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Africa Progress Report 2013 – Equity in Extractives: Stewarding Africa’s natural resources for all

 “Africa loses twice as much in illicit financial outflows as it receives in international aid. It is unconscionable that some companies, often supported by dishonest officials, are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximize their profits, while millions of Africans go without adequate nutrition, health and education.”                                                                                                                                                                           Kofi A. Annan, Chair of the Africa Progress Panel.

For much of the region’s history, Africa’s resource wealth has been plundered and squandered. It has served the interests of the few, not the many. Revenues that could have been used to improve lives have instead been used to build personal fortunes, finance civil wars, and support corrupt and unaccountable political elites. This report has a simple message: history does not have to repeat itself. Today, Africa’s governments have a unique window of opportunity to convert natural resource wealth into a catalyst for poverty reduction, shared prosperity and accelerated human development.

This year’s Africa Progress Report rejects the view that Africa is blighted by a “resource curse” – an affliction that automatically consigns the citizens of resource-rich nations to a future of economic stagnation, poverty and poor governance. There is no curse. The malaise that has afflicted natural resource management in Africa is caused by the wrong domestic policies, weak investment partnerships and failures in international cooperation. Lifting that affliction will require decisive leadership by African governments, backed by multilateral action and a commitment by foreign investors to adopt best international practices.

Mapping Africa's Natural Resource Wealth: Selected Countries and Commodities

Mapping Africa’s Natural Resource Wealth: Selected Countries and Commodities

There is cause for optimism. Global market conditions point to another decade of high prices for natural resources, creating an environment conducive to economic growth. The policy environment has also improved. Strengthened public finance management has enabled Africa to escape the boom-bust cycle associated with past upswings in commodity markets. There have been moves towards greater transparency and accountability – the twin pillars of good governance in natural resources. New legislation in the United States and the European Union will add further impetus to these moves. Many companies are now looking beyond short-term profits and towards long-term investment partnerships. These companies recognize the economic, as well as the ethical, case for strengthening linkages to local firms, for social and environmental impact assessments, and for engagement with local communities.

None of this is to understate the risks and challenges that come with Africa’s ongoing resource boom. Surges in revenue have to potential to destabilize budget planning. Governments must make tough choices over how much to spend today and what to save for the future. There are risks that the fragile and, in some countries, still limited moves towards more open budget systems and enhanced disclosure in state extractive companies will be reversed. The Africa Progress Panel is concerned at foreign investors extensive use of offshore companies, shell companies and offshore jurisdictions. And much of Africa remains trapped in a pattern of exporting raw materials, with few countries successfully breaking into manufacturing and processing. None of this is inevitable – and our report demonstrates that the alternatives are practical, achievable and affordable.

Published every year, the Africa Progress Report is the Africa Progress Panel’s flagship publication. The report draws on the best research and analysis available on Africa and compiles it in a refreshing and provocative manner. Through the report, the Panel recommends a series of policy choices and actions for African policy makers who have primary responsibility for Africa’s progress, as well as international partners and civil society organizations.

You can download the full report here [120 pages, 4.5MB]

You can also download a summary of the report here [24 pages, 1.4MB]

For more details about the report and the panel visit the official African Progress Panel Website  here

 
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Posted by on May 10, 2013 in Africa, Economy, Leadership, Politics

 

Does South Africa Really Understand Africa?

If South Africa is nothing like the rest of Africa, what claim does it have to be its gateway, let alone its leader? Does South Africa even understand Africa?

By Eliot Pence

South Africa has spent over a decade defining itself as different from the rest of Africa. Now, as its foreign policy pivots back to Africa and seeks to cash in on the continent’s growth, the country has sought to define itself as the leader of, and commercial gateway to, the continent. But the differences between South Africa and the rest of Africa are stark. If South Africa is nothing like the rest of Africa, what claim does it have to be its gateway, let alone its leader? Does South Africa even understand Africa?

There are a number of reasons why South Africa should be a leader in Africa. It’s the continent’s largest economy and home to its most sophisticated financial system. It has a constitution that is inclusive and progressive. But increasingly South Africa is misunderstanding the opportunities and challenges of the continent, even as it professes an interest in them.

As inbound investors steer away from Johannesburg, and the rest of the continent focuses its attention on capturing growth opportunities, South Africa’s lawmakers concentrate more and more on fundamentally different concerns: resuscitating anaemic growth, unlocking paralyzed labour markets, and balancing its obligations to country-club affiliations like BRICS and IBSA.

South Africa’s central claim as a ‘gateway’ to Africa rests on the assumption that it offers investors a secure and sophisticated landing pad filled with local partners able to take foreign investors into a rapidly expanding continental market …continue reading

 
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Posted by on November 28, 2012 in Africa, Economy, South Africa

 

One Man, One Computer, 10 Million Students: How Khan Academy is Reinventing Education

Salman Khan the founder of Khan Academy as seen on the cover of Forbes Magazine

By  Michael Noer of Forbes

The headquarters of what has rapidly become the largest school in the world, at 10 million students strong, is stuffed into a few large communal rooms in a decaying 1960s office building hard by the commuter rail tracks in Mountain View, Calif. Despite the cramped, dowdy circumstances, youthful optimism at the Khan Academy abounds. At the weekly organization-wide meeting, discussion about translating their offerings into dozens of languages is sandwiched between a video of staffers doing weird dances with their hands and plans for upcoming camping and ski trips.

Pivoting, Salman Khan, the 36-year-old founder, cracks a sports joke appropriate for someone who holds multiple degrees from MIT and Harvard.

It involves LeBron James (a Khan Academy fan), three-point shots and sophisticated algorithms called Monte Carlo simulations. The company’s 37 employees, mostly software developers with stints at places like Google and Facebook, are the types who know when to laugh. And they do.

It’s a prototypical Silicon Valley ethos, with one exception: The Khan Academy, which features 3,400 short instructional videos along with interactive quizzes and tools for teachers to chart student progress, is a nonprofit, boasting a mission of “a free world-class education for anyone anywhere.” There is no employee equity; there will be no IPO; funding comes from philanthropists, not venture capitalists.

“I could have started a for-profit, venture-backed business that has a good spirit, and I think there are many of them–Google for instance,” says Khan, his eyes dancing below his self-described unibrow. “Maybe I could reach a billion people. That is high impact, but what happens in 50 years?”.

It’s a fair question, with an increasingly sure answer: The next half-century of education innovation is being shaped right now. After decades of yammering about “reform,” with more and more money spent on declining results, technology is finally poised to disrupt how people learn. And that creates immense opportunities for both for-profit entrepreneurs and nonprofit agitators like Khan.

How immense? According to a report from the President’s Council of Economic Advisers, global spending on education is $3.9 trillion, or 5.6% of planetary GDP. America spends the most–about $1.3 trillion a year–yet the U.S. ranks 25th out of the 34 OECD countries in mathematics, 17th in science and 14th in reading. And, as in so many other areas of American life, those averages obscure a deeper divide: The U.S. is the only developed country to have high proportions of both top and bottom performers. About a fifth of American 15-year-olds do not have basic competence in science; 23% can’t use math in daily life.

It’s those latter statistics that motivate Khan. The site covers a staggering array of topics–from basic arithmetic and algebra to the electoral college and the French Revolution. The videos are quirky affairs where you never see the instructor (usually SalmanKhan himself, who personally has created nearly 3,000 of them). Instead, students are confronted with a blank digital blackboard, which, over the course of a ten-minute lesson narrated in Khan’s soothing baritone, is gradually filled up with neon-colored scrawls illustrating key concepts. The intended effect is working through homework at the kitchen table with your favorite uncle looking over your shoulder.

Or make that the planet’s favorite uncle. Over the past two years Khan Academy videos have been viewed more than 200 million times. The site is used by 6 million unique students each month (about 45 million total over the last 12 months), who have collectively solved more than 750 million problems (about 2 million a day), and the material, which is provided at no cost, is (formally or informally) part of the curriculum in 20,000 classrooms around the world. Volunteers have translated Khan’s videos into 24 different languages, including Urdu, Swahili and Chinese.

“Sal is the world’s first superstar teacher,” says Yuri Milner, the Russian physicist turned venture capitalist who was an early investor in Facebook, Twitter and Groupon.

Beyond admirers like Milner, Khan’s meteoric success has attracted the financial support of a bevy of high-profile, socially minded backers, including Ann Doerr, the wife of billionaire venture capitalist John Doerr; Bill Gates; Netflix CEO Reed Hastings; NewSchools Venture Fund, whose CEO is the former president of the California State Board of Education; and Google, whose chairman, Eric Schmidt, serves on the academy’s board. In total Khan has raised $16.5 million, with assurances of more to come.

“The numbers get really crazy when you look at the impact per dollar,” says Khan. “We have a $7 million operating budget, and we are reaching, over the course of a year, about 10 million students in a meaningful way. If you put any reasonable value on it, say $10 a year–and keep in mind we serve most students better than tutoring–and you are looking at, what, a 1,000% return?”

Even in Internet terms that’s impressive for an organization that 24 months ago consisted of one man working alone in a walk-in closet and 12 months prior to that was the oddball hobby of an intellectually hyper-active hedge fund analyst. But Salman Khan’s ambitions go much further. “Now that there are these tools, where students can learn at their own pace and master the concepts before moving on, can we rethink this educational model that has been standard practice for hundreds of years?”

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Internet-based technology long ago figured out how to revolutionize and democratize everything from retail to auctions to maps. So what took so long to disrupt perhaps the largest, most dysfunctional field of all? …Continue reading

 
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Posted by on November 11, 2012 in Economy, Education, Learning, Teaching, Technology

 

How to Rob Africa: Why does the Western world feed Africa with one hand while taking from it with the other?

The world’s wealthy countries often criticise African nations for corruption – especially that perpetrated by those among the continent’s government and business leaders who abuse their positions by looting tens of billions of dollars in national assets or the profits from state-owned enterprises that could otherwise be used to relieve the plight of some of the world’s poorest peoples.

Yet the West is culpable too in that it often looks the other way when that same dirty money is channelled into bank accounts in Europe and the US.

International money laundering regulations are supposed to stop the proceeds of corruption being moved around the world in this way, but it seems the developed world’s financial system is far more tempted by the prospect of large cash injections than it should be.

Indeed the West even provides the getaway vehicles for this theft, in the shape of anonymous off-shore companies and investment entities, whose disguised ownership makes it too easy for the corrupt and dishonest to squirrel away stolen funds in bank accounts overseas.

This makes them nigh on impossible for investigators to trace, let alone recover.

It is something that has long bothered Zimbabwean journalist Stanley Kwenda – who cites the troubling case of the Marange diamond fields in the east of his country.

A few years ago rich deposits were discovered there which held out the promise of billions of dollars of revenue that could have filled the public purse and …Continue reading

 
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Posted by on November 9, 2012 in Africa, Economy

 

Brazil in Africa: A new Atlantic alliance

IN THE sweaty heat of northern Mozambique, Vale, a Brazilian mining giant, is digging up coal at its mine near the village of Moatize. A 400,000-tonne mound sits ready to burn. The mine can churn out 4,000 tonnes an hour but the railways and ports cannot cope. Vale is working to improve a line through Malawi to take the coal for export. OAS Construtora, another Brazilian firm, has signed a deal with the miner to build part of a new port at Nacala, 1,000km (620 miles) to the north-east, to do the same.

The continent is an important part of Vale’s future, enthuses Ricardo Saad, the firm’s Africa boss. He is not alone in his excitement about Brazil’s prospects. Relations with Africa flourished during the presidency of Luiz Inácio Lula da Silva. He travelled there a dozen times and African leaders flocked to Brazil. His zeal was in part ideological: he devoted much of his diplomacy to “south-south” relations—at the cost, critics say, of neglecting more powerful (and richer) trade partners, such as the United States.

Lula stressed his country’s “historic debt” to Africa, a reference to the 3.5m Africans shipped to Brazil as slaves. Outside Nigeria, Brazil has the world’s biggest black population. Dilma Rousseff, Brazil’s current president, is continuing those policies—though with more emphasis on how the relationship benefits Brazil. There are many ways that it can. Africa needs infrastructure and Brazil has lots of construction firms. Africa sits on oil and minerals in abundance; Brazil has the firms to get them out. Its agribusiness giants are also eyeing up Africa. If the continent’s economy continues to grow as it has in recent years, it will produce millions of customers much like Brazil’s new middle class.

Brazilian businesses seem keen. In 2001 Brazil invested $69 billion in Africa …Continue reading

 
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Posted by on November 9, 2012 in Africa, Economy

 

The rise of the African consumer: A report from McKinsey’s African Consumer Insights Centre

By now, most investors and businesses know about the tremendous potential of Africa—the world’s second-fastest-growing region, topped only by emerging Asia. But it may come as a surprise that Africa’s growth is fueled not by resources but rather by a rising consumer market.

The continent’s consumer-facing industries are expected to grow by $400 billion, representing its single-largest business opportunity, by 2020. But many companies don’t know how to translate this potential into action, because of a dearth of market research. That, however, is changing. In one of the first studies of its kind, McKinsey’s Africa Consumer Insights Center surveyed 13,000 consumers in ten African countries, with a focus on the largest cities. Five categories of consumption were covered: apparel, financial services, groceries, the Internet, and telecommunications.

Several factors are shaping this new consuming class. …Continue reading

 
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Posted by on November 9, 2012 in Africa, Economy

 

The Global Competitiveness Index 2012–2013: Country Profile: South Africa

South Africa is ranked 52nd this year, remaining the highest-ranked country in sub-Saharan Africa and the third-placed among the BRICS economies. The country benefits from the large size of its economy, particularly by regional standards (it ranks 25th in the market size pillar). It also does well on measures of the quality of its institutions and on factor allocation, such as intellectual property protection (20th), property rights (26th), the accountability of its private institutions (2nd), and its goods market efficiency (32rd). (Click and zoom the image for a clear view)

Particularly impressive Continue reading…

 
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Posted by on November 1, 2012 in Economy, South Africa

 
 
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We all posses just enough to be our greatest self