The largest free trade area in the world, with a combined GDP of $3.3 trillion, came into effect on the first day of 2021. A look at what exactly implementation of a deal of this magnitude means.



By Paula Slier and Sasha Star



AFRICA’S TRADE RELATIONSHIPS HAVE BEEN irreversibly affected by three events – the Covid-19 pandemic and two important trade agreements.



At midnight on 31 January 2020, the withdrawal of the United Kingdom (UK) from the European Union (EU) officially came into force. The decision – Brexit – made by 52% of the British population resulted in the EU losing its second-largest economy and the Union Jack isolating itself in terms of trade, effectively quarantining in its own home. But for Africa, the move holds opportunities. Untapped export potential to the UK is large as is untapped UK export to Africa; the latter is worth more than $8 billion.



Yet, it is the new trade agreement implemented in Africa where interest should really be directed; 54 of the 55 African Union states on the continent have signed up for the African Continental Free Trade Area agreement (AfCFTA) which came into effect on the first day of 2021. Eritrea is the only country that chose to sit out – and there are various explanations as to why not unconnected to power and politics.



By creating the largest free trade area in the world, 1.3 billion people are now set to benefit from the elimination of tariffs on most goods, the liberalization trade of key services and the address of non-tariff obstacles to intraregional trade. The AfCFTA is estimated to bring Africa annual income gains of more than $130 billion per year.



The deal could not have come at a better time, though this was hardly factored in when the agreement was originally brokered in March 2018. Covid-19 has substantially impacted Africa’s tourism sector that accounts for much of its revenue— particularly for smaller nations — while the trade of goods, oil, and even food has also declined significantly as a result of the novel coronavirus.



“The pandemic has presented a historic opportunity to build a better future,” says the African Department of the International Monetary Fund (IMF). It stresses that “trade integration, along with domestic reforms to improve revenue mobilization, digitalization, competition, social safety nets, and climate-change mitigation, will be critical for the region’s resilience, growth and job creation”.



An extensive reduction of tariffs is the first step towards this. With 90% of taxed intraregional trade flows being contracted under the AfCFTA, current flows are due to increase by around 16%, or $16 billion.



“The AfCFTA, if implemented as laid out in papers, would usher an economic progression that would make China’s remarkable economic transformation look basic,” claims Ibrahim Anoba, the Managing Editor of AfricanLiberty.org.



“We’re talking about a continent with a consumer market as large as China but with a superior mineral and natural resources concentration.” The potential of the AfCFTA is enormous, but, as Anoba points out, this all depends on the players in the game. “The different thing about the AfCFTA is that it would take an absolute commitment from as many signatory states as possible to be efficient,” he says. “The first phase is the conceiving of the idea. The second is implementation; proper implementation. This is where we’re at. We cannot move further unless we do this right.”



What exactly does implementation of a deal of this magnitude mean, though?



With so many players involved, it is understandable that the AfCFTA will be enforced in stages. The instruments that are already operational include the regulations and administrative rulings applied by governments to determine the source of goods, services and investments known as the rules of origin; the monitoring and elimination of non-tariff barriers; as well as the schedule of tariff concessions and other specific commitments.



“Long term, the AfCFTA faces a Brexit type of threat from the larger economies which may feel like they are giving up too much autonomy by being part of the agreement,” warns Jamie Mighti, a South Africa-based political analyst. “This risk is higher in Africa than in the European Union because of increased economic disparities between states and Afrophobic attitudes.” Mighti believes that there are substantial levels of antipathy to the business presence of Africans from other states in the large African economies and that this could present a massive challenge to the success of the AfCFTA.



It is not all doom and gloom, however. Mighti is of the opinion that better inclusion of the youth on the continent is an excellent way to ensure that the agreement will thrive, and that more focus should be placed on aiding small and medium-sized businesses, as opposed to large entities. The IMF also feels that tariff reductions should be complemented by policies to reduce non-tariff bottlenecks to trade, and that agriculture-based and less diversified countries should combine trade policies with structural reforms that boost agricultural productivity to better leverage existing comparative advantages.



Overall, the AfCFTA has been packaged as an opportunity to lead Africa down a path of prosperity, or fall into greater economic depravity that will take decades to equalize. As Anoba sums up, “If things go according to plan, we can finally expect Africa to emerge as the global economy’s heartbeat a decade from now.”

Foreman control loading Containers box from Cargo freight ship

Will The AfCFTA Be The Heartbeat Of The Global Economy?

TOPLINE Twitter’s shares plunged 7% in pre-market trading on Monday after the platform permanently suspended President Donald Trump’s account Friday — Twitter was one of several sites to deplatform the president for his role in inciting violence among supporters Wednesday, including Facebook, Instagram, and Snapchat.



<h4 class="wp-block-heading" id="h-key-facts">KEY FACTS</h4>



After a review of Trump’s recent tweets, Twitter said it felt there was a “risk of further incitement of violence” from the president, who at the time was one of the most followed people on the platform.



The company then virtually chased Trump across the internet to take down posts as the president repeatedly tried to subvert the ban and tweet from other accounts he had access to, such as the official presidential @POTUS account and his presidential campaign account.&nbsp;



The president&nbsp;<a href="https://techcrunch.com/2021/01/08/president-trump-responds-to-twitter-account-ban-in-tweet-storm-from-potus-account/" target="_blank" rel="noreferrer noopener">claimed</a>&nbsp;he would set up his own social media network in the future.



Twitter also cracked down on the accounts of a number of Trump’s supporters who were encouraging violence and spreading misinformation, like lawyer L. Lin Wood who&nbsp;<a href="https://www.forbes.com/sites/jackbrewster/2021/01/07/lin-wood-lawyer-closely-tied-to-trump-permanently-banned-from-twitter-after-claiming-capitol-siege-was-staged/?sh=44dc23851be3">suggested</a>&nbsp;the Wednesday insurrection was a coup “staged” by antifa protesters and described Vice President Mike Pence as a traitor and communist.&nbsp;



<h4 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h4>



After years of pressure to crack down on misinformation, conspiracy and hate speech from Trump, platforms are now abandoning him in droves after the president incited violence among his supporters Wednesday. Of these, Twitter is the most consequential. Twitter was Trump’s preferred way of engaging with the world around him and the president used the platform for everything from announcing policies and denouncing detractors to spreading hate, misinformation and lies. Trump’s communications channels are certainly narrowing — Facebook also banned the president and right wing app Parler has been practically&nbsp;<a href="https://www.forbes.com/sites/abrambrown/2021/01/10/conservative-social-media-app-parler-is-pretty-much-dead/?sh=73e7a2a66a53">run off the internet</a>.&nbsp;&nbsp;



<h4 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h4>



Twitter and San Francisco police are&nbsp;<a href="https://www.sfchronicle.com/bayarea/article/San-Francisco-braces-for-possible-pro-Trump-15860077.php" target="_blank" rel="noreferrer noopener">reportedly</a>&nbsp;preparing for a pro-Trump protest outside the company’s headquarters on Monday in the wake of the ban.&nbsp;



<h4 class="wp-block-heading" id="h-big-number">BIG NUMBER</h4>



88 million. That’s how many Twitter followers Trump had when his account was suspended. This made him one of the most followed on the platform.



<h4 class="wp-block-heading" id="h-further-reading">FURTHER READING</h4>



<a href="https://www.axios.com/platforms-social-media-ban-restrict-trump-d9e44f3c-8366-4ba9-a8a1-7f3114f920f1.html" target="_blank" rel="noreferrer noopener">All the platforms that have banned or restricted Trump so far</a> (Axios)



<a href="https://www.forbes.com/sites/rachelsandler/2021/01/08/twitter-permanently-bans-trump/?sh=3969f0e3158d">Twitter Permanently Bans Trump</a> (Forbes)



<a href="https://www.forbes.com/sites/abrambrown/2021/01/10/conservative-social-media-app-parler-is-pretty-much-dead/?sh=73e7a2a66a53">Conservative Social Media App Parler Is Pretty Much Dead</a> (Forbes)



<a href="https://www.bloomberg.com/news/articles/2021-01-11/twitter-shares-fall-6-following-permanent-trump-ban?srnd=premium" target="_blank" rel="noreferrer noopener">Twitter Shares Fall 7% Following Permanent Trump Ban</a> (Forbes)



<a href="https://www.forbes.com/sites/jemimamcevoy/2021/01/10/parler-at-risk-of-going-offline-after-bans-from-amazon-apple-and-google/?sh=31fcce28312b">Parler At Risk Of Going Offline After Bans From Amazon, Apple And Google</a> (Forbes)



-By Robert Hart, Forbes Staff

Twitter Permanently Suspends President Donald Trump’s Twitter Account

Twitter Shares Down 7% In Pre-Market Trading After Trump Is Permanently Banned From The Platform

When Victor Terry answered a call from State Farm CEO Michael Tipsord and chief administrator Mary Schmidt in June, he wasn’t expecting the news he received. “To hear them say, ‘Victor, we want to make you our first chief diversity officer,’ was really a moment that’s hard to describe,” says Terry, then an area vice president. “We had already experienced the murder of George Floyd and everything that unfolded Memorial Day weekend, but I didn’t see that coming.”



Perhaps he should have: A seat in the C-suite signals a company’s commitment to the area the role represents. In appointing Terry as CDO, State Farm did just that for diversity and inclusion. But it wasn’t the only organization to mint a new chief diversity officer this past year.



According to an&nbsp;<a href="https://www.linkedin.com/pulse/whos-reaching-c-suite-2020-16-roles-have-momentum-george-anders/" target="_blank" rel="noreferrer noopener">analysis of nearly 100,000 U.S. C-suite appointments</a>&nbsp;by LinkedIn, while overall C-level hiring declined 18% year-over-year, some roles, such as that of diversity chief, saw great growth. CDO appointments increased at a rate of 84% as a proportion of total C-suite hires in 2020 as compared to 2019—more than any other C-level role—with Terry, as well as&nbsp;<a href="https://www.sonymusic.com/sonymusic/sony-music-group-appoints-tiffany-r-warren-executive-vice-president-chief-diversity-and-inclusion-officer/#:~:text=New%20York%2C%20October%2014%2C%202020,Chief%20Diversity%20and%20Inclusion%20Officer" target="_blank" rel="noreferrer noopener">Sony Music’s Tiffany R. Warren</a>&nbsp;and&nbsp;<a href="https://www.pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=PressReleases&amp;id=1607452098783-458" target="_blank" rel="noreferrer noopener">UPS’ Charlene Thomas</a>, being among those tapped to serve as their companies’ firsts.



Recent years have seen C-suites expand to encompass titles beyond the traditional CFO, CMO, COO and, of course, CEO. And while some newcomers have been sector-specific—think, <a href="https://investors.virgingalactic.com/news/news-details/2020/Virgin-Galactic-Announces-Michael-Colglazier-as-Chief-Executive-Officer-in-Preparation-for-Commercial-Service/default.aspx" target="_blank" rel="noreferrer noopener">Virgin Galactic’s chief space officer</a>, Michael Colglazier, named in July—most mirror the state of business and, more broadly, the world. “We’re going through a crisis, but at the same time, C-suites and boards are saying, ‘We need to reset,’” says Radhika Papandreou, senior client partner at Korn Ferry. “They need to make sure they have the right talent to not only recover, but to use the recovery as an opportunity to innovate.” And so it’s no wonder so many chief diversity officers made their debuts in 2020 amid the national reckoning on racial injustice.



For Terry, who had spent the better part of his 23 years with the insurer driving diversity and inclusion through its African American employee resource group, his appointment meant formalizing the organization’s efforts, facilitating company-wide conversations about race and creating a D&amp;I governance council. “This group is charged with refining and shaping our enterprise strategy,” Terry says. “While I have the formal title, and it’s something where I have a high degree of ownership and accountability, the truth of the matter is for any diversity and inclusion initiative to be successful, it has to live in the business, it has to be integrated into everything that we do.”



Diversity officers aren’t the only chiefs who have been in demand as a result of the events of 2020. When the coronavirus pandemic forced countless companies to embrace remote work overnight, chief revenue officers found themselves more reliant than ever before on marketing and technology to maintain healthy bottom lines. Some corporations consolidated these functions under the role of chief growth officer.&nbsp;



“You can have such a rigid split that it’s hard for everyone to cooperate and work together, to build the kinds of projects that are multi-teamed,” says George Anders, senior editor at large at LinkedIn and author of the study. “Having a chief growth officer provides a way that someone can look over the walls and see how all the pieces fit together.”



Chief growth officers were hired at a rate of 46% in 2020—second only to CDOs—after several years of steadily gaining steam, with such <a href="https://www.linkedin.com/pulse/we-found-57-routes-c-suite-youre-problem-fixer-step-right-anders/" target="_blank" rel="noreferrer noopener">appointments increasing 42%</a> from 2015 to 2019. Gap and eBay were among those organizations to tap their first CGOs, naming <a href="https://www.businesswire.com/news/home/20201124005379/en/Gap-Inc.-Appoints-New-Chief-Growth-Officer-and-New-President-and-CEO-of-Banana-Republic" target="_blank" rel="noreferrer noopener">Asheesh Saksena</a> and <a href="https://www.prnewswire.com/news-releases/ebay-names-julie-loeger-global-chief-growth-officer-301183002.html" target="_blank" rel="noreferrer noopener">Julie Loeger</a> in November and December. Meanwhile, Mars Wrigley expanded the responsibilities associated with its existing global growth officer role upon promoting <a href="https://www.mars.com/news-and-stories/press-releases/mars-wrigley-introduces-new-chief-growth-officer" target="_blank" rel="noreferrer noopener">Cathryn Sleight</a> to the job in July.



sumer behaviors and tastes have changed amid Covid-19, having all of these areas under one umbrella has paid dividends, chief among them partnerships with food delivery services DoorDash and goPuff, and the acquisitions of Kind and Nature’s Bakery.



But that’s not to say Sleight works in a silo. In fact, she often finds herself collaborating with one of her more traditional counterparts: the CFO. “We need to make sure that the programs we put in place have strong ROIs and are delivering the right level of growth to ensure we capture our fair share of the profit pools,” she says. “Working things through together, you get much better solutions.”



If the state of the C-suite is a reflection of the state of the world, it should come as no surprise that chief medical officer appointments increased in 2020. While it certainly isn’t a new position—or at least not in hospitals and healthcare companies, where it’s long been commonplace—and its growth rate wasn’t as high as that of CDOs and CGOs—LinkedIn pegs it at 4%—the coronavirus pandemic has spurred its expansion into new industries. PepsiCo and Tyson tapped <a href="https://www.pepsico.com/news/press-release/pepsico-appoints-dr.-pietro-antonio-tataranni-as-chief-medical-officer" target="_blank" rel="noreferrer noopener">Dr. Pietro Antonio Tataranni</a> and <a href="https://ir.tyson.com/news/news-details/2020/Tyson-Foods-Launches-New-Nationwide-COVID-Monitoring-Strategy-Expands-Health-Staff/default.aspx" target="_blank" rel="noreferrer noopener">Dr. Claudia Coplein</a> for their newly created chief medical officer roles in November and December, and <a href="https://www.royalcaribbeanpresscenter.com/press-release/1459/royal-caribbean-group-names-dr-calvin-johnson-global-head-public-health-and-chief-medical-officer/" target="_blank" rel="noreferrer noopener">Royal Caribbean hired Dr. Calvin Johnson</a> as its first CMO and global head of public health in July.



<blockquote class="wp-block-quote is-style-large is-layout-flow wp-block-quote-is-layout-flow">“I don’t think these were knee-jerk reactions to what we’ve gone through. Some of this had already been thought about in board and C-suites—the pandemic accelerated the decisions.”-Radhika Papandreou, senior client partner, Korn Ferry</blockquote>



“Truth be told, if you’d asked me a few months earlier, I would not have believed you,” says Dr. Johnson of his appointment. “In a word, it was the pandemic. It literally stopped Royal in its tracks.”



The travel and hospitality industry has been hard hit by Covid-19, and cruise companies, including Royal Caribbean, were among the first to feel its effect, their common spaces and close quarters ideal settings for outbreaks. While Royal Caribbean did have healthcare infrastructure in place, as well as individuals to oversee it on a part-time basis, it didn’t have a dedicated leader, let alone one who had the ear of the CEO.



“A lot of C-level titles are created when companies have a crisis,” Anders says. “In 2019, we saw a lot of tech companies creating chief people officers. That happened to coincide with a sense that some tech companies were having a hard time getting the human side of their companies right.”



Like all medical chiefs, Dr. Johnson is responsible for delivering care to patients, in his case passengers and crew. He oversees more than 60 medical sites on ships sailing all around the world. During a global public health crisis, this means being in constant communication with his fellow executives. “Normal crew movement, which before wouldn’t necessarily have to have medical or public health involvement, now does because it involves ensuring the crew coming on board isn’t coming on with the virus. It is testing, screening and educating, from a prevention perspective,” Dr. Johnson says. “For crew rotating off, it’s ensuring they’re not taking the virus off and into the community.”



Would Royal Caribbean have needed a chief medical officer had it not been for Covid-19? It’s hard to say. But as reactive as the appointment—and that of this year’s other C-suite recruits—may have been, it’s not likely to result in a transient tenure. “I don’t think these were knee-jerk reactions to what we’ve gone through,” says Papandreou. “Some of this had already been thought about inboard and C-suites—the pandemic accelerated the decisions.”



-by Vicky Valet, Forbes Staff

Businesswoman looks across city at sunrise

The New C-Suite: How 2020 Shaped Corporate America’s Executive Ranks

Although Donald Trump-led arguably the most Africa-adverse American administration in history, analysts warn not to expect too much from his successor, Democrat Joe Biden. A look at the likely impact of his win on the US-Africa economic dynamics.



HISTORICALLY, IT HAS NOT MATTERED MUCH for Africa whether Democrats or Republicans sit in the White House. This is largely because the United States (US) has never really had a coherent and constructive Africa policy. So, although outgoing Republican president Donald Trump led arguably the most Africa-adverse American administration in history, analysts warn not to expect too much from his successor, Democrat Joe Biden.



Biden was vice-president in the Obama administration that preceded Trump. But whereas Trump once called African countries “shitholes”, Biden at least is promising to “reengage with the world”.



“He will be more engaging with countries, including Africa,” believes Jannie Rossouw, interim head of Wits Business School in Johannesburg. “Trump really isolated the US from many regions, from very many continents, it was bad relationship all over the place.”



Judd Devermont, director of the Africa Program at the Center for Strategic and International Studies in Washington DC, agrees.



“I think Biden is going to focus on rebuilding partnerships and that includes at the multilateral level to the state level, to the subnational level,” he says.



“So I think you will first see a refocus on climate change and strengthening international adoptions, which will be of benefit to Africans. It’s clear that Biden is very supportive of the Continental Free Trade Agreement. That is incredibly important. But he has also talked about the importance of subnational governance and particularly urbanization. And so I think we have the potential to see the next administration work with African countries at these multiple levels to unlock their economies.”



Devermont expects the biggest African economies – Nigeria, South Africa and Kenya in particular – to receive significant attention, while the prospects for Ethiopia also look promising.



But Biden has his work cut out for him. Domestic challenges like tackling the Covid-19 pandemic, an economic recession and reckoning with racism are likely to keep him busy during his first few months in office. When his attention finally shifts to international affairs, climate change and trade wars with China can expect to dominate the agenda.



But instead of disparaging Beijing at every turn, like Trump did, Devermont expects there will be a focus on “transparency around norms, around standards, ensuring that African economies are open to US investors. And the more negative elements of a Chinese engagement will be blunted or curbed through shared partnerships with Africans around how foreign countries should invest in their countries, how to form partnerships in their countries.”&nbsp;&nbsp;



Another expectation is that American legislation allowing sub-Saharan African countries preferential entry into the US market will be extended.



Rossouw believes that “Biden will try to find a call partner in countries in Africa, and that might be beneficial, especially for the bigger economies in Africa, such as South Africa. If Johannesburg was an independent country, it would be the ninth largest economy in Africa. So naturally, the interest will first be in the big economies and then there will be spillover effects to the smaller economies.”



Biden has in the past committed Washington to helping the continent manage the challenges of a burgeoning population. The United Nations’ projection that Africa will be home to a quarter of the world’s population by 2050 led him to suggest an urbanization initiative. This would include partnerships between African and American cities planning for growth in critical sectors like energy access, climate change, transportation and water management.



“Urbanization is the key transformation that the continent will undergo in this century and ensuring that African cities, most of whom sit on the coasts, are open for business will be a huge opportunity for US companies,&#8221; says Devermont. &#8220;I wouldn&#8217;t underestimate how important that initiative, depending on what it develops into, can be for the US-Africa economic relationship.&#8221;



Equally important is that the Biden administration reach out to companies that remain skeptical or ignorant about opportunities in Africa and address some of the risks and myths they have about investing on the continent.



Trump’s mission was to make America great but his administration largely disengaged with one of the world’s fastest-growing regions. Time will tell whether his successor fares any better. 



-By PAULA SLIER AND ALLISON GOSNEY

US dollar on the Africa map background

Will The United States Re-Engage With Africa?

TOPLINE As the bull market for stocks rages on and even bests pre-pandemic levels, some American households are bouncing back much more slowly than others, unearthing a pattern indicative of a K-shaped (or lopsided) economic recovery, Goldman Sachs said on Sunday–and without additional fiscal relief, it could take years for employment to fully recover.



<h4 class="wp-block-heading" id="h-key-facts">KEY FACTS</h4>



The biggest driver of the K-shaped recovery taking shape is that pandemic job losses were &#8220;highly concentrated in virus-sensitive industries&#8221; like retail, leisure and hospitality–all of which disproportionately employ low-wage workers, Goldman analyst Joseph Briggs wrote in a weekend note.



Some companies have turned to technology in an effort to boost productivity in the absence of real workers, and it’s working (which is bad news for American workers): Productivity is up 4% this year despite major job losses, according to Moody&#8217;s Analytics, which now estimates the 22 million jobs lost this spring won’t come back until early 2024.



While stimulus measures have helped keep overall disposable income afloat during the pandemic, Americans making less than $30 per hour are feeling the most economic pain.



Slowed wage growth has also been markedly worse for lower-income workers–further contributing to the disparate economic recovery, the Goldman report goes on to say.



Goldman projects a lack of new fiscal relief will cause a fourth-quarter decline in disposable income that will hit the bottom 25% of earners &#8220;particularly hard,&#8221; while also weighing on consumer spending this winter.



The outlook for lower-income workers will get &#8220;significantly worse&#8221; if Congress doesn&#8217;t pass another fiscal stimulus package of at least $700 billion in the first quarter, Goldman notes, adding that additional relief coupled with widespread vaccination could actually help yield a V-shaped recovery, which is characteristic of a quicker, more equitable economic bounceback.



<h4 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h4>



&#8220;The largest pandemic casualties have been less productive industries including retailing, leisure and hospitality, while the biggest winners have been in more productive industries like technology, wholesaling and professional services,&#8221; Moody&#8217;s Analytics Chief Economist Mark Zandi said in a weekend note, adding that within industries, smaller businesses have fared worse than their larger, more productive counterparts, which are more able to afford large investments in technology and organizational changes. &#8220;This is clearest in retail. Tens of thousands of mom and pop retailers have failed and mid-sized publicly traded retailers have filed for bankruptcy, while the retailing behemoths gobbled up market share. They knew those changes would entail difficulty for their labor forces, [but] the pandemic has effectively given businesses cover to make these wrenching changes.&#8221;



<h4 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h4>



November marked the best month for stocks in over 30 years, but the labor market and other economic indicators are flashing serious warning signs. Despite record-low mortgage rates, higher costs pushed pre-owned home sales down in October for a second month in a row, according to a report from the National Association of Realtors released on Monday, and new manufacturing data showed that production output and new factory orders are also falling as Covid-19 cases surge to new highs nationwide. “Storm clouds are gathering,” George Ratiu, a senior economist at Realtor.com&nbsp;<a href="https://www.reuters.com/article/us-usa-economy/u-s-housing-manufacturing-data-suggest-economic-recovery-slowing-idUSKBN28A2IX?il=0" target="_blank" rel="noreferrer noopener">told Reuters on Monday</a>. “This winter could pose an unusual challenge for many people across the country, unless Congress takes significant actions.”



<h4 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h4>



Potential relief before January. Goldman says it expects Congress to pass a small fiscal package in December that could extend the expanded unemployment insurance benefits set to expire at year’s end.



<h4 class="wp-block-heading" id="h-tangent">TANGENT</h4>



Despite highly encouraging vaccine-trial results from Pfizer, Moderna and AstraZeneca in the past month, a &#8220;parabolic&#8221; surge in the number of Covid-19 infections is threatening to overwhelm hospitals around the country and has already triggered new lockdown measures on businesses. In a note to clients last week,&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/23/13-million-americans-lose-jobs-covid-cases-skyrocket-but-double-dip-recession-is-unlikely-moodys/">Moody&#8217;s said</a>&nbsp;the resurgent virus could stall or even backtrack the economic recovery in the coming months and force another 1.3 million Americans into unemployment.



<h4 class="wp-block-heading" id="h-further-reading">FURTHER READING</h4>



<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/23/13-million-americans-lose-jobs-covid-cases-skyrocket-but-double-dip-recession-is-unlikely-moodys/">1.3 Million More Americans Could Lose Their Jobs As Daily Covid Cases Skyrocket, But A Double-Dip Recession Is Unlikely, Says Moody’s</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/24/dow-jones-industrial-average-hits-record-30000/">Dow Jones Industrial Average Hits Record 30,000–Reaching A Historic Milestone As 11 Million Americans Remain Unemployed Amid Pandemic</a> (Forbes)



-By Jonathan Ponciano, Forbes Staff

Holiday Season Begins Across New York City Area

It Could Take 4 Years To Recover The 22 Million Jobs Lost During Covid-19 Pandemic, Moody’s Warns

“There is something called the Queensbury Rule. You do not continue to beat up somebody who is on their knees. You do not. It is the rule. Civilized people abide by that Rule in business, sports, and politics. Rating Agencies should treat us the same way. During a global crisis!”



This was the response on Twitter of South Africa’s Finance Minister, Tito Mboweni on Sunday, November 21, after three dominant international credit rating agencies announced that the “outlook is negative” for the country.



American credit agencies, Fitch Ratings, announced on November 20 that South Africa&#8217;s Long-Term Foreign-Currency Issuer Default Rating (IDR) had downgraded to &#8216;BB-&#8216; from &#8216;BB&#8217;. Joining Fitch, Moody&#8217;s Investors Service (Moody’s) also announced on Friday that the country’s ratings had been downgraded from Ba1 to Ba2. This is in addition to S&amp;P Global Ratings status on the country in April 2020 when they downgraded the country’s credit ratings to BB- from BB.



What could this mean for South Africa in a year of the pandemic?



Professor Philippe Burger, Pro-Vice-Chancellor of Poverty, Inequality, and Economic Development at the University of the Free State in South Africa, says that the downgrade means that medium- to long-run interests will now be higher as opposed to what it would have been in the absence of a downgrade.



“That will affect everyone who needs to borrow, be it households or the government. It also means that to attract foreign investment into the country, we will have to offer more attractive returns on investment,” Burger adds.



The African Peer Review Mechanism (APRM), a specialized entity of the African Union (AU), noted that because this has happened twice now since the start of the pandemic, the “expectation that fiscal deficit will widen and government debt will rise.” Like many other countries, the Covid-19 pandemic has had a severe impact on South Africa’s economy. However, Fitch said that investment spending had already weakened in recent years in the country, falling last year to the lowest level in real terms since 2012. This reflects on challenges to the business environment such as the poor reliability of power supply, labor market inflexibility, and subdued domestic demand prospects. Although Moody’s said that the country had maintained a negative outlook in place since the beginning of November 2019, the South African National Treasury stated the Covid-19 pandemic hit South Africa at a difficult time. “Recent downgrades saw South Africa reaching its lowest credit rating levels from the ‘big three’ rating agencies since 1994. Economic growth has continued to decline irrespective of the attempts to reduce structural constraints,” the statement read on Saturday. Fitch further said that though President Cyril Ramaphosa announced an Economic Reconstruction and Recovery Plan in October, which focuses on boosting infrastructure investment, increasing energy supply, job creation, and re-industrialization, the country’s “track record” leaves nothing to be desired. “The track record of implementation of earlier reform initiatives has been relatively weak and, even if implemented, the effect of the reforms would be limited and take time to accumulate,” Fitch’s statement read. Unemployment in South Africa continues to be one of the country’s biggest challenges as it sits at 30.8%, according to Statistics South Africa (Stats SA).



“While South Africa is not alone in having been severely affected by the crisis, its capacity to mitigate the shock over the medium term is lower than that of many sovereigns given significant fiscal, economic and social constraints and rising borrowing costs,” Moody’s stated in their release. South Africa’s Minister of Finance, Tito Mboweni, stated that the downgrade “is a painful one” and the implications of this will now affect the country’s borrowing costs. The National Treasury added that as outlined by the president’s recovery plan, the government’s plan to prioritize economic recovery and fiscal consolidation remains the same. “The downgrade will not only have immediate implications for our borrowing costs, but it will also 6 constrain our fiscal framework,” Mboweni said in a statement. “There is, therefore, an urgent need for government and its social partners to work together to ensure that we keep the sanctity of the fiscal framework and implement much-needed structural economic reforms to avoid further harm to our sovereign rating.” Professor Burger believes that from an expert’s perspective, the government would need to take the following steps to alleviate the problem: “Re-establish fiscal sustainability and take steps to arrest the upward trend in the public debt-to-GDP ratio and ensure it does not breach 100%. This will require enforcing the medium-term budget policy statement (MTBPS) plans on the salary freeze on civil service salaries for this year and the next three years; Take necessary steps such a reducing red tape and policy uncertainty; Take steps needed to release spectrum and restructure and liberalize the energy sector. The latter includes getting the green energy sectors going. Many of these plans are in the pipeline but need acceleration.”



Treasury stated however that the rating agencies have indicated that the country’s rating strengths include “a credible central bank, a flexible exchange rate, an actively traded currency, and deep capital markets, which should help counterbalance low economic growth and fiscal pressures.”

Economy Concept

What South Africa’s Recent Credit Rating Downgrade Actually Means

Stay-at-home stocks, a pandemic-market favorite, are getting battered Monday after pharmaceutical giant Pfizer announced promising vaccine results that could reopen and restore a troubled economy, but might negatively affect companies like Zoom and Peloton that have benefited from the stay-at-home environment—at least temporarily. 



<h4 class="wp-block-heading">KEY FACTS</h4>



Tech-heavy Nasdaq, which hosts stay-at-home staples like Zoom, Netflix and Amazon, is lagging the broader market on Monday, is up just 1% while the Dow Jones and S&amp;P 500 are up about 4% and 3%, respectively, as industries left reeling by the pandemic celebrate news regarding the possibility of a return to normalcy.



Among the day&#8217;s biggest stock losers is pandemic phenomenon Zoom, which late last month&nbsp;<a href="https://www.forbes.com/sites/sergeiklebnikov/2020/10/29/zoom-is-now-worth-more-than-exxonmobil-and-founder-eric-yuans-net-worth-has-nearly-doubled-in-three-months/">surpassed ExxonMobil in market cap</a>; shares are down 15% on Monday but are still up more than 500% this year.Peloton Interactive–which is gearing up for what could easily be its best holiday season yet–is also tanking about 15%, pushing its year-to-date gains down to about 260%.



Netflix, meanwhile, is down about 5%–a slightly smaller decline for a firm that&#8217;s still up nearly 50% this year.



Though not as hard hit as others on Monday, cloud stocks like Twilio, Slack and Datadog are also falling–about 3%, 1.5% and 1%, respectively–despite the broader market gains.



Stocks like Zoom and Netflix should be &#8220;long-term winners, [but they&#8217;ll] lose in the short term, as their valuations ran ahead of actual earnings,&#8221; says James McDonald, the CEO of Los Angeles-based Hercules Investments, adding that such firms have &#8220;likely already seen peak levels of adoption and revenue&#8221; in the short term.



<h4 class="wp-block-heading">CRUCIAL QUOTE&nbsp;</h4>



&#8220;The enormous moves witnessed in some areas of the market are certainly due to a fundamental reassessment after the vaccine news, but [they] also reflect a huge positioning adjustment as investors try and dial back tech exposures and&#8230; buy names closer to the epicenter of the pandemic,&#8221; says Vital Media Knowledge Founder Adam Crisafulli. &#8220;Even though tech has been in the midst of a consolidation phase since the start of September, the group is still very owned and should this pro-cyclical rotation continue (which seems likely), momentum will face steep headwinds in the near-term.&#8221;



<h4 class="wp-block-heading">CHIEF CRITIC</h4>



Experts aren&#8217;t totally convinced Monday&#8217;s stock gains–and losses–will be long-lived. &#8220;I suspect the markets, which are already in a bullish mood due to the incoming Biden administration, are overthinking the positive vaccine news,&#8221; says Nigel Green, the CEO of $10 billion advisory deVere Group. “There’s a long road ahead still,&#8221; he adds, noting that investors will have more clarity on the implications of Monday&#8217;s announcement by the third week of November, when Pfizer&nbsp;<a href="https://www.pfizer.com/news/press-release/press-release-detail/pfizer-and-biontech-announce-vaccine-candidate-against" target="_blank" rel="noreferrer noopener">says it plans</a>&nbsp;to submit its vaccine candidate to the FDA for approval.



<h4 class="wp-block-heading">KEY BACKGROUND</h4>



Technology stocks have massively outperformed the broader market this year, with the Nasdaq composite up nearly 30% since January while the S&amp;P 500 and Dow Jones are up about 11% and 2%, respectively. Monday marked a reversal of fortune between firms doing well during the pandemic and those that have been hardest hit. While stay-at-home stocks sink, shares of banks, energy firms, cruiseliners and movie-theater operators are surging.&nbsp;



<h4 class="wp-block-heading">TANGENT</h4>



Shares of Clorox, a pandemic breakout stock, are also slumping–down 7%–on Wednesday, though they&#8217;re still up 34% for the year.&nbsp;



<h4 class="wp-block-heading">FURTHER READING</h4>



<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/09/stocks-surge-worldwide-to-new-all-time-highs-after-pfizer-says-covid-19-vaccine-candidate-90-effective/">Stocks Surge Worldwide To New All-Time Highs After Pfizer Says Covid-19 Vaccine Candidate 90% Effective</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/roberthart/2020/11/09/pfizer-says-covid-19-vaccine-is-90-effective-although-trials-are-ongoing/">Pfizer Says Covid-19 Vaccine Is 90% Effective, Although Trials Are Ongoing</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/06/billionaire-leon-cooperman-knows-for-sure-election-results-will-be-challengedheres-his-outlook-on-stocks-and-the-economy/">Billionaire Leon Cooperman Knows ‘For Sure’ Election Results Will Be Challenged—Here’s His Outlook On Stocks And The Economy</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/06/stocks-end-week-with-biggest-post-election-day-rally-in-over-a-century/">Stocks End Week With Biggest Post-Election Day Rally In Over A Century</a> (Forbes)



-By Jonathan Ponciano, Forbes Staff

Key Speakers At The BoxWorks 2019 Conference

Zoom, Peloton, Netflix: Stay-At-Home Stocks Are Getting Smoked By Pfizer’s Latest Vaccine Prospects

Since March, global hospitality groups like Marriott, Wyndham and Hilton have fought an uphill battle to stay above water in the pandemic economy. Chains have seen their occupancy rates and revenues collapse with the onset of the virus, prompting hotel closures and mass layoffs. As of September, the American Hotel and Lodging Association, an industry trade group,&nbsp;<a href="https://www.ahla.com/sites/default/files/State%20Hotel%20Closures%20chart.pdf" target="_blank" rel="noreferrer noopener">estimated</a>&nbsp;that American hotels had lost over 870,000 jobs, over a third of the total workforce, and&nbsp;<a href="https://www.statista.com/statistics/206546/us-hotels-occupancy-rate-by-month/" target="_blank" rel="noreferrer noopener">Statista estimates</a>&nbsp;that occupancy has declined nearly 32% this year.



Industry disruption is certain, but for the big players, weathering the storm is likely a temporary problem. In the long run, business travel will resume, families will vacation again and public events will reopen to fanfare. People will find reasons to return to hotels. And by relying on their massive franchisee networks and light capital expenses, hotel groups can likely break even despite a low occupancy rate.



The greater challenge is in the short term: How do you convince customers in the middle of a global pandemic that it’s safe to stay in a hotel?



“Over 70% of our guests were paying more attention to the cleanliness of their own spaces,” says Phil Cordell, Hilton’s global head of new brand development, who helped lead their sanitation efforts. “It’s part emotional, part logical. How are we going to tackle that?”



For hotels, sanitation during coronavirus has proven an organizational and PR hurdle, mandating new supply chains, a full overhaul of cleaning practices, strategic partnerships and a tightly controlled public narrative. And while some of the changes are likely to be temporary—breakfast buffets, though taboo now, will surely return—others will be long-lasting.&nbsp;



For Wyndham Hotel Group, which owns hotel brands including Wyndham, Days Inn and Ramada Inn, decision-making power in the early stages of the pandemic were devolved to a small operations team that scrambled to make sure its franchisees had cleaning basic worked with its suppliers to drop-ship cleaning supplies directly to them.&nbsp;



“Trust eroded right away and had to be rebuilt,” says Mike Mueller, Wyndham’s head of brand operations. “Before, it was taken for granted that things were clean. All of the sudden that became the number one amenity.” Bottles of hand sanitizer and sanitary wipes, proudly displayed, became visual shorthand for a safe, tightly run ship.



Hilton ran a similar program for its franchisees, shipping sanitation care packages, courtesy of Lysol, to all of its locations globally. (If prominently displaying a bottle of Purell in your lobby is a hint, Hilton’s pandemic-era partnership with the iconic disinfectant spray is something slightly less subtle.) “The Americas were easy, Western Europe was fairly easy, but the further east you went in Europe, the harder it became,” says Cordell. “Russia, the -stan countries—those were the difficult ones.”



Public-facing brand partnerships were also at the forefront of Hilton’s larger pandemic response. In April, the company announced its partnership with the Mayo Clinic to develop its new sanitation program. The InterContinental Hotel Group, whose properties include Regent Hotels and Holiday Inn, also partnered with the Cleveland Clinic to develop its new “Way of Clean” regimen, while Marriott brought experts from Purdue University and Cornell on to its Covid-19 sanitation advisory board.&nbsp;



Despite the variety of voices, their recommendations have been similar: Make cleaning supplies and masks readily available, find food and beverage alternatives to traditional hotel dining and clean vigorously between customers’ stays, but scale back on housekeeping during visits to allay anxieties over having strangers in their rooms. (Housekeepers, one of the groups whose employment has suffered most during the coronavirus pandemic,&nbsp;<a href="https://www.nytimes.com/2020/09/11/travel/coronavirus-hotel-housekeeping.html" target="_blank" rel="noreferrer noopener">have noted</a>&nbsp;that the new processes have made their work more difficult.)



More creative problem-solving is likely to have mixed results. In April, Marriott announced that it would supply its locations with electrostatic sprayers, tools that spray a positively-charged disinfectant mist that adheres to surfaces. A&nbsp;<a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7275188/" target="_blank" rel="noreferrer noopener">study</a>&nbsp;from the Cleveland VA Medical Center found that while the sprays are effective, costs may be prohibitive: In September, when Marriott announced a&nbsp;<a href="https://www.usitt.org/news/marriott-providing-exclusive-offer-electrostatic-sprayers-sanitizing-covid-19" target="_blank" rel="noreferrer noopener">last call</a>&nbsp;for subsidized devices, a small handheld sprayer went for $1,227, while a larger backpack-size version cost $2,543. Meanwhile at Hilton, plans are underway to test UV light-emitting robots to assist in cleaning. Simpler fixes, like mobile check-in apps that limit face-to-face exposure at the front desk, have been widely implemented and are more likely to last the test of time.



“I think expectations are going to change and evolve,” says Cordell. “We’ve got to be quicker on our feet than ever before.”



&#8211;By Christian Kreznar, Forbes Staff

BRAZIL-HEALTH-VIRUS

With Occupancy Down 32% Due To Covid-19, Here’s How Hotel Chains Are Trying To Convince Customers It’s Safe To Stay

China’s GDP grew 4.9% in the third quarter compared to the same time last year, the country’s National Bureau of Statistics <a rel="noreferrer noopener" href="http://www.stats.gov.cn/english/PressRelease/202010/t20201019_1794616.html" target="_blank">said</a> Monday, as the economic superpower continues to rebound after the coronavirus pandemic. 



<h4 class="wp-block-heading">KEY FACTS</h4>



That growth was fueled by strong retail sales and industrial production, the government said.&nbsp;



China’s exports rose 9.9% last month while imports soared 13.2%—two more&nbsp;<a href="https://www.reuters.com/article/us-china-economy-trade/chinas-imports-exports-surge-as-global-economy-reopens-idUSKBN26Y0BL" target="_blank" rel="noreferrer noopener">strong signs</a>&nbsp;of recovery.&nbsp;



China’s is the only major economy that is expected to grow in 2020, according to the International Monetary Fund, which is forecasting&nbsp;<a href="https://www.imf.org/en/Countries/CHN" target="_blank" rel="noreferrer noopener">1.9% growth</a>&nbsp;for the year.&nbsp;



<h4 class="wp-block-heading">CRUCIAL QUOTE&nbsp;</h4>



Despite robust growth at home, the Chinese government also noted Monday that the global environment remains “complicated and severe” and that the country is under “great pressure” to prevent any further outbreaks of the virus.&nbsp;



<h4 class="wp-block-heading">KEY BACKGROUND</h4>



China’s economy&nbsp;<a href="https://www.forbes.com/sites/isabeltogoh/2020/04/17/coronavirus-drags-chinas-economy-into-first-slump-in-four-decades/#1aa08e324bcb">shrank 6.8%</a>&nbsp;in the first quarter—its worst contraction in 40 years—as the government shut down nearly all activity in parts of the country to prevent the spread of the coronavirus. In the second quarter, growth bounced back to 3.2% after factories reopened and the government poured billions of dollars in stimulus measures back into the economy.&nbsp;



<h4 class="wp-block-heading">TANGENT</h4>



Economists&nbsp;<a href="https://markets.businessinsider.com/news/stocks/economic-outlook-gdp-estimates-bank-america-stimulus-bill-recovery-quarter-2020-9-1029582684#" target="_blank" rel="noreferrer noopener">expect</a>&nbsp;the United States to see growth in the third quarter, too, but that growth is likely to be limited in the fourth quarter if further stimulus measures from the federal government are delayed until 2021.&nbsp;



<h4 class="wp-block-heading">FURTHER READING</h4>



<a href="https://www.forbes.com/sites/sarahhansen/2020/07/30/economy-shrank-at-historic-33-annual-rate-in-second-quarter-but-thats-not-the-whole-story/">Economy Shrank At Historic 33% Annual Rate In Second Quarter—But That’s Not The Whole Story</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/09/07/chinas-exports-surged-95-in-august-despite-escalating-tensions-with-the-united-states/">China’s Exports Surged 9.5% In August Despite Escalating Tensions With The United States</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/carlieporterfield/2020/10/15/europe-breaks-record-for-weekly-coronavirus-cases-as-countries-enforce-new-lockdowns/">Europe Breaks Record For Weekly Coronavirus Cases As Countries Enforce New Lockdowns</a> (Forbes)



-By Sarah Hansen, Forbes Staff

CHINA-ECONOMY-GLASS

China’s Economy Continues Rebound With 4.9% Growth In Third Quarter

Ruth Porat, the stalwart chief financial officer of Alphabet and Google, is no stranger to a crisis. She began her career at Morgan Stanley in 1987, a mere seven weeks before Black Monday—the largest single-day decline in trading history at the time. “At that moment, I was concerned that maybe my career was over before it even started,” she recalls.



Far from it. Porat is one of the rare corporate executives to have transcended the upper echelons of Wall Street to the highest ranks of Silicon Valley. While the scenery may be different, many of the challenges remain the same: navigating economic downturns, government investigations and regulatory hurdles. Of course, a global pandemic is a new obstacle. “This environment is more challenging than anything I&#8217;ve seen because you&#8217;re combining a health crisis with an economic crisis,” says Porat in her first-ever interview with&nbsp;Forbes&nbsp;from her home in Palo Alto, California. “The path forward is less certain.”&nbsp;



But Porat has deftly charted a path through uncertain territory before. During her 28-year tenure at Morgan Stanley, she held roles such as vice chairman of investment banking and global head of financial institutions before ultimately rising to the rank of chief financial officer in January 2010. “I certainly started in banking when it was not easy to be a woman in banking,” she says. “I haven’t thought about those shoulder pads for a long time, the bow ties, the scarves, the scotch, the horrible efforts to fit in.” What kept her there, she says, was the opportunity to “keep learning and growing”—remarkably, in the face of great turmoil. Case in point: being called upon by the U.S. government to help with the bailouts of insurance giant AIG and mortgage-financing agencies Fannie Mae and Freddie Mac during the Great Recession. “Much like the current crisis environment, one of the highlights of my career was advising the U.S. Treasury Department during the 2008 financial crisis,” she says. “I was able to use the skills I developed over a [lifelong] career for something that was so important at that moment in time for the country.”&nbsp;



Over a decade later, Porat has the same steely resolve when it comes to the coronavirus pandemic, which has already taken a tremendous toll on the U.S. economy. Over 100,000 businesses permanently shuttered as of April, according to a&nbsp;<a href="https://www.nber.org/papers/w26989.pdf" target="_blank" rel="noreferrer noopener">study</a>&nbsp;published by the National Bureau of Economic Research. At the same time, 88% of small business owners say they’ve used all of their Paycheck Protection Program loan funding, according to a recent&nbsp;<a href="https://www.axios.com/small-business-confidence-goldman-sachs-74ba6e69-ad0e-4cb5-bee3-d03445b2a30e.html" target="_blank" rel="noreferrer noopener">survey</a>&nbsp;of over 1,500 businesses conducted by Goldman Sachs. And without additional government funds, 30% say they’ll exhaust their cash reserves by the end of the year. That’s why Porat is leading Google’s latest efforts to help get America’s ravaged small businesses and economy back on track. This while managing one of the world’s largest corporate balance sheets amid the looming threat of anti-trust lawsuits that may hold the fate of the entire tech industry in the balance. It may just prove to be her greatest challenge yet.



While Google is a corporate behemoth, its roots are in small business. “It’s so clear that small businesses are the lifeblood of the American economy,” says Porat, rattling off the stats: They provide about two thirds of net new jobs, and 67 cents of every dollar spent at a small business stays in the local economy.



At the start of the pandemic, Google CEO Sundar Pichai announced an <a rel="noreferrer noopener" href="https://blog.google/inside-google/company-announcements/commitment-support-small-businesses-and-crisis-response-covid-19/" target="_blank">$800 million commitment</a> to aid small businesses and provide overall crisis relief. Of that, a $200 million Grow with Google Small Business fund was launched in March in partnership with the Opportunity Finance Network—a national association of community development financial institutions—with a mission to serve small businesses underserved by mainstream finance and a proven model for moving capital into the hardest to serve communities. The main objective? Supporting the short-term recovery and long-term financing needs of small businesses hardest hit by Covid-19. To be clear, this is not a handout. The majority of funds are earmarked as up to 10-year term loans at no greater than 3% interest. Some $340 million in Google Ads credits were also made available to all small businesses with active accounts over the past year.



<blockquote class="wp-block-quote has-text-align-center is-style-large is-layout-flow wp-block-quote-is-layout-flow">“Small businesses are part of our DNA as a company&#8230;Over 21 years ago, Google itself was a small business that started in a two-car garage and our first ads customer was a mail-order lobster business in Maine.” <cite>Ruth Porat, CFO of Alphabet &amp; Google</cite></blockquote>



“Small businesses are part of our DNA as a company,” says Porat, sharing the company’s approach to small business for the first time since the pandemic began. “We often talk internally about the fact that over 21 years ago, Google itself was a small business that started in a two-car garage and our first ads customer was a mail-order lobster business in Maine.”&nbsp;



In many ways, Porat sees her transition to Silicon Valley as getting back to her roots. She was raised in Palo Alto, California, where her father, a former research fellow at Harvard, moved the family to take&nbsp; a position at the Stanford Linear Accelerator Center. After earning her bachelor’s degree in economics and international relations at Stanford in 1979, she went on to get her master’s degree in industrial relations from the London School of Economics and an MBA from Wharton before joining Morgan Stanley. Porat was co-head of technology investment banking during the ‘90s tech boom, working alongside famed internet analyst Mary Meeker, who is godmother to her three children. “Tech was something I had done quite a bit, actually,” says Porat. That’s an understatement: She was the chief architect behind the debt financing that saved Amazon from near collapse during the dot-com crash in 2000 and then worked on Google’s IPO in 2004. “It was great to see the vision, the mission, the drive of Google at such an early stage,” she says. “Given I’ve known Google since inception, and how passionate I was about the company, when the opportunity presented itself, I said yes on the spot.”



While Porat has broken the glass ceiling time and again, Google has struggled with diversity within its own ranks. As racial tensions reached a boiling point this summer, Google <a rel="noreferrer noopener" href="https://ofn.org/articles/ofn-announces-first-round-google-loans-and-googleorg-funded-grants" target="_blank">announced</a> in June an additional $45 million in loans and $5 million in Google.org grants to assist small businesses, with a focus on Black-owned businesses. The company committed to increase the diversity of its leadership 30% by 2025. “Hopefully this is the moment that changes race relations and really addresses racial inequality. There is no more time—and so we’re taking a hard look at ways we can help address systemic racism against the Black community with a real sense of urgency,” she says.



The company also announced the first round of the Grow with Google Small Business Fund. Five community development financial institutions (CDFIs)&nbsp; were awarded a total of $15.5 million in loans, and six received $750,000 in grants. Among those awarded were Grameen America, a non-profit founded by Nobel Peace Prize winner Mohammed Yunnus (and currently run by Andrea Jung, former chairman and CEO of Avon) that provides microloans, training and support to diverse low-income women entrepreneurs and Citizens Potawatomi Community Development Corporation, one of the largest Native-owned CDFIs in the nation. “Systemic inequities, like the racial wealth gap create significant disadvantages for minority communities, which is why we’re so focused on providing Black, Latinx and other underserved communities with more equitable access to capital through our partnership,” says Porat.&nbsp;



The partnership is also unique in structure compared to relief efforts of other tech firms like Facebook and Amazon. “What makes Google such a strategic first mover and different is their focus on recovery versus just short-term relief,” says Lisa Mensah, president and CEO of OFN. “It is extremely rare for a corporate Treasury to release $170 million and judge on their own that this is the kind of debt they will hold. They didn’t wait for a risk rating from S&amp;P or to have it all guaranteed by the government or another source—Google is a trailblazer.”



For Porat, it was a chance to help reposition businesses that were already at a significant disadvantage prior to the pandemic. “Most small businesses are started with personal assets and loans that are typically guaranteed with one’s network,” says Porat. “But if you start with the types of wealth disparities that we have in society where only 20% of small businesses are minority-owned and only 21% are women-owned, our current situation is an outgrowth of that initial disparity.”&nbsp;



The small business lending space is a massive market, one with around <a rel="noreferrer noopener" href="https://qedinvestors.com/wp-content/uploads/2015/10/The-Brave-100-The-Battle-for-Supremacy-in-Small-Business-Lending_vf.pdf" target="_blank">$800 billion in annual originations</a> and an antiquated process involving tedious paperwork, manual inputs and very little transparency—or software, for that matter. Will Google, a company whose founders famously spoke in 2014 of the need for “<a rel="noreferrer noopener" href="https://www.inc.com/laura-montini/larry-page-says-its-time-to-think-big.html" target="_blank">revolutionary change</a>,” set its sights on disrupting the small business lending space next? Porat quickly puts that idea to rest. “We’re not a financial institution and we don’t intend to become [one],” she asserts.



<blockquote class="wp-block-quote has-text-align-center is-style-large is-layout-flow wp-block-quote-is-layout-flow">“The biggest compliment I can give someone is to say they are a real difference-maker—that’s Ruth.”<cite>Hank Paulson, former U.S. Treasury Secretary &amp; former Goldman Sachs CEO</cite></blockquote>



Throughout her decades-long career, Porat has seen great success bridging divides to find solutions. “The biggest compliment I can give someone is to say they are a real difference maker—that’s Ruth,” says Hank Paulson, former U.S. Treasury Secretary during the financial crisis and a former CEO of Goldman Sachs. In 2013, Porat landed on President Barack Obama’s shortlist for deputy treasury secretary until she withdrew her name,&nbsp;<a href="https://dealbook.nytimes.com/2013/03/28/ruth-porat-withdraws-name-from-deputy-treasury-race/" target="_blank" rel="noreferrer noopener">reportedly</a>&nbsp;over concerns of how bankers were being treated by politicians. “She&#8217;s a real U.S. patriot with a passion for public service.”&nbsp;



To be fair, Google’s efforts are not just altruism. They are growth engines for big business—and of course, some good publicity doesn’t hurt. The over 30 million small businesses across the U.S. drive nearly half of all of gross domestic product. Globally, small and medium-sized enterprises represent over 90% of the business population and 55% of gross domestic in developed economies, according to the&nbsp;<a href="https://www.ifac.org/knowledge-gateway/contributing-global-economy/discussion/foundation-economies-worldwide-small-business-0" target="_blank" rel="noreferrer noopener">World Trade Organization</a>. And like many of their industry peers like Facebook, Google relies on small businesses for a sizable portion of their business, although they, along with their competitors, do not disclose the actual amount.



“I look back on some of the toughest times in my career, and I know that I’ve learned from them,” says Porat, a two-time breast cancer survivor.  “That ghastly, terrifying experience was also a gift because that proverbial question became all too real: What happens if you are given no more than five years to live?” she shared in her <a rel="noreferrer noopener" href="https://www.youtube.com/watch?v=dGdugTS_RR8" target="_blank">2016 Wharton commencement speech</a>. “So I set about figuring it out: What did I want to do with what could be a limited amount of time? And I realized I simply had no regrets. I hadn’t punted on my life—I hadn’t put things on hold. My lesson from that awful experience was that if you want to do something, then do it . . . life doesn’t know it’s supposed to follow a schedule.”



<blockquote class="wp-block-quote has-text-align-center is-style-large is-layout-flow wp-block-quote-is-layout-flow">“In the midst of tremendous disruption and market turmoil, Ruth’s judgment and experience are invaluable.”<cite>Stephen Schwarzman, cofounder &amp; CEO of Blackstone</cite></blockquote>



That can-do anything attitude and fortitude may just be a key part of her recipe for not just surviving crises—but emerging stronger as a result of them. “In the midst of tremendous disruption and market turmoil, Ruth’s judgement and experience are invaluable,” says Stephen Schwarzman, cofounder and CEO of Blackstone. “It is rare to find people who have operated at the highest levels on Wall Street and Silicon Valley and that combination is exceptionally powerful.” In June, she joined the board of the $564 billion private-equity powerhouse, whose IPO she also worked on in 2007.



Porat is quick to acknowledge that the tough times she’s endured pale in comparison to much of the pain being felt in the world today. Yet, history has taught her to still believe in the promise of better days ahead.&nbsp;



 “For those who are looking at this moment and wondering the path forward, I would say that having lived through many turbulent times before, there are recoveries,” she says. “New opportunities arise out of crises.”



by Maneet Ahuja, Forbes Staff

Fortune Most Powerful Women Summit 2018 – Day 1

Exclusive: Ruth Porat On Leading Through Crisis And Google’s Latest Moonshot To Rebuild The U.S. Economy—One Small Business At A Time

American credit rating agency, Fitch, announced on September 24 that it has downgraded Zambia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from &#8216;CC&#8217; to ‘C’. The country’s senior unsecured foreign currency bonds were also downgraded this week.



This follows the Zambian government issuing a &#8220;consent solicitation&#8221; to holders of three global bonds (Eurobonds) on September 22, requesting a suspension of debt service payments for six months. This would effectively be covering the upcoming three coupon payments due on October 14, and January and March 2021.



Zambia’s Ministry of Finance stated that the country has been confronted with challenging macroeconomic and fiscal situations aggravated by the Covid-19 crisis. This has severely impacted the country’s public finances.



“A combination of declining revenues and increased unbudgeted costs caused by the Covid-19 pandemic has resulted in a material impact on the Government’s available resources to make timely payments on its indebtedness leading to increasing debt-servicing difficulties,” Fredson Yamba, Secretary to Treasury, said in a statement on Tuesday.



In its report, Fitch stated that should bondholders agree to the suspension in payment, this would constitute a distressed debt exchange (DDE).



“The authorities have indicated that they will continue to make debt service payments on outstanding Eurobonds if an agreement is not reached. However, Fitch judges that there is a high risk of a missed debt payment over the forecast horizon,” Fitch said in its press release.



The Zambian government further said in a statement that they are still engaging with the International Monetary Fund (IMF) to secure financial assistance. The government hopes to create a program of reforms that would help in stabilizing the macroeconomic outlook of the country and restore its fiscal balance.



“In this context, the government is committed to finding a consensual and collaborative resolution to the debt sustainability issues it is currently facing,” Yamba said.



The ‘CC’ rating, which occurred on April 16, due to the sovereign’s constrained external liquidity exacerbated by the pandemic, meant that the country was left in a highly vulnerable position, financially. How will this newly downgraded rating bode for Zambia now?



“The downgrade of Zambia&#8217;s rating reflects Fitch&#8217;s view that a default event is imminent.”

Graph Falling Down in Front Of Zambia Flag. Crisis Concept

Zambia’s Credit Rating Downgraded to Near Junk Status

As the coronavirus crisis wears on, new research from the Pew Research Center shows that public perception of the economy has “<a rel="noreferrer noopener" href="https://www.pewresearch.org/fact-tank/2020/09/03/views-of-the-economy-have-turned-sharply-negative-in-many-countries-amid-covid-19/" target="_blank">turned bleak</a>” in large parts of the world.



KEY FACTS



A median of 68% of people considered their country’s current economic situation to be bad, the researchers found, while 31% said conditions were good.&nbsp;



Italy had the largest portion of people who rated the economic situation negatively, with 90% describing the situation as “bad.”&nbsp;



In eight of the 14 countries surveyed, including the U.K., France, and South Korea, the majority of people expected their countries’ economies to get worse.



In the United States, Germany, and Canada, however, people were more likely to say that the economy would improve over the next year than to say it would get worse.&nbsp;



The researchers noted that in nearly every country they surveyed, the perception of how bad the economy is tied to how the country handled the coronavirus crisis: people who viewed their country’s response negatively were more likely to have a negative view of the economic situation.&nbsp;



CRUCIAL QUOTE



“In addition to the broadly negative assessments of current economic conditions, few in the countries surveyed are hopeful things will get better in the next year,” researchers Shannon Schumacher and Mara Mordecai wrote.&nbsp;



KEY BACKGROUND



Countries all around the world are now faced with the dire economic consequences of the pandemic. Australia has entered its&nbsp;<a href="https://www.nytimes.com/2020/09/02/business/australia-recession.html" target="_blank" rel="noreferrer noopener">first recession</a>&nbsp;in almost 30 years. The United Kingdom has entered&nbsp;<a href="https://www.bbc.com/news/business-53748278" target="_blank" rel="noreferrer noopener">its first recession</a>&nbsp;in more than a decade; CNN reports that the U.K.’s economy shrunk by&nbsp;<a href="https://www.cnn.com/2020/08/28/economy/global-recession-g7-countries/index.html" target="_blank" rel="noreferrer noopener">more than 20%</a>&nbsp;between April and June. France just unveiled a<a href="https://www.reuters.com/article/us-france-economy/france-unleashes-100-billion-euro-stimulus-to-revive-economy-idUSKBN25U0IA" target="_blank" rel="noreferrer noopener">&nbsp;$118 billion stimulus&nbsp; plan</a>&nbsp;to combat its own economic woes. Japan’s economy saw its biggest downturn on record, the BBC&nbsp;<a href="https://www.bbc.com/news/business-53802967#:~:text=Coronavirus%3A%20Japan%20suffers%20its%20biggest%20economic%20slump%20on%20record,-17%20August%202020&amp;text=The%20Japanese%20economy%20has%20shrunk,27.8%25%20on%20an%20annualised%20basis." target="_blank" rel="noreferrer noopener">reported</a>, after its GDP fell nearly 8% between April and June. In the United States, trillions in stimulus spending is on track to push debt to GDP levels above 100% next year.&nbsp;



FURTHER READING



<a href="https://www.pewresearch.org/fact-tank/2020/09/03/views-of-the-economy-have-turned-sharply-negative-in-many-countries-amid-covid-19/" target="_blank" rel="noreferrer noopener">Views of the economy have turned sharply negative in many countries amid COVID-19</a>&nbsp;(Pew Research Center)



<a href="https://www.forbes.com/sites/sarahhansen/2020/09/02/thanks-to-stimulus-spending-us-debt-expected-to-exceed-the-size-of-the-entire-economy-next-year/#7ad2290d2384">Thanks To Stimulus Spending, U.S. Debt Expected To Exceed The Size Of The Entire Economy Next Year</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/07/30/economy-shrank-at-historic-33-annual-rate-in-second-quarter-but-thats-not-the-whole-story/">Economy Shrank At Historic 33% Annual Rate In Second Quarter—But That’s Not The Whole Story</a>&nbsp;(Forbes)



-Sarah Hansen, Forbes Staff

Business office is closed, bankrupt business, global economic crisis impact by Coronavirus COVID-19 pandemic concepts. Unidentified person wearing mask put closed sign on front door with 3d viruses recession graph

Coronavirus Crisis Has Led To ‘Bleak’ Perception Of The Economy, Study Says

The newly-established delivery app industry in Tanzania is serving up old business in a new format, diversifying the e-commerce market and driving consumer behavior beyond Covid-19.



When Zadok Prescott first started the home delivery application, Piki Tanzania, he only thought of it as a supplement to restaurant dining. However, when Tanzania also fell victim to the Covid-19 crisis in March, Piki, which was still new and the only established app of its kind in the country, soon became the only way some restaurants were doling out their services.



“I think a lot of people took that decision to stay at home and avoid contact. So, we suddenly realized how important we were becoming,” says Prescott, also former CEO of Jumia Tanzania.



At the end of November 2019, Jumia, Africa’s leading online retailer known as the ‘Amazon of Africa’, had shut its e-commerce operations in Tanzania in a review of its portfolio.



However, ironically, since the beginning of 2020, in the very market that Jumia exited, multiple e-commerce platforms suddenly sprung up, from food and grocery delivery apps to ‘online malls’ that sell commercial goods, besieging a market still relatively new to online shopping and dining.



With Covid-19, the role these platforms played in the lives of local businesses changed almost overnight.



<figure class="wp-block-gallery columns-1 is-cropped wp-block-gallery-1 is-layout-flex wp-block-gallery-is-layout-flex"><ul class="blocks-gallery-grid"><li class="blocks-gallery-item"><figure><img loading="lazy" decoding="async" width="1024" height="763" src="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM-1024x763.jpeg" alt="" data-id="47147" data-full-url="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM.jpeg" data-link="https://www.forbesafrica.com/?attachment_id=47147" class="wp-image-47147" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM-1024x763.jpeg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM-300x224.jpeg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM-600x447.jpeg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM-768x572.jpeg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-01-at-7.36.31-PM.jpeg 1080w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure></li></ul></figure>



For Levant, a fine dining restaurant offering Middle Eastern cuisine in upscale Dar es Salaam, delivery was not the path they wanted to take, but had to.



“When Covid-19 hit, our sales were 90% lower. Our plan was to give an experience, it’s not only the food you eat… [but] we realized people were afraid, so we had to focus on delivery… take-away was most of our sales,” says Hussein T Hamadi, the owner of Levant, which started delivering through Piki when the pandemic hit and even started its own delivery service.



Although this is the path Levant opted, Hamadi does not see delivery and e-commerce playing a significant role in his business with restaurants now reopening in full swing in the country.



Piki surely has an advantage in the country with its reliable infrastructure and experience, but the commissions are not reasonable in Hamadi’s opinion, since his own delivery service costs him much less.



He would rather people came into his restaurant because this is part of the service he wants to offer.



In addition to that, Hamadi is opening yet another restaurant, with a more delivery-friendly menu and where he hopes e-commerce may be more feasible.



On the other hand, Central Park Café, an American-style café and children’s park and venue that also works with Piki, does not see any way in which businesses, going forward, can avoid e-commerce.



“During these times, people rely on [Piki]… it’s basically a lot of the weight lifted off us for the pressure because it is a very tough market and things are very unpredictable here,” says Sidiqua Versi, co-owner of the café.



The fact that the liability for deliveries is also no longer her problem is an advantage, she adds.



Versi agrees the delivery and commission fees are not reasonable for all, and individual delivery is far more financially sustainable, but an app like Piki is reliable and she would rather keep working with them to use their customer base and keep her service timely and efficient.



However, she has noticed customers opting for cheaper options and more players foraying into the market with unique business models.



<figure class="wp-block-gallery columns-1 is-cropped wp-block-gallery-2 is-layout-flex wp-block-gallery-is-layout-flex"><ul class="blocks-gallery-grid"><li class="blocks-gallery-item"><figure><img loading="lazy" decoding="async" width="1024" height="683" src="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM-1024x683.jpeg" alt="" data-id="47148" data-full-url="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM.jpeg" data-link="https://www.forbesafrica.com/?attachment_id=47148" class="wp-image-47148" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM-1024x683.jpeg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM-300x200.jpeg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM-600x400.jpeg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM-768x512.jpeg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.32-PM.jpeg 1080w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure></li></ul></figure>



New players, renewed approaches



Duka.direct is an online grocery delivery service that runs on a platform created by Selcom Tanzania, a digital payment system developer that also saw a very quick change in consumer behavior when Covid-19 gripped the country.



“The adoption was a lot faster than we had anticipated and we even had to accelerate deployment quite rapidly,” says Sameer Hirji, Executive Director of Selcom. It is planning to expand to a range of services to include restaurant food delivery, as well as connecting to businesses selling electronics, pharmaceuticals and other items, eventually throughout the region. However, its approach is not only controlling the supply of products, but in the long run, seeing itself as more than just being a customer experience and service provider.



“We’re thinking like a financial services business, but using consumer goods and services… We want to hopefully one day make e-commerce extremely mainstream and as a result, for the common man, who previously couldn’t afford maybe cheese, because it was marked up at like 30% at a supermarket, to be able to access those premium products and consume them more readily and rapidly,” he says.



He hopes to eventually pilot using Selcom’s widely-used payment agents to act as sales and pickup points, as well as introduce lending on the apps to allow customers to buy goods by borrowing from banks Selcom has relationships with.



“At least initially, [duka.direct] can be a standalone business [not making much profit]. But it needs to be part of something bigger that can feed it, and then continuously grow it…



“I think raising awareness and giving back value is where we see the market going,” he adds.



The biggest problem Hirji’s platform did face during the time was running out of space and local suppliers who were not able to keep up with the demand.



“That right image in the market matters in terms of what the delivery, the last mile, looks like… [and] to a great extent the optics it presents in the market in terms of brand and professionalism,” says Hirji.



However, there are players in the market like Inalipa, a platform that mimics an ‘online mall’ with a variety of local shops and brands, ranging from Instagram businesses to large retailers, that has internalized all operations.



“I’m sure our competitors, because of our model, have much higher volumes than us. But the experience that the customer gets with us is something that stands out… We’re able to control the entire customer experience. And I think for us, that’s the big differentiator,” says Nadeem Juma, chairman of AIM group, which developed and runs Inalipa.



Inalipa also takes a slightly different approach by aggregating retail suppliers and leveraging their brands. While Juma says it was initially not easy to bring them on, Covid-19 forced Inalipa to be able to tell them a story of how this would impact their business positively.



“Trading is actually what the bulk of Tanzanian business is built on… it’s really old business in a new format. And that’s the way we look at it… We aren’t trying to change the culture or the way a consumer purchases traditionally; we are enabling that same experience on a digital platform,” he adds.



&nbsp;But even with trying to maximize customer satisfaction, Juma found that the number one question among customers who went through the process of putting items in their cart was that they weren’t sure if they could trust the platform.



“Right now, we’re realizing that people are the early adopters, starting off with very small basket sizes and now those basket sizes are growing.”



Duka.direct provides store credit and uses marketing to build credibility and confidence and Inalipa uses customer service calls to encourage people to go through with purchases.



“What [Covid-19] showed us is there’s enough space in the market for different players as long as they’re very focused on what they’re trying to achieve and not trying to do a little bit of everything,” says Juma.



The direct contact and understanding of the local market is a large advantage to players in the market, according to Prescott, and is what differentiates them.



<figure class="wp-block-gallery columns-1 is-cropped wp-block-gallery-3 is-layout-flex wp-block-gallery-is-layout-flex"><ul class="blocks-gallery-grid"><li class="blocks-gallery-item"><figure><img loading="lazy" decoding="async" width="1024" height="683" src="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM-1024x683.jpeg" alt="" data-id="47152" data-full-url="https://www.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM.jpeg" data-link="https://www.forbesafrica.com/economy/2020/08/19/tanzanias-recent-app-boom-a-new-market-for-e-commerce/attachment/whatsapp-image-2020-07-06-at-2-50-37-pm/" class="wp-image-47152" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM-1024x683.jpeg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM-300x200.jpeg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM-600x400.jpeg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM-768x512.jpeg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/08/WhatsApp-Image-2020-07-06-at-2.50.37-PM.jpeg 1080w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure></li></ul></figure>



Looking into the future



Both Hirji and Juma acknowledge that the global valuation-driven approach to e-commerce, which was Jumia’s too, is not necessarily the approach that can work in Tanzania.



“I don’t believe that that is the appropriate way to go about e-commerce because you really cannot raise money at that scale continuously to be sustainable. You have to make it a profitable business… You need to identify what are the levers, one of the things that you want to drive, and then map that out over a period of time” says Juma.



Being in the digital space does allow you to pivot faster, according to Hirji.



And this can be especially useful in navigating the regulatory landscape in Tanzania because of the penetration of mobile money, in Juma’s opinion.



“It’s a highly regulated space. So you need to be aware of what you can and can’t do. And sometimes that can be what could slow you down… But I think it also allows you to contribute to the actual country’s growth as well.”



However, Tanzania is still a difficult market, with about 60% market share in terms of smartphones in the country and utilization under 20%, and if the penetration is further discounted by the number of people who will actually swap their traditional practices for an e-commerce experience, then that drops even more, says Hirji.



Such data is available, but not in much detail about e-commerce, mostly because of how the market has diversified only recently in the country.



Juma believes there is a greater good if everyone is a bit more open and transparent in sharing their experience of this business, as Inalipa’s data collection has shown customer sets that he didn’t know existed.



While Prescott acknowledges Jumia did educate the Tanzanian market on the e-commerce experience, there is a long way to go in terms of how consumer behavior will change or adapt in the country to prove sustainable beyond e-commerce being a critical service in the time of Covid-19.



“It’s certainly beyond just your traditional corner store saying, ‘I want to go digital because everyone else is going online’. I think there’s a roadmap that’s a lot more sophisticated than just a Shopify storefront,” says Hirji.&nbsp;



– By Inaara Gangji

WhatsApp Image 2020-07-06 at 2.50.39 PM

Tanzania’s Recent App Boom: A New Market For E-Commerce

The coronavirus pandemic has thrown millions of Americans into financial distress, but new <a rel="noreferrer noopener" href="https://libertystreeteconomics.newyorkfed.org/2020/08/the-disproportionate-effects-of-covid-19-on-households-with-children.html" target="_blank">research</a> from the Federal Reserve Bank of New York shows that the economic impact has been especially pronounced for households with children. 



KEY FACTS



Households with children under 18 living at home are more likely to have lost jobs and income: household heads lost their jobs in 12.9% of households with children compared to 9.2% of households without them, the study found.&nbsp;



They’re also more likely to have missed rent or debt payments: 19.5% of households with children said they skipped a rent, mortgage, auto loan, credit card, or student loan payment compared to 12.5% of households without.



Families with kids are also more likely to rely on external support like unemployment benefits, food stamps and food banks, and financial support from family and friends.



This reliance is even higher among single-parent, non-white households and households in low-income neighborhoods, the researchers found.&nbsp;



All this, of course, is only compounded by the added burdens of virtual schooling and closed childcare facilities that working parents and caretakers must contend with.



BIG NUMBER



39%. That’s the portion of households with children that reported income losses, compared to 30.8% of households without.&nbsp;



CRUCIAL QUOTE 



“Our results reveal high reliance by [households with children], and especially those headed by a single parent, on food and financial support from social networks as well as government assistance in the form of SNAP and unemployment benefits since the onset of the COVID-19 pandemic,” the researchers wrote. “While a greater reliance on assistance undoubtedly predates the pandemic, the high rates of job and income loss experienced by households with children has clearly heightened the importance of such support.”



KEY BACKGROUND



Several key benefits of the CARES Act have expired—most notably supplemental unemployment benefits and eviction protections for certain renters—but the Trump administration and top Democratic lawmakers have been unable to come to an agreement on what the next round of federal stimulus legislation should look like. The $3 trillion Heroes Act, passed by the Democrat-led House in May, included additional support for federal unemployment and nutrition assistance, along with another round of direct stimulus payments and hazard pay for essential workers. The Republican-led Senate never took up the bill, though it did release its own plan—the Heals Act—last month. When Democratic lawmakers and White House policymakers were unable to reach a compromise last week, President Trump took&nbsp;<a href="https://www.forbes.com/sites/rachelsandler/2020/08/08/600-weekly-unemployment-check-cut-to-400-under-trump-executive-orders-and-more/">executive action over the weekend</a>&nbsp;with respect to enhanced unemployment benefits, student loans, eviction protections and a payroll tax deferment. Those actions alone, however, aren’t likely to be as effective in propping up the economy as would legislation from Congress.&nbsp;



<h2 class="wp-block-heading">FURTHER READING</h2>



<a href="https://www.forbes.com/sites/sarahhansen/2020/08/12/second-stimulus-negotiations-appear-to-be-at-a-standstill-heres-what-could-happen-next/">Second Stimulus Negotiations Appear To Be At A Standstill, Here&#8217;s What Could Happen Next</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/06/05/heres-what-the-racial-wealth-gap-in-america-looks-like-today/">Here’s What The Racial Wealth Gap In America Looks Like Today</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/08/11/heres-why-that-400-unemployment-check-from-trumps-executive-order-may-not-happen/">Here’s Why That $400 Unemployment Check From Trump’s Executive Order May Not Happen</a> (Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/08/13/unemployment-claims-clock-in-under-1-million-for-first-time-since-coronavirus-crisis-began/">Unemployment Claims Clock In Under 1 Million For First Time Since Coronavirus Crisis Began</a> (Forbes)



-Sarah Hansen, Forbes Staff

Re-opening Continues Across Densely Populated New York And New Jersey Areas

The Coronavirus Recession Has Been Worse For Families With Kids, N.Y. Fed Finds

The market finished lower on Tuesday as Big Tech stocks posted declines which offset an initial rally sparked by Russia&#8217;s claims that it approved the world’s first coronavirus vaccine.



KEY FACTS



The Dow Jones Industrial Average was down 0.4%, around 100 points, on Tuesday, while the S&amp;P 500 fell 0.8% and the tech-heavy Nasdaq Composite lost 1.7%.



Although stocks moved higher for most of the day—with the Dow at one point rising over 350 points, all three major indexes turned negative in the final hour of trading.



Investors continued to rotate out of Big Tech stocks, dragging the market lower: Shares of Amazon, Microsoft, Apple, and Netflix all fell between 1% and 2%.



Stocks initially rose following Russian President Vladimir Putin’s overnight announcement that his country was the first to&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2020/08/11/russia-has-approved-worlds-first-covid-19-vaccine-putin-says/#444798ff59a3">grant regulatory approval</a>&nbsp;for a coronavirus vaccine, after less than two months of human testing.



While Russia’s rapid approval of the vaccine has met with skepticism and&nbsp;<a href="https://www.reuters.com/article/us-health-coronavirus-russia-vaccine-put/russia-becomes-first-country-to-approve-a-covid-19-vaccine-says-putin-idUSKCN25712U?il=0" target="_blank" rel="noreferrer noopener">raised concern</a>&nbsp;among medical experts, the news did spark optimism among investors that a vaccine could be available in the U.S. sooner than expected.



Shares of companies that would benefit from a vaccine and a reopening of the economy—including airlines, cruise stocks and retailers—jumped on the news Tuesday.



CRUCIAL QUOTE



“Although the timing is uncertain, the stock market is expressing confidence that the pandemic will end eventually with a vaccine—or multiple vaccines—and with help from better treatments in the interim,” says Jeff Buchbinder, equity strategist for LPL Financial.



WHAT TO WATCH FOR



Ongoing coronavirus stimulus talks, which ended in a stalemate last week. President Trump on Saturday issued several executive orders to extend economic relief programs, such as expanding federal unemployment benefits—at a reduced rate of $400 per week, deferring student loan payments through 2020, extending a federal moratorium on evictions and providing a payroll tax holiday. But Trump’s executive action was met with criticism from both parties and is likely to face legal challenges, since continuing the programs would require federal funding from Congress. Treasury Secretary Steven Mnuchin&nbsp;<a href="https://www.forbes.com/sites/sarahhansen/2020/08/10/mnuchin-says-white-house-is-willing-to-put-more-money-on-the-table-for-next-stimulus-bill/">said</a>&nbsp;on Monday that the White House is open to resuming coronavirus relief talks with Democrats and is willing to provide more relief money in order to make a compromise.



TANGENT



After nine straight weeks of gains, the price of Silver plunged 14% on Tuesday, its biggest one-day loss since 2008. Gold also fell 5.5%, hitting its lowest level since last month.



SURPRISING FACT



So far, 448 companies in the S&amp;P 500 have reported second-quarter earnings, with nearly 82% beating Wall Street expectations—the highest rate on record dating back to 1994, according to Refinitiv data. Just over 16% of companies so far have failed to meet expectations.



FURTHER READING



<a href="https://www.forbes.com/sites/sergeiklebnikov/2020/08/11/goldman-predicts-at-least-one-vaccine-approval-before-the-end-of-2020-raises-gdp-estimate/">Goldman Predicts ‘At Least One’ Vaccine Approval Before The End Of 2020, Raises GDP Estimate</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/siladityaray/2020/08/11/russia-has-approved-worlds-first-covid-19-vaccine-putin-says/">Russia Has Approved World’s First Covid-19 Vaccine, Putin Says</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sergeiklebnikov/2020/08/10/dow-jumps-350-points-after-trump-signs-executive-orders-to-extend-coronavirus-relief/">Dow Jumps 350 Points After Trump Signs Executive Orders To Extend Coronavirus Relief</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sarahhansen/2020/08/10/mnuchin-says-white-house-is-willing-to-put-more-money-on-the-table-for-next-stimulus-bill/">Mnuchin Says White House Is Willing To Put ‘More Money On The Table’ For Next Stimulus Bill</a>&nbsp;(Forbes)



&#8211;Sergei Klebnikov, Forbes Staff

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