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HIGHER EDUCATION IN AFRICA AND THE RESOURCE GAP

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The economic and political transformation of a country directly correlates with the education level of its demographics. With national priorities like health care, infrastructure, housing etc, it’s impossible for countries to manage supporting the entire value chain of education, from primary to secondary to vocational and tertiary. Add infrastructure and skills-development to the need for integrated research-based learning synonymous with quality education and what you have is a glaring resource gap.

This dilemma is consistent across most countries in the world, particularly those with low GDP per capita. Rather than concerted efforts, governments have spread themselves thin trying to do everything with limited resources. This has unfortunately resulted in mismanagement, no accountability, corruption and disillusionment. The intangible destruction of long-term wealth creation is in excess of the annual financial allocation as there is a widening gap between skills needed and the output from the efforts.

A growing question therefore is: where does a government allocate its resources and how does it integrate private sector investments? The answer is complex and not a one-size-fits-all solution.

During my travels in Africa over the last ten years, I have interacted with heads of state, ministers of education, regulators, and educational faculty. The maze of bureaucracy, legislation and processes created using historic models of education is shocking. It’s small wonder no one is willing to grab the bull by its horns and bring changes to help Africa leapfrog into the future rather than dwell in the past.

I will reflect on the tertiary sector. Looking at Africa, South Africa excluded, one sees a lack of good quality universities. It’s no surprise to see some 400,000 students going abroad for post-secondary programs annually, with nearly 300,000 originating from sub-Saharan Africa. With continuing growth of populations, economic output, and school and post-secondary enrolment rates, it’s expected one in five outbound mobile students will originate from Africa within the next 20 years.

It’s evident the business models of universities globally factor international students as a revenue source. These students pay higher fees. The irony is poor African countries are in many ways subsidizing the education of students of developed countries. The most unfortunate impact of this dichotomy is less than half the students return to the continent to add any value to the country that not only paid for their education but also subsidized their peers and for their pains, suffer a

brain drain.

Let’s put this in the context of the future. United Nations’ world population projections see it increasing to 9.6 billion by 2050, up by 2.4 billion from the current population. More than 50% of this growth will come from Africa (source: The Size of it, The Economist; June 18, 2013). Africa’s population will increase from about 10% of the world’s population to over 20% by 2050. It will undoubtedly have the youngest population on the planet and if transformation in the education sector is not made on a war-footing, the outcome is going to be catastrophic.

To cater to the population and given the overflow in current institutions, there is need to establish between 450 to 500 colleges and universities in Africa over the next 10 years. This growth needs investments in billions of dollars that governments clearly do not have. Firstly, legislation needs to be amended for foreign universities to establish on the continent. This is just one step to build capacity.

There are multifold advantages of bringing quality education brands to the continent. Firstly, these institutions are highly-ranked and bring with them best practices, systems, faculty, research capacity and world-class curriculum. The model should entail that the quality of academic delivery and entry requirements on the African campus should be the same as the home campus. It should allow students to transfer freely between various campuses for a global experience. The accreditations of these institutions should be based on degrees being offered by the home campus.

Secondly, there will be a slowdown of students going abroad focused mainly towards specialized training and not routine undergraduate or post-graduate courses. This will help retain skills in the region and conserve the foreign exchange drain. Thirdly, over time, the African branches of foreign universities will attract global students. Given the lower costs, excellent weather and natural beauty of Africa, there is no reason why education cannot become part of the continent’s export ecosystem. This will become increasingly important as universities in developed countries find it difficult to invest in new facilities owing to costs.

Another step governments must institute immediately is an offset program. All large defence, infrastructure, energy, mining and other contracts given to international or local companies should require a contribution towards setting up an international university in the country either through direct investment or through a centralized education fund. Similarly, all students sent to foreign universities through state funding must require the beneficiary university to offer some of their programs.

The other vital need is innovation. Education is no longer going to be about land and building. Consumption patterns of education are changing and with technology and broadband infrastructure development will emerge the opportunity for African states to bring about the latest delivery platforms. Changes from innovations are already being implemented by well-established universities in developed countries. Partnerships with them will help shorten the learning curve.

These illustrations demonstrate the need for the education ecosystem in Africa to be catalyzed. This can only happen through proactive steps for dynamic reforms from our leaders.

 

– Rakesh Wahi is Vice-Chairman and

Co-founder of ABN Group.

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Economy

Cryptocurrency for Africans

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George Gordon is on a quest to revolutionize the financial system. The director of Africa Master Blockchain Company talks digital currencies, blind risks and board games.


What is this new African cryptocurrency you are offering?

Where the majority of current digital currencies are based on speculative models, AfriUnion Coin (AUC) and the AfriNational Tokens (ANT)are designed for a transactional purpose allowing international payments, remittances, foreign direct investment as well as day-to-day transactions at local retail stores and other outlets. While the option for speculative trade is available with AUC, the focus is not around that.

Each African country will have a specially-designed ANT which will allow users to pay for goods and services and bills easily through completely digital means without requiring any bank account. AUC and ANT will be fully interchangeable to one another and there will be no fees for the user.

It’s the natural next step for digital finance from mobile banking which most Africans are accustomed to. The ability to freely have the power to send and receive money locally and internationally will allow the freedom of choice and spending power many Africans don’t have currently.

What is your own investment philosophy?

I am a gambler! I believe in taking risks and putting things on the line. That being said, blind risk or whimsical guesses don’t get you very far. Always acquire enough information to understand to a reasonable level what the thing you are planning on investing is or how it works and then trust your instinct and gut feel.

What advice would you give entrepreneurs wanting to invest in blockchain?

First, do some research in terms of what the blockchain technology is being applied for or created in terms of its application to an industry or project. Thereafter, check the white paper for the design of the platform as well as its functionality and applicability to what it is trying to achieve. If it aligns with your personal investment rules, then go for it,however, remember that blockchain is continuously evolving and thus you need to explore outside the usual and standard.

First cash-less, now card-less. What is the future of online banking?

If we are looking into what is currently science fiction, I would say the future is digital contact lenses that will be able to connect you to all your social media accounts, internet, news as well as make payments by just looking at QR codes or specialized barcodes to approve and accept payments.

Now, realistically we are not far off from such innovation and technology, but for the time being, I think the next step is scanning of QR codes at retailers and having the transaction automated from your wallet to the retailers digitally.

What is your most prized investment and why?

My mind. I believe that the work I have put into developing my mind, and continue to do so every day, is the number one investment that I have ever done. It allows me to look at things in a unique perspective as well as provides me with the tools to push boundaries and create new opportunities.

Money, success, fame? Which is most important to you?

I would have to say success… because it is most likely going to bring the other two as well, right? But success in the form of starting something and letting it grow and succeed and knowing that something new exists because of your efforts.

What do you spend your money on mostly?

Board games. I love board games and believe it’s a fantastic way to expand your mind as well as have fun with friends.

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Investment Guide

King Price CEO On Why He Invested On Insurance

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King Price Insurance’s CEO Gideon Galloway, who built an insurance company in South Africa worth over $226 million in six years, talks investments, industry trends and how self-driving cars will change the entire car insurance landscape.

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Economy

Offering The American Dream

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Gar Lippincott and Daniel Ryan of Atlantic American Partners were in South Africa recently looking for high-net-worth individuals wanting to invest in the US.

It’s a warm spring day in September, and Gar Lippincott and Daniel Ryan have just arrived in South Africa. It is Lippincott’s first time in the country, and he is jet-lagged.

A little over two months ago, he was booked to fly here from the United States (US) but was turned back at immigration.

“At Atlanta airport, the lady looked at Daniel’s visa and let him through and she looked at my visa and she said ‘I am afraid you can’t get on the plane because you have to have a blank page on your passport’. I said ‘I have three blank pages’ and she said ‘no, it’s supposed to be the one that says visa on it’. She said it’s the rules in South Africa so I had to sadly go back home… now when I was coming, I was told that’s not an issue anymore so I am happy they have made traveling into the country easier,” says Lippincott.

With a brand-new passport, he’s here with Ryan looking for people who want to invest in the US in exchange for a green card.

Lippincott, the Managing Partner of Atlantic American Partners, says he has always been keen on South Africa for its growth opportunities and prospects.

“From what I understand, the things that are causing short-term decline in the economy in South Africa are set up to provide long-term growth and hopefully people will understand this,” he says. Ryan, the company’s Managing Director of Emerging Markets – Africa, agrees: “I lived in Malawi for 12 years and South Africa is still considered the shining one throughout the continent. Even with all the problems, everyone still wants to come here because of the opportunities.”

According to an AfrAsia Bank report, South Africa comes second to Mauritius in boasting the highest number of high-net-worth individuals.

These are the kind of people Ryan and Lippincott target through their work at Atlantic American Partners. The company has real estate investors and professional private equity fund managers that manage money for banks, insurance companies, and pension funds. In addition, they help people get US green cards and ultimately US citizenship through the US government’s EB-5 Immigrant Investor Visa Program.

“Basically we look for people who want to move to the United States and we help them do so legally by investing and the nice thing is, with our program, they are also able to get a nice return on investment,” he says.

According to Lippincott, for a $500,000 investment that creates 10 jobs for American workers, you could get a green card in about two years and be a US citizen in about six or seven years. “Twenty seven countries have an investor visa program but with most of them, it’s essentially a fee you pay, or you need to be actively engaged in the day-to-day operation of a business. For example, you invest $1.5 million in Australia, but you need to hire employees and generate a certain amount of revenue. One of the biggest advantages with our program is you actually invest the $500,000 into a fund. We act as a trustee of that money and within five to seven years, they get that money back with a bit of return on investment and you are a permanent citizen in the US.”

Atlantic American Partners invests the money in real estate developments like hotels, apartments and student accommodation.

“What’s nice about the program is it doesn’t only cover the investor; it covers the spouse and children under 21. Our biggest family was a Hungarian family with seven children so they got nine green cards for $500,000,” says Lippincott.

The company says it has had positive response in South Africa. “Two months ago, we were here and we had scheduled six presentations for 100 people and we ended up speaking to 450 people. Most were business people, people worried about the economy, people worried about the political future of South Africa and people concerned about the education future of their children,” says Ryan.

According to Lippincott, despite the news of the clampdown on immigration, the US economy is booming and will perish without immigration. In the era of Donald Trump and his anti-immigrant views, that’s heartening news indeed.

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