* It matters who steers the ship. It pays to trust your staff, but make sure the person running your social media front has the sensibility and the training that you can rely on.
* Avoid “The Streisand Effect.” Sometimes, you are the problem. By trying to cover up or mend mistakes, you may be perpetuating them. Focus efforts on shutting down, not causing, the media hype.
Adopted from smartblog
Is your company properly responding though its social media channels?
Companies such as Amazon, United Airlines, Pepsi, Chipotle and Motrin have made mistakes resulting in unprecedented ramifications, thanks to customer feedback via social media. Companies can stave off a social media disaster by being cautious and vigilant, and responding swiftly to crisis. Some of Erwin’s tips:
* Fight social media fire with social media water. Be it Facebook, Twitter or another network, always make sure you are in the same medium as your customers.
* Context matters. If you are responding to a tweet, make sure you aren’t responding to the final of a series of tweets, as you could end up looking foolish.
* Apologies matter. If you are going to apologize to your customers, you’d better mean it.
* Don’t bite the hand that feeds you. Don’t mock or belittle your customers. It’s a bad move.
* It matters who steers the ship. It pays to trust your staff, but make sure the person running your social media front has the sensibility and the training that you can rely on.
* Avoid “The Streisand Effect.” Sometimes, you are the problem. By trying to cover up or mend mistakes, you may be perpetuating them. Focus efforts on shutting down, not causing, the media hype.
Adopted from smartblog
Is your company properly responding though its social media channels?
Tuesday, March 1, 2011
Entrepreneurship in Africa
In the last few months, the number of entrepreneurship workshops and trainings in Africa has increased. Entrepreneurship has become the next big thing in the continent and many young graduates are opting to take risks and run startups rather than seek traditional employment. New to Africa is that these new class of entrepreneurs are well-accepted by the society. The path of getting a college degree to work for banks, mines, and big companies is making way for one where graduates could pursue their passions — no matter how small.
A good number of the young entrepreneurs from Lagos to Nairobi are inspired by what is happening in Silicon Valley more than what is going on in their own neighborhoods. The social media sector in Africa can be divided into three groups. The first works to clone what already exists — like Facebook and Twitter. The second develops useful technologies and makes them free. The third belongs to the core entrepreneurial class with viable business ideas.
Unfortunately, the last group is not getting much help. The reason has to do with a lack of entrepreneurial funding climate in the continent. Investors cannot put money into most ideas because the exit strategy is limited. Also, most rich Africans, politicians and military generals, have not made their wealth through investing so they are not traditionally good sources for funding. Another big challenge is Africa's immature intellectual property rights environment, which continue to stifle incentives for invention. Why invest in something that can be copied without any consequence?
Here are some thoughts on how best to nurture entrepreneurs in Africa:
Funding: While it is good to travel from the U.S. and Europe to run workshops on entrepreneurships in Africa, what matters most is funding. There are many local NGOs running these programs, but unless someone has money to invest in the best entrepreneurial ideas, nothing happens.
Mentoring: Young African entrepreneurs need business mentors. In most communities, the richest people are still politicians and military men. It's hard to finding businesspeople who can inspire.
Monetization: Young entrepreneurs need to learn that giving away their products for free may not work most times. Rather, they should invest time to find how to monetize their ideas and use the revenue to grow. Building free apps hurts local industry. What works in the U.S. may not work in Africa.
Think Local: While building a Facebook clone could be exciting, it does not have much prospect for success. Most people will not leave Facebook and join the local one. That energy can be used to create a local app.
Segregate Websites: In this area of acquisitions, it makes sense to build multiple websites for different core ideas. That will help the startup sell each unit independently. When one site hosts all the ideas, untangling them during acquisitions could be difficult. Thinking how to exit at the beginning is very important.
source. HBR
A good number of the young entrepreneurs from Lagos to Nairobi are inspired by what is happening in Silicon Valley more than what is going on in their own neighborhoods. The social media sector in Africa can be divided into three groups. The first works to clone what already exists — like Facebook and Twitter. The second develops useful technologies and makes them free. The third belongs to the core entrepreneurial class with viable business ideas.
Unfortunately, the last group is not getting much help. The reason has to do with a lack of entrepreneurial funding climate in the continent. Investors cannot put money into most ideas because the exit strategy is limited. Also, most rich Africans, politicians and military generals, have not made their wealth through investing so they are not traditionally good sources for funding. Another big challenge is Africa's immature intellectual property rights environment, which continue to stifle incentives for invention. Why invest in something that can be copied without any consequence?
Here are some thoughts on how best to nurture entrepreneurs in Africa:
Funding: While it is good to travel from the U.S. and Europe to run workshops on entrepreneurships in Africa, what matters most is funding. There are many local NGOs running these programs, but unless someone has money to invest in the best entrepreneurial ideas, nothing happens.
Mentoring: Young African entrepreneurs need business mentors. In most communities, the richest people are still politicians and military men. It's hard to finding businesspeople who can inspire.
Monetization: Young entrepreneurs need to learn that giving away their products for free may not work most times. Rather, they should invest time to find how to monetize their ideas and use the revenue to grow. Building free apps hurts local industry. What works in the U.S. may not work in Africa.
Think Local: While building a Facebook clone could be exciting, it does not have much prospect for success. Most people will not leave Facebook and join the local one. That energy can be used to create a local app.
Segregate Websites: In this area of acquisitions, it makes sense to build multiple websites for different core ideas. That will help the startup sell each unit independently. When one site hosts all the ideas, untangling them during acquisitions could be difficult. Thinking how to exit at the beginning is very important.
source. HBR
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