When Citigroup opened 2020, the most ambitious projects at the $2.2 trillion in assets lender involved major partnerships with technology companies best known for their internet, social media and ecommerce platforms.&nbsp;



In China, nearly 70% of the payments that Citigroup handles for customers are done through AliPay, the payments business spawned by Alibaba. Citigroup’s digital payments technologies are also present on other popular social messaging platforms like LINE and WeChat. The mega-lender recently launched a credit card partnership with fintech Paytm in India and in Singapore it uses chatbots on Facebook Messenger to help answer customer service inquiries. In November 2019, the bank made a big splash in the United States by unveiling a digital checking account with Google Pay.



These partnerships are part of a new reality for the banking industry’s most important players like Citigroup: Innovative and seamless digital banking capabilities are paramount in a business where basic financial products have become commoditized and rock-bottom interest rates make it hard for lenders to differentiate. Consumers are instead voting with their smartphones, demanding the ability to conduct their financial activities safely and easily on mobile phones and their desktops.



Never were these growing demands more important than during the coronavirus pandemic, which forced countries around the world to announce lockdowns to combat the spread of the virus. Unable to visit bank branches, consumers turned to mobile apps and online services to get transactions done. In the U.S., Citi saw an 84% increase in daily mobile check deposits in May and a tenfold surge in activity on Apple Pay as quarantined customers used digital and contact-less tools to handle their financial activities. The lender’s Mexican operations saw an 80% increase in mobile app logins in March. Downloads of its mobile app surged 116% from February to April, while digital bill payments rose 78%.&nbsp;



“Banking has changed irrevocably as a result of the pandemic. The pivot to digital has been supercharged,” says Jane Fraser, president of Citigroup and CEO of its gigantic consumer bank. “We believe we have the model of the future – a light branch footprint, seamless digital capabilities and a network of partners that expand our reach to hundreds of millions of customers.”



Citi’s increasingly digital approach is visibly evident in Forbes’ second ranking of the World’s Best Banks, based largely on customer satisfaction surveys. Citi rates highly in six of the 23 countries where customers were surveyed (Citi has retail operations in 19 countries).



Forbes partnered with market research firm&nbsp;<a href="https://www.statista.com/" target="_blank" rel="noreferrer noopener">Statista</a>&nbsp;to measure the best banks in nearly two dozen countries. Statista surveyed more than 40,000 customers around the globe for their opinions on their current and former banking relationships. The banks were rated on overall recommendation and satisfaction, as well as five subdimensions (trust, terms and conditions, customer services, digital services and financial advice). Between 5 and 75 banks were identified as top banks in each country, based on the total evaluations collected, the number of banks in the specific country and the scores achieved.



The 2008 financial crisis didn’t just usher in an era of consolidation and low rates that reshaped the banking industry globally, it also coincided with the mass adoption of the smartphone and a shift to digital banking. In the wake, a crop of web-first lenders emerged to challenge the world’s biggest banks and made offering end-to-end mobile banking features a matter of survival. The coronavirus only affirmed that there’s no looking back.



Amsterdam-based ING, ranked highly in eight nations, leading banks worldwide on our list in its reach. The lender, which has a legacy that dates back to the mid-1800s, is a technological pioneer in the banking industry, creating digital bank ING Direct in 1997 at the dawn of the internet age. While ING operates hundreds of bank branches in the Netherlands and Poland, it is known as an entirely web-based bank in markets like Australia, Germany and Spain where it ranks in the top-five.&nbsp;



ING now handles some 4.5 billion digital contacts a year, according to Aris Bogdaneris, head of challengers and growth markets at ING, and it is embarking on an effort to make its digital services uniform worldwide. “We are inspired by the giant technology platforms and their customer engagement,” says Bogdaneris, who points out that user experiences for technology platforms like Uber are the same, regardless of where a customer is located. “We started measuring ourselves more against these platforms than against traditional banks,” he adds.



Now, with Covid-19 affirming most digital banking trends, Bogdaneris wonders whether ING will go all-digital. Says Bogdaneris, “Where we have physical distribution and literally closed branches, [the question is] do we reopen them again? Do we actually need them?”



The other banks that rated highly in more than five regions include HSBC and Santander at six apiece, and digital bank N26, which rated first in Austria and Italy second in Spain and France, and #29 in Germany. Founded in 2013, N26 stands out because it has no physical branches but offers free ATM withdrawals worldwide and recently raised $270 million as part of a Series D round that valued the firm at $3.5 billion.&nbsp;



Digital upstart Nubank is the top-rated bank in Brazil, beating out an oligopoly of legacy banks on our list. “The penetration of the internet and the penetration of smartphones created a window of opportunity for us,” says founder and CEO David Velez. “Even as a startup we could compete head-to-head with the big banks. Suddenly, you didn&#8217;t need billions of dollars to build bank branches and you didn&#8217;t need hundreds of millions of dollars to buy mainframes from IBM. You could use the internet to acquire customers,” adds Velez, “It enables a model that has fundamentally lower costs and a better user experience.”



Growth at Nubank, which operates throughout South America, has been staggering. In 2019, the lender saw its customers surge from 6 million to 20 million and its private valuation now stands at $10 billion.



If there’s any doubt that digital-first banks are the way forward, Velez offers a surprising statistic: Since the pandemic began, Nubank has seen a surge in customers aged sixty and over, the types of clients many bankers once believed would never leave traditional branch networks. Over the past 30-days, for instance, some 300 clients above the age of 90 have become Nubank customers.



Digital banks rated well in the United States as well. Online-only Discover and Capital One ranked #23 and #30, while neobank Chime ranked #36. All three beat out mega-lenders JPMorgan Chase, #36 and Citigroup #71. The other big four lenders, Bank of America and Wells Fargo, didn’t make the top-75.



USAA was the highest-rated bank in the U.S. The bank is open to members of the U.S. military and their families and has more than 13 million members.



&#8211;<a href="https://www.forbes.com/sites/antoinegara/">Antoine Gara</a>, Forbes Staff, <a href="https://www.forbes.com/banking-insurance">Banking &amp; Insurance</a>

Lifestyle late night working Barcelona.

The World’s Best Banks: The Future Of Banking Is Digital After Coronavirus

Across
Africa, there is a growing trend of programs promoting entrepreneurship as the
silver bullet to many of the continent’s challenges. Pitch competitions are
many and varied, each one targeting a different demographic or segment of
industry: youth, women, creatives, inventors, agro-processors and so on. 



The
expectation and intention is to identify, breed and groom young people who have
developed ideas that can have a catalytic impact on the continent, and to
nurture their dreams and businesses to scale.



However, the pipeline to produce the kind of entrepreneurs that can succeed in enterprise creation that yields proportionate returns in expected areas such as job creation, reduced unemployment and food security is not yet fully developed. 



READ MORE | <a href="https://www.forbesafrica.com/current-affairs/2019/02/02/education-quality-and-the-youth-skills-gap-are-marring-progress-in-africa/" target="_blank" rel="noreferrer noopener" aria-label="Education Quality and the Youth Skills Gap Are Marring Progress in Africa (opens in a new tab)">Education Quality and the Youth Skills Gap Are Marring Progress in Africa</a>



Africa’s
schools are still prioritizing rote learning, theory over practice, and
outdated curricula that do not respond to the changing needs of the job market,
and few to no schools teach entrepreneurship to young people. 



Across
Africa, as the economies fail to create enough jobs for the over 10 million
young people entering the workforce each year, enterprise development remains
the best pathway to creating employment and ensuring sustainable livelihoods,
yet few governments have mainstreamed entrepreneurship education into their
curricula.



Mainstreaming
entrepreneurship education holds a key to job creation, not just through
self-employment, but as a small enterprise employing others. If each young
entrepreneur establishes an enterprise that creates at least five new jobs,
that can move the needle on youth unemployment across the continent. 



In order to do that, we need to focus on curricula that are practical and practice-able. We need to teach young people not just how things are made but how to make things. They need to learn not just how things are done, but how to do things.



READ MORE | <a href="https://www.forbesafrica.com/economy/2019/03/09/how-to-better-support-business-innovators/" target="_blank" rel="noreferrer noopener" aria-label="How To Better Support Business Innovators (opens in a new tab)">How To Better Support Business Innovators</a>



Mass
entrepreneurship, a concept which has been experimented within India, has had
some success. 



Delivering
this kind of change in education systems needs a systematic overhaul of
existing educational approaches. 



After all,
the question remains: can teachers successfully teach entrepreneurship? And if
so, can they do it effectively? 



Few models
exist on the continent or elsewhere that can be replicated. Theoretical
learning is still a dominant pedagogy, whereas evidence exists that
experiential education is the most effective approach.



Business education predominantly begins at the tertiary level, even though less than 10% of Africa’s high school graduates go on to university, according to the World Bank. 



If students are entering the job market after high school and becoming entrepreneurs by default rather than by design, they need to be equipped earlier on how to run businesses in order to increase their chances of success. 



<blockquote class="wp-block-quote">The word ‘entrepreneurial’ still mystifies many young people. The notion that all youth will start and run a business is largely a false premise. </blockquote>



Redefining
what it means to be entrepreneurial can be a key lever of change; being
entrepreneurial is not just about enterprise-creation but about mindset change.




It is about
thinking entrepreneurially and being solutions-oriented. Reorienting young
people from a foundation of profit-making to that of problem-solving is what
sets apart successful entrepreneurs from day dreamers. 



Starting
that education early, systematically and at scale, is key. 



– Elizabeth Bintliff the Accra-based CEO of Junior Achievement Africa, an organization focusing on youth empowerment.

Teenage girl leading dance class in studio

African Curricula That  Mean Business

Zimbabwe’s Reserve Bank has borrowed $985 million from African banks to purchase fuel and other critical imports with current reserves covering imports for just four weeks, underscoring the severity of dollar shortages, governor John Mangudya said.



The southern African nation last month ditched a discredited 1:1 dollar peg for its surrogate bond notes and electronic dollars, merging them into a lower-value transitional currency called the RTGS dollar.



Mangudya said the central bank borrowed $641 million from the African Export and Import Bank, $152 million from Eastern and Southern African Trade and Development Bank, and $25 million from Mozambique’s central bank, among others.



The loans, which would be repaid from future gold earnings, have a tenure of between three and five years and attract an interest of up to 6 percent above the Libor rate, Mangudya said.



Gold is Zimbabwe’s single biggest mineral export earner, accounting for a third of its $4.2 billion earnings last year after a record output, central bank data shows.



“These loans are well structured facilities contracted last year. They will be paid from future (gold) export receivables,” Mangudya told a parliamentary committee.



The central bank takes 45 percent of dollar sales from gold producers and half from other miners to fund imports like fuel and power and repay foreign loans.



But the miners only have 30 days to keep their dollar balances in local foreign currency accounts, after which they must sell them. The companies have asked the central bank to extend the period they may keep their dollars to 90 days, according to mining executives.



<h4>OVERDRAFT LIMIT</h4>



Unable to get funding from foreign lenders like the International Monetary Fund and World Bank due to arrears of more than $2.4 billion, Zimbabwe has looked to financiers from the continent and local banks to shore up its budget.



The central bank chief said Zimbabwe had just $500 million in reserves, enough to purchase four weeks’ worth of imports.



Mangudya said government borrowing from the central bank reached $2.99 billion in December, about three times its permissible overdraft limit.



 President Emmerson Mnangagwa’s government has promised to curb borrowing in 2019 under reforms to revive the southern African economy, after the budget deficit soared last year following a spike in spending ahead of elections.



Finance Minister Mthuli Ncube said last week that the local RTGS dollar, Zimbabwe’s new de facto currency, will be backed up with fiscal discipline and the government would allow it to fluctuate but would manage excessive volatility.



On the interbank forex market on Monday, one U.S. dollar fetched 2.5 RTGS dollars, the same rate as on Feb. 22 when the central bank sold some dollars to banks. That compares to a rate of 3.5 RTGS dollars per U.S. dollar on the black market. -Reuters



-MacDonald Dzirutwe

UP1EF1H0SAU16

Zimbabwe Central Bank Borrows $985 Million From African Banks

The growth of the global economy is expected to slow to 2.9 percent in 2019 compared with 3 percent in 2018, the World Bank said on Tuesday, citing elevated trade tensions and international trade moderation.



&#8220;At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead,&#8221; World Bank Chief Executive Officer Kristalina Georgieva said in the semi-annual Global Economic Prospects report&nbsp;<a href="http://www.worldbank.org/en/news/press-release/2019/01/08/darkening-prospects-global-economy-to-slow-to-29-percent-in-2019-as-trade-investment-weaken">here</a>.



The World Bank outlook comes as the United States and China have been engaged in a bitter trade dispute, which has jolted financial markets across the world for months. The two economies have imposed tit-for-tat duties on each other’s goods, although there were signs of progress on Tuesday as the two countries prepared to enter a third day of talks in Beijing.



Growth in the United States is likely to slow to 2.5 percent this year from 2.9 percent in 2018, while China is expected to grow at 6.2 percent in the year compared with 6.5 percent in 2018, according to the World Bank.



Emerging market economies are expected to grow at 4.2 percent this year, with advanced economies expected to grow at 2 percent, the World Bank said in the report. -Reuters



<ul><li>Kanishka Singh </li></ul>

RC17B6B2F8D0

World Bank Sees Global Growth Slowing In 2019

The world economy is set to enjoy a very good year. In that, it will be much like 2018 and 2017 and most probably like 2020 and 2021. Economic growth will be fairly strong in most of the countries where such expansion does the most good. While rich countries worry about objectively tiny setbacks, poor people are overall gaining more of the dignity that comes with adequate material comfort. 



Consider extreme poverty. The World Bank draws the line between the wretched of the earth and everyone else at daily consumption of goods and services worth $1.90. The Our World in Data website at Oxford University estimates that 72 percent of the world’s population lived below that line in 1950. The World Bank’s preliminary estimate for 2018 is 8.6 percent, down from 10 percent in 2015.



Fewer very poor people means more are enjoying better lives. The proportion of the global population without access to electricity is declining by about 0.3 percentage points a year. The number of children not enrolled in school is shrinking by about 5 million annually. Almost every indicator of basic prosperity shows the same trend.



The good news is pretty much global. Even Africa, long the lagging continent, is starting to catch up. The proportion of African children that die before they turn five has declined from 21 percent in 1975 to 8 percent in 2015, the most recent year for which data is available. Better health comes from &#8211; and with &#8211; greater wealth. Real per person income in sub-Saharan Africa has increased by 40 percent in the last decade.



Not all the news is good. Due to war and civil conflict, primarily in Africa, the proportion of the world’s population that is undernourished has risen by 0.2 percentage points in the last two years. Still, at 11.9 percent, it is 2.2 percentage points lower than a decade ago.



The prediction of more global gains in 2019 is pretty solid. There are also good reasons to believe that 2029 will be fine. Economic growth in very poor countries is becoming a virtuous circle. More education and better health creates better workers, who support stronger institutions, which make larger and more effective investments, which produce the money needed to pay for even better schooling and health.



That pattern has held in country after country for at least two decades. Bad governments do slow progress, but it takes war or total state failure, as in Venezuela, to reverse the progress.



The almost unstoppable global retreat of misery and ignorance is arguably the best news ever in economic history. For political history, however, the trends are far less clear. The old belief that greater wealth would naturally bring more open societies looks flawed. The populace of many countries, both richer and poorer, seem pretty happy with autocratic and extreme nationalist governments.



China is the prime example. The oppressive and fairly corrupt Communist Party has presided over rapid and widespread increases in prosperity. Its cross-border ambitions, both civil and military, have expanded as well.



That is worrying for many reasons. One of them is that war is probably the only force destructive enough to stop the upward march of global economic good news. The great question, for both 2019 and 2029, is whether progress will threaten prosperity by leading to the use of the world’s ever-larger supply of ever more deadly arms. -Reuters



-Edward Hadas

gettyimages-645015088-170667a

World Will Improve Where It Matters Most In 2019

The tiny East African nation has proven to be a role model for the continent.
During her November 2018 visit to Rwanda, World Bank CEO Kristalina Georgieva described the country as one that has enjoyed impressive growth and often has bold ambitions.
In recent years, at business summits across the world, it’s not uncommon to hear such praise about Rwanda. Various speakers have singled it out as one of the emerging economies to look out for in terms of investment opportunities, value for money and economic growth.
The statistics explain why Rwanda has become Africa’s poster child for progress. The country has reduced reliance on donations and currently, domestically funds about 84% of the budget up from about 36% two decades ago.
In the last fiscal year (2017-2018), the economy grew by 8.9%.
Barely 24 years after the horrific genocide against the Tutsi, when the East African nation lost over a million lives and the devastation left a trail of trauma and economic ruin, its achievements have often been described as miraculous.
<blockquote>At the center of the tiny country’s recovery is President Paul Kagame, who led the revolt that ended the genocide.</blockquote>
Kagame has led his country from penury to prosperity. His government has co-invested alongside private capital to reduce risk and create a more appealing proposition.
For instance, when one of Africa’s leading telecoms groups, MTN, was keen on entering the Rwandan market in 1998, the government boosted their confidence by purchasing a 20% stake in the company.
This was driven by an ambition to not only attract the firm to the country but to ensure citizens have access to affordable telecom services. Years later, the government offloaded its stake in the firm through an initial public offering, allowing citizens to be part of a meaningful income-generating firm.
MTN is just one example of the strategic approaches taken by the Kagame-led government. The same has been replicated in multiple sectors, including finance and agriculture.
The last two decades on the Rwandan economic front have also been characterized by improving the investment ecosystem to create interest from the international and local business community.
While most would concentrate on the odds against the country, such as its small size, and its landlocked location, amidst a volatile region, Kagame sought to give investors every reason to put their money in Rwanda.
In a continent that has always been associated with corruption, the Rwandan government adopted a zero-tolerance stance on graft.
This was paired with the improvement of service delivery across all sectors, eliminating the need for bribes to access public services.
<a href="https://www.forbesafrica.com/interview/2018/10/19/paul-kagame-together-is-when-we-are-going-to-succeed/" target="_blank" rel="noopener">READ MORE | Paul Kagame: ‘Together Is When We Are Going To Succeed’</a>
The most recent Corruption Perceptions Index by Transparency International placed Rwanda as third least corrupt country in Africa.
The reforms have for the last two decades addressed challenges that have often kept investors up at night. Steps that are cumbersome in countries across the world, such as business registration, were eased to a six-hour activity, while tax declaration and registration were simplified to online processes.
The World Bank ranked Rwanda 29th globally in its 2018 Ease Of Doing Business Report and put it second in Africa. The index tracks business efficiency across the world.
Many African economies are known for distinct exports or income streams that have remained unchanged for years. Rwanda chose a different path by embarking on a concerted effort to diversify exports and revenue streams.
This approach has seen services become the leading driver of gross domestic product growth  in the last three years, taking over from agriculture.
Diversification has been achieved, in part, through an increased focus on tourism, driven by initiatives such as the Meetings Incentives Conferences and Exhibitions (MICE) strategy which in less than five years placed Rwanda among the top conference destinations in Africa.
In May 2018, the International Congress and Convention Association (ICCA) ranked the capital Kigali as the third most popular conference and event destination on the continent, after Cape Town in South Africa, and Casablanca of Morocco.
The ranking considered as the country’s capacity to accommodate international meetings and events, together with landmark infrastructure such as a modern airport and a state-of-the-art conference center.
The country has projected doubling revenues from conference tourism.
<a href="https://www.forbesafrica.com/focus/2018/08/15/a-country-on-a-roll/" target="_blank" rel="noopener">READ MORE | A Country On A Roll</a>
According to Clare Akamanzi, the Chief Executive of the Rwanda Development Board (RDB), the country collected a total of $42 million from 192 conferences in 2017 and was projecting $74 million in 2018.
The diversification strategy has opened up investment opportunities for local and international investors (Marriott, Radisson Blu, Park Inn, Serena among others) and created thousands of jobs in the hospitality industry.
The Rwandan media was in November abuzz with news that all hotels in the country’s capital were fully booked for conferences during the month. Conference organizers and tour operators were also said to be stretched to capacity.
Statistics from the RDB indicate there were about 10,488 hotel rooms in the country in 2017, while aviation traffic is expected to grow to about 1,151,300 in 2018, from 926,571 in 2017.
The trend is expected to persist going forward. Rwanda will by the end of 2020 have a new modern airport located in the Bugesera District, a 25-minute drive from the capital.
While pursuing externally-driven growth, Kagame has not forgotten about the home front. This led his government to adopt a ‘Made in Rwanda’ strategy in 2016, which has reduced the trade deficit by about 36% and increased the value of total exports by about 69% from about $558 million to $943 million. Local producers have fast become empowered to produce for the local and export market.
The Rwandan leader has turned his attention to regional integration in the six-member East African Community to counter complaints about Africa’s small, fragmented markets.
The consolidated market of over 200 million citizens is more reassuring to investors and makes a business case for joint infrastructure projects such as the Standard Gauge Railway, which will connect the major Kenyan centers of Mombasa and Nairobi.
Lisa Kaestner, a practice manager for finance competitiveness and innovation at the International Finance Corporation, says: “I see Rwanda is keen on this and trying to support through the East African Community. This is one way to reduce the cost of doing business. If you look at it through the doing business lenses, all countries are trying to improve.”
Kagame’s continental mission has been evident in his various roles at the African Union (AU).
<blockquote>As the chairperson of the AU Reforms team, Kagame has advocated for less donor dependency and more sustainable funding by African states.</blockquote>
He has often challenged African countries who contribute less than 30% of the AU’s budget and turn to external donors with a begging bowl, which has been blamed for influencing the body’s decisions and priorities.
As  AU chair, Kagame has sought an adjustment of terms between Africa and the rest of the world for mutual benefit. This, he has argued, is more sustainable in the long run and presents an avenue for growth among all parties, as opposed to aid, which maintains dependence.
Months after assuming the chairmanship of the AU, in March 2018, Kagame hosted over 50 African heads of state and government in Kigali for the signing of the African Continental Free Trade Area.
As a trade bloc, the trade agreement envisions a continental market of 1.2 billion people, with a combined gross domestic product of more than $3.4 trillion.
So far, 49 countries have signed the agreement, with nine ratifications. The development is a huge step towards encouraging industrialization and job creation across Africa.
Peter Mathuki, Executive Director of the East African Business Council, says: “The country’s leadership is on grip to lift the EAC country to middle income level faster than most African countries. The fast economic growth is premised on pillars of good governance, easy-to-do business climate and zero tolerance to corruption… Rwanda is indeed Africa’s rising star and driver for economic transformation.”
&#8211; Collins Mwai

Kigali city view from Nyarugenge

Rwanda The Emerging Economy To Watch

At least the new president Nana Akufo-Addo is optimistic. In a press statement he called for reflection on what makes Ghanaians who they are. This year’s theme, according to him, is:  “Mobilizing for Ghana’s Future.” That is, a year for Ghanaians to understand their country’s shortcomings and look at ways to improve.
Good timing, when growth is falling. According to figures from the World Bank, Ghana’s economy grew by 4.9% during the first quarter of 2016. However, overall gross domestic product (GDP) growth for the whole of 2016 could be below the 3.9% achieved in 2015, due to production problems in oil.
Inflation is at 16.7%, made worse by the country’s erratic energy supply that sees businesses put prices up when they use generators.
Victor Ohene Oppong, Founder of Invest Hub, a financial advisory firm in Accra, is, like many of his countrymen, in no mood for jubilation.
<div id="attachment_4605" style="width: 245px" class="wp-caption alignleft"><img aria-describedby="caption-attachment-4605" decoding="async" loading="lazy" class="size-medium wp-image-4605" src="/wp-content/uploads/2017/04/GettyImages-146126958-235x300.jpg" alt="" width="235" height="300" />Dr. Kwame Nkrumah of newly independent Ghana, Ghana, mid to late 1950s. The British crown colony of the Gold Coast, became its own country of Ghana on March 6, 1957, with Dr. Nkrumah as its first President. (Photo by Underwood Archives/Getty Images)</div>
“Sixty years ago our founding father, Dr. Kwame Nkrumah famously opined, Ghana your beloved country is free forever, and we all thought managing our own resources would lead to prosperity for everyone but that has simply not been the case. We have issued our fifth Eurobond debt for $750 million and the oil crisis has led to a sharp contraction in oil exports. Businesses are fighting for survival because when there is no cash flow you die. So what is there to celebrate?” he says.
Economic hard times have hit Oppong in the pocket. Last year, he had to lay off five expatriates and close down one of his two branches because of low revenues.
“The debt to GDP ratio stands at about 70% and the last unemployment figures show at least 42% of people are still struggling to find jobs. I think the president is right when he calls this a time of reflection, we need to think very hard and carefully about the future of this country,” says Oppong.
Richmond Nartey, Managing Director of RN Shipping in Tema, agrees.
“Sixty years is a lifetime. For most people that is the age when they begin to think about retirement and enjoying life. But that is not the case for Ghana. The value of our currency is still very weak against the dollar and even though we decided to use our own local currency, many companies still charge in dollars. Foreign currency restrictions in Ghana are still a big issue for our kind of business. What happens to businesses that cannot get their hands on the much-needed dollars to be able to run their business?” says Nartey.
Following the end of decades of rule by former coup leader Flight Lieutenant Jerry Rawlings, Ghana has done its best to clean up its democratic act. Ghana’s two-party electoral system is earning the confidence of the world for its peaceful political transitions. For this reason alone, Mary Osei, Account Manager at HFC Bank, believes there is cause to celebrate.
“This is a time to remember all the things that make this country a wonderful place to live. Yes, there are several challenges we are facing, but which economy isn’t facing challenges? We have to continue to work together to build on the achievements we have and make this nation great,” says Osei.
“If there was ever a day to be proud of your Ghanaian heritage and to be patriotic, there is no better day than March 6, so I do not agree with the naysayers and people who believe there is no need for celebrations,” she says.
Yet the debate over how to celebrate Ghana’s 60th birthday has been fierce. Akufo-Addo set up a 30-member committee to plan the celebrations with a budget of GHc20 million ($4.57 million), which has proved controversial on the streets.
“If there is anywhere that money needs to be spent, it should be in the creative industry instead of throwing it away on branding buses with faces of old presidents or parties. There are failing sectors in the economy where that money could be put to much better use,” says Adamz, a hip-hop artist in Ghana.
The influence of Ghana’s independence over Africa cannot be underestimated. It was the first black African nation to cast off colonialism and inspired many others to follow suit.
&#8220;At long last, the battle has ended!  And thus, Ghana, your beloved country is free forever!&#8221; said Ghana’s first leader Kwame Nkrumah on independence night in 1957. The new leader wore his prison cap – a symbol of his incarceration by the British during his independence struggle – with the letters PG, for prison graduate, embroidered on the front.
Martin Luther King Jr. was with half a million Ghanaians at the ceremony and saw a parallel with Ghana’s freedom and his struggle for civil rights in the United States.
“Before I knew it, I started weeping. I was crying for joy. And I knew about all of the struggles, and all of the pain, and all of the agony that these people had gone through for this moment,” recalled King in an interview years later.
Nkrumah, the father of the Organisation of African Unity (OAU), which evolved into the African Union, drew many admirers in his first bold steps as a pan-Africanist leader. They included a young teacher by the name of Robert Mugabe who had been seconded to Ghana, by the then Rhodesian government, to a training college.
Mugabe was very taken by the sight of confident Africans in an independent nation and returned home determined to fight for an independent Zimbabwe.
Independence turned out to be bittersweet for Ghana – it was followed by assassination attempts and coups. The idealistic Nkrumah disappointed many when he declared himself president-for-life in 1964.
At least, in the 21st century, democracy in Ghana is closer than it probably ever has been to the shining ideals of 1957.

Ghana At 60

In 1966, if you drove through Gaborone and blinked you would have missed it. It was little more than a barren railway stop, in the middle of nowhere, on the way from Cape Town to Cairo. Those living here would have said there was nothing more to it than termite mounds and elephants.
At the time, this land-locked country was considered to be the poorest in Africa, with a per capita of $70. It had nine secondary schools, 50 university graduates, a railway line built by Cecil John Rhodes, and five kilometers of tarred road that stretched between Lobatse Station and the High Court.
From this backwater beginning Botswana has emerged as one of the fastest growing economies in the world and moved into the ranks of upper-middle income countries. Real GDP shows an average growth of 5% per annum over the past decade, at a time when the most advanced economies have been falling apart. In 2015, GDP stood at $14.39 billion. This remarkable growth, according to the World Bank, is because of diamonds hidden deep in Orapa, 521 kilometers north of Gaborone. The discovery was made in 1967, months after Botswana’s independence was declared on September 30, 1966, and the proceeds went to the state rather than colonial coffers.
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But, if you look closely at the white walls and fresh cement of Gaborone, cracks appear. In the week FORBES AFRICA arrived in Gaborone, unemployed youth clashed with police outside Parliament; four of them spent the night in jail.
It is called #UnemploymentMovement and uses social media to fuel support, much like South Africa’s #FeesMustFall student protests a year ago. It comes at a time when citizens question the government’s P100 million ($9.76 million) budget for its golden jubilee.
It is a big problem. One third of Botswana’s two million people are youth. The World Bank says poverty in Botswana is 17.8%, among youth aged between 15 and 24 its 34.10%. This is despite government spending 9% of its $14.39 billion GDP on free education.
One of those that spent the night in jail is Jones Banda, a committee leader behind #UnemploymentMovement. Speaking to FORBES AFRICA while on a march on August 13, he says the movement started with just one student, Tlamelo Tsurupe, standing outside Parliament with a poster. Within a week dozens more, including Banda, joined him.
“The youth of Botswana have realized our government can no longer place jobs for the youth&#8230; Most of our emphasis now is on the graduates. Why? Because it is [graduates] that are very frustrated. They have been educated by the government to take control of the economy and now the government is not absorbing them. Mind you, the students have loans to pay,” says Banda.
At the time of going to print, the BDP had not released an official statement concerning police assault at the protest on August 8. A permit was granted for the march held on August 13.
Banda believes unemployed youth make up more than 17.8%. This is because unemployed graduates have to register with the government, meaning that thousands of other students who are not graduates are not considered.
Banda’s stint behind bars hardened his resolve.
“Being in jail is almost as if I was home, not that I have ever been in jail. But for the movement it was a good thing. We felt the brunt of system and so we know now who is on our side. It was what we expected,” says Banda.
While students called for better employment, there are others who have managed to eke out a living.
A 32-year-old electrical engineering graduate, Kagiso Monkgatusi, makes his living from flying a P45,000 ($4,400) drone, one of the few owned and licensed in the country.
Monkgatusi, a photographer by trade, got the idea for his business after seeing footage on the internet. It led to him starting his small business, Africa Killer Bee Media, named because of the sound the drone makes in flight. The drone was given to him as a grant by the government-run Local Enterprise Authority. Monkgatusi’s success is an indication of Botswana’s potential.
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In Gaborone, there are small signs of burgeoning wealth; tarred roads glisten, as bright as the country’s diamonds, next to dusty sidewalks; malls, polished and pristine, are packed to the rafters with food, shoes and cell phone stores. The city center is a hive of activity as scaffolding rises on the skyline.
Botswana’s success is largely due to a stable government with strong fiscal management, reports the World Bank. President Ian Khama, whose photo hangs on the wall of every store you visit, has held office since 2008. He is the head of the Botswana Democratic Party (BDP) that has been in power since the first elections in 1965. Every president has been democratically elected and all stood down after their two-term limit.
At the very least, Botswana is trying hard to improve investment and growth in their small economy.
For the hungry investor, Special Economic Zones (SEZ) have been built in Lobatse, Gaborone, Palapye, Selibe Phikwe, Tuli Block, Francistown and Pandamatenga.
“In April, P1.6 billion, of P3.5 billion over three years, in tenders have been awarded and the focus is mainly on the construction of roads, health and education facilities. Other sectors that have been allocated package proceeds are manufacturing, tourism and agriculture,” says Moatlhodi Sebabole, Research Manager at First National Bank Botswana.
Sebabole says Botswana also has a five-year national development plan (NDP) which will focus on coal mining, base metals and diamonds. However, according to Sebabole, investors need to keep a careful eye on low agriculture and food security, stability of water and electricity, and low investment growth.
“The production side of the economy still remains under turbulence with the closure of some abattoirs as well as base metal mines like African Copper,” says Sebabole.
Regardless, Sebabole believes Botswana’s outlook over the next 10 years is promising. Focus will remain on infrastructure projects in water, rail and electricity, which will need financing of P100 billion (around $10 billion) by 2019.
Botswana is a far cry from the country that started with $70 per person a year and five kilometers of tarred road. Fifty years on, it faces new challenges that show how far the country has come – some might even go as far as calling it first world problems, including an educated and militant youth.

Young,  Jobless And ANGRY

After years of sliding down the World Bank’s Ease of Doing Business index, Kenya finally managed to turn things around and pull itself up to a ranking of 108 out of 189 economies. It is a rise of 28 positions from the previous year. Through wide ranging reforms, the country halted a downward trend since 2011, when it slipped to the position of 109 from 98 a year earlier, 121 in 2012 and 137 in 2013.
The latest ranking is ahead of the average sub-Saharan African ranking of 143. Much of the change is down to the government’s attitude towards economic reforms. The increased focus in the crucial areas of the access to credit; electricity; and business and property registration has yielded positive results.
For instance, the passing of legislation that allowed the sharing of both positive and negative credit information has seen the introduction of three Credit Reference Bureaus (CRBs) in the past four years. Consequently, CRB coverage of adults in the country climbed to 14%, up from 5% in 2014, a development which will simplify aid lending decisions in the country. Furthermore, sound collateral laws helped push the country to 28th position, up from 118 the previous year, and are expected to improve the ratio of private sector credit to GDP in the coming years. The average in sub-Saharan Africa on this indicator stands at 118.
On the issue of electricity supply, the reduction of procedures has cut the time it takes to connect to the grid from 158 days to 100 days. This has led to the total number of users connected to electricity, from March 2013 to date, spiking by 41%. It has also resulted in a 37% jump in the national electrification rate. In all, the initiative helped push the country to position 127, up from 141 in the previous year. Of course, much more needs to be done especially around the areas of reliability and affordability. With this in mind, the recent deal agreed with China to build the country’s first nuclear power station by 2025, with a capacity of 1,000MW, is a step in the right direction. Moreover, plans to expand installed capacity to about 6,700MW by 2017, from the current 2,500MW, should see the country climbing future rankings.
Minor improvements were seen areas such as: resolving insolvency (ranked 144, up from 145), dealing with construction permits (ranked 140, up from 152) and the registration of property (ranked 115, up from 121). The latter, through the automation of land records, has contributed to the rise is the registration of property. Areas that saw a drop in performance include: starting a business (ranked 151, down from 148), paying of taxes (101, down from 99) and the protection of minority investors (ranked 115, down from 114). Areas where performance remained flat are: trading across borders (ranked at 131) and the enforcement of contracts (ranked at 102).
In all, Kenya is on the right path and it’s resulting in reform-driven legislation. Despite the many challenges the country faces, the ongoing reforms herald good tidings for Kenya’s ease of doing business. The Business Registration Services Act, legislation that was recently enacted and not included in the report, should improve the country’s standing even further. The law, by changing the process of business registration, aims to streamline the incorporation of companies, partnerships and firms.
For policy makers, knowing where the economy stands with regards to the ease of doing business is useful. However, it might be more useful knowing the distance to frontier (DTF) scores which are indicated in the same report. DTF scores benchmark economies with respect to regulatory practice, showing the absolute distance to the best performance in each indicator. Kenya’s DTF score stands at 58.24, behind Namibia (60.17), Botswana (64.98) Rwanda (68.12) and Mauritius (75.05).
Be that as it may, Kenya has come a long way and deserves credit. Given the progress so far, aspirations to rise to 50th on the index by 2020 are valid.

ON THe RIGHT PATH

Arunma Oteh’s ascent from Nigeria’s ‘Iron Lady’ to Africa’s pride was not an easy one. Yet, Oteh, who joined the World Bank as its Vice President and Treasurer in September 2015, has proven that even if the proverbial glass ceiling exists for women, it can be broken – and how.
As Nigeria’s Director-General of the Securities &amp; Exchange Commission (SEC), Oteh, known for her competence and tough decision-making skills, had boldly driven the transformation of the country’s capital markets and helped grow investor appetite.
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At the World Bank, Oteh leads a large and diverse team responsible for managing more than $150 billion in assets. Her top priorities are to maintain the World Bank’s global reputation as a prudent and innovative borrower, investor and risk manager; manage an extensive client advisory, transaction and asset management business for the bank; engage, in her capacity as one of the World Bank’s key representatives, with outside stakeholders including global private sector financial institutions, the financial media and the sovereign debt and reserve managers in client countries, as well as ratings agencies; and collaborate extensively with the finance partners throughout the World Bank Group, expanding shared approaches, in particular around innovative financing for development and for key new projects.
In a statement, World Bank President Jim Yong Kim, had said on her appointment: “Arunma has deep knowledge of capital markets and tremendous experience as the former Treasurer of one of our partner development banks, we are very fortunate to be able to recruit an individual of Arunma’s obvious caliber.”
Oteh is a phenomenal powerhouse but in person, is warm and unassuming. I met her on a balmy Friday evening in Johannesburg in mid-2015.
Her five-year term at the SEC had ended in January, the same month she turned 50.
“Fifty is the new 16,” she laughed.
“I couldn’t have imagined how enjoyable it will be. It’s like I am walking on air.”
Oteh said her singular objective would be to continue to serve her country, and Africa.
“I come from a family [where] my parents have spent their lives serving, so I am usually attracted to opportunities that help me serve,” she said.
Oteh speaks with passion about Africa, about security, capital markets, infrastructure, e-commerce and governance. She also speaks keenly about topics such as women’s empowerment and youth.
“I want young people to realize their potential. I want to see Nigeria become truly one of the most industrious countries in the world. I want to see Africa be the place where no one writes those articles about wars, disease and famine, and [where] people are writing about being inspired by all the entrepreneurial opportunities here.”
Her first experience of capital markets was sitting around the dinner table with her father, who would make her read annual reports to him.
“I hated it, but God was planting a seed in me for what I have done today.”
Clearly, her parents were her greatest influences.
“I believe early foundations are critical to who you become. I also want more parents to spend more time bringing up their children. My emphasis on character and standing alone came from my parents.”
Other influences have been Nelson Mandela, Bill Gates, Madam Walker, Oprah Winfrey, Beyoncé and Bono. For Africa’s women, she too is now up there on that list.

W0A3975

The Iron Lady  In Charge Of  $150 Billion

I wrote an article for a business news website several months ago about South Africa’s need to develop industrialists. The need is simply unavoidable: we incessantly hear about the country’s high unemployment rate in the media. Much is stated yet little is done.
A reader commented on the article, making a rather brash statement, which he is entitled to. He was of the opinion that I was naive for stating that we need to produce A-grade industrialists, instead highlighting the fact that our government should rather focus on mitigating the capital outflows South Africa has experienced in recent times. Perhaps our stringent labor laws are to blame or maybe our sluggish economy has precipitated these outflows. I agree in part; ultimately my point, and the real issue, is that not enough great ideas are being cultivated. There are various reasons such as entrepreneurs continuing to find it difficult to access funding, and our high skills deficiency relative to other industrialized economies.
The tenuous relationship between the private and public sectors cannot be over-emphasized. This issue is constantly debated in the media, illustrated by differing ideologies that the public and private sectors have pertaining to the economy: what should be done and how it should be done. Unfortunately for the greater masses, and more importantly the economic welfare of our country, their issues remain unresolved. The situation with our capitulating mining industry is a perfect illustration of the tipping point that has been reached as far as relations between the state and business are concerned. It comes as no surprise that the sector has cut thousands of jobs and this trend is likely to continue in other sectors.
According to recent data from the Department of Trade and Industry, South Africa’s gross domestic fixed investment to GDP hovers around 20%, well below the fastest growing nations. We can no longer justify our lack of saving as a nation on the fact that we have a growing fiscal budget, placing greater pressure on our budget deficit. There are several countries that face similar challenges, and are considered developing countries by the World Bank, that have significantly higher national savings as a proportion of the national income. The Asian Tigers – Hong Kong, Singapore, Taiwan and South Korea – owe some of the successes of their economic revolutions to substantially higher national savings, which enabled them in part to finance the industrialization of their economies through private investment rather than relying on foreign investment.
This brings me to my next point: South Africa needs to create world-class industrialists now and at a rapid pace. The ‘industrialist’ term has been misused by being prefixed by ‘black’ in recent government economic policy documents. The term has been used to describe what appears to be Black Economic Empowerment benefactors who will be moulded into billionaires. The ruling African National Progress (ANC) party has stated several times its need to create black billionaires. Few would disagree that the emergence of wealthy blacks, including all previously disadvantaged race groups, is necessary in the transformation struggle. The issue is not as much whether the emergence of black billionaires is wrong, but rather the manner in which the government plans to go about it.
The prioritization of creating employment opportunities remains pivotal in curbing the dependency of South Africans on state welfare and ultimately building a society in which the economic benefits of the country benefit everyone. For now, the prospect of higher employment amid the slowing economic growth is inconceivable. Great ideas need to be cultivated. Ultimately it was great ideas that birthed many of the largest corporations the world has ever seen and immortalized industrialists such as Andrew Carnegie and Cornelius Vanderbilt that transformed the concept of entrepreneurship.
The alternative of creating an elitist ‘black’ faction of billionaires through state procurement processes, better known as tenderpreneurship, will not only breed discontentment among the poor black majority, but will be a clear sign that the ANC has never, at its core, been a truly leftist party but is mutating  into a right-wing movement.

More Entrepreneurs, Less Tenderpreneurs

Kenya’s economy is set to grow at a faster pace than previous years. The World Bank’s Kenya Economic Update (KEU) estimates that Kenya’s economy is poised to grow by 6% this year, 6.6% in 2016 and 7% in 2017, making it one of the fastest growing economies in sub-Saharan Africa. Similarly, in a review of Kenya’s economic performance, the International Monetary Finance (IMF) forecasts real GDP growth of around 6.5% this year, supported by rising infrastructure investments, lower energy prices and a dynamic private investment environment.
The country’s past growth has also had a strong showing, especially after rebasing its economy. Average annual growth for 2007 to 2013 was 5% in the new GDP series, up from 4.3% in the old series. This single event also increased its economic size by 25% to an estimated $55.2 billion making it the ninth largest in Africa (up from 12th, surpassing Ghana, Tunisia and Ethiopia) and fifth largest in sub-Saharan Africa (after Nigeria, South Africa, Angola and Sudan).
Relative growth comparisons also show an above average performance. Average growth between 2010 and 2013 stands at 6.2% compared to a 5.3% average for sub-Saharan Africa. The IMF’s latest Regional Economic Outlook: Sub-Saharan Africa projects regional growth at 4.5% this year, which is two percentage points lower than its Kenyan forecast. The World Banks’s Country Director for Kenya, Diarietou Gaye, cited the country’s expansive fiscal and monetary policies as having played a huge role in making Kenya the growth center of East Africa.
To add to the momentum, the recent renewal of the African Growth and Opportunity Act (AGOA) by United States President Barack Obama for a further 10 years further supports the growth story. Kenya, which is already a leading exporter of garments to the United States, expects to earn about $10 billion before the 10 years are over. With the new deal, Kenya also expects to offset sluggish demand from its traditional European export markets which have struggled in recent years. Through AGOA, Kenya can also hope to generate the much needed foreign exchange revenues to help narrow its widening current account deficit currently standing at about 10% of GDP.
However, risks exist. Security concerns have seriously affected the tourism sector, a key foreign exchange earner. Contraction in the sector is partly blamed for the slowed GDP growth. Data from the Economic Survey 2015 indicates that earnings from tourism were down 7.3% to 918 million. Agriculture, which accounts for around 25% of the economy, is another sector that has had mixed performance. Often vulnerable to bad weather and volatile world commodity prices, the sector frequently suffers from fluctuating production and revenue levels.
The manufacturing sector also had a less than optimal performance. Commenting on the KEU report, the World Bank’s Finance and Private Sector Development Specialist, and a co-author of the report, Maria Paulina Mogollon, cautioned Kenya on the need to increase competitiveness of its manufacturing sector so that the country can grow, export, and create much-needed jobs. In recent years, manufacturing’s contribution to Kenyan exports and growth has lagged.
Despite the challenges, Kenya still has a good chance to become Africa’s great success story. From its growing and youthful population, stable macro-economic environment, a dynamic private sector, a new constitution and its pivotal role in East Africa, Kenya is undoubtedly the new regional growth center.

Onwards and upwards

In the weeks since Muhammadu Buhari was elected president several lists have emerged purporting to show his ministerial nominees; the frenzied list-making an expected outcome of Nigeria’s speculation mills tilting into overdrive during periods of political transition.
That federal cabinet, when finally constituted sometime in June, will, like all others before it, comprise a blend of technocrats and politicians. What is yet unclear is which of these groups will dominate, and if there will be a critical mass of reformers, similar to the group that dominated the second term of President Olusegun Obasanjo and helped him achieve landmark reforms in pensions, electricity legislation and Nigeria’s foreign debt position.
Buhari has said he will work to downplay the involvement of the cabinet in the award of contracts, and instead remake it as a “policymaking” body. He has also said he will not be depending on the governors to constitute his cabinet. If he follows through on this vow, it will be a break from a tradition set by the People’s Democratic Party, which has ruled Nigeria since 1999.
Nigeria’s constitution stipulates that all of the country’s 36 states must be represented in the federal cabinet. This means that there will have to be at least 36 ministers, regardless of whatever cost-cutting ambitions a president might have. During his first spell as president, Buhari’s preference for a relatively smaller government was backed by the near-absolute authority he held as military ruler.
The finance minister role gained unprecedented power under the Goodluck Jonathan presidency, when its occupant, Ngozi Okonjo-Iweala, was concurrently designated the coordinating minister of the economy’ – likened by observers to an unofficial prime minister role. Considering the dire state of Nigeria’s finances, and also of its prospects in the short to medium-term, the choice of finance minister will be one of the most important decisions Buhari has to make.
The three people who represented the incoming government at the spring meetings of the World Bank in Washington DC in April – Ifueko Omoigui-Okauru, a former head of the Federal Inland Revenue Service; Wale Edun, who ran the Finance Ministry in Lagos State between 1999 and 2004, and is also a co-founder of Stanbic-IBTC Bank; and Abba Kyari, a former CEO of UBA – have all been tipped to get the job. All three previous Finance Ministers have come directly to the office from the executive ranks of multinational banks – Mansur Muhtar from the African Development Bank, Olusegun Aganga from Goldman Sachs, and Ngozi Okonjo-Iweala from the World Bank.
The Petroleum Ministry will also be keenly watched, as it is oversees the lifeblood of the government and the economy. Buhari has previously served as Chairman of the Nigerian National Petroleum Corporation (NNPC), the national oil company, and Minister of Petroleum, and may be tempted, like President Obasanjo did for all of his eight years in office, to retain direct control of the all-important sector.
Anyone looking for possible insight into the nature of the Buhari cabinet might have to look at the Transition Committee he assembled in April, to liaise with the outgoing government and help lay a policy foundation for the new one. The membership of the committee drew from various blocs: the old guard (like Tam David-West, Buhari’s Petroleum Minister 30 years ago; and Committee Chairman Ahmed Joda, already a powerful federal bureaucrat in the 1970s when Buhari was taking on his first government role), and a crop of younger technocrats like Doyin Salami, a professor at the Lagos Business School, Wale Edun, and Bola Adesola, CEO of the Nigeria office of Standard Chartered Bank.
Some ministries have traditionally been regarded as A-list because of the relatively larger capital spending budgets they wield, and will therefore see a lot of intense lobbying from interested people and interest groups. They include health, federal capital territory, education, defence, works and water resources. Sources say Buhari’s plans to focus on diversifying Nigeria’s natural resource base beyond oil and gas will elevate the Ministry of Solid Minerals into this elite club.
Beyond the cabinet there will be hundreds, perhaps thousands, of appointments to be made over the next four years. Primary ones will include the cabinet secretary (secretary to the government of the federation), chief of staff, principal private secretary, a spokesman (‘special adviser on media’), a chief economic adviser, and, possibly – in keeping with recent presidential tradition – a quietly influential special assistant on domestic matters.

Who Will Run Nigeria?

There is a Swahili saying that goes; ‘a good day is known in the morning’. Is 2015 a good year for the Kenyan investment environment? All indications suggest it is.
The World Bank has reviewed its prediction about Kenya, predicting GDP growth at 6%. While I am happy that the New York-based economists think so highly of the country, I highly doubt if this will be the case.
The World Bank has missed its growth predictions for Kenya for three consecutive years, being forced to adjust mid-year from 2012. Beyond that, the country’s economy is still not out of the woods and growth will remain slow.
For this year, I would trust their adjusted statement given in June 2014, stating that the economy would grow at around 4.7% both in 2014 and 2015. I would place the figure at between 4.9% and 5.2%, two to four percentage points above Mckinsey’s growth figures for Africa.
To make accurate predictions, you need to look at the past.
The Nairobi Securities Exchange (NSE) performed averagely in 2014. The NSE 20 Share Index delivered price gains of 4.9% compared to 19.2% the previous year. On the flipside, the NSE All Share Index (NSEASI) delivered a price gain value of 19.9% compared to 44.1% in the previous year.
It’s worth noting that the NSEASI is driven by speculative trading on the smaller counters, mostly in the agricultural sector. The large caps in the NSE 20 are mostly attractive to large investors who prefer long term to short term benefits, hence minimal price gains.
While the price gains were average, most of the companies registered the anticipated major profits. Safaricom reported a net profit of $256 million, a 31% increase, while Equity Bank reported a profit of $211 million for the year ended December 31, 2013. Better news arrived when the bank announced its third quarter results in October to stand at 124 million, a 26% rise from the previous year.
It was not all rosy though. Kenya Airways reported a loss of $87.9 million, which coincided with the rising insecurity in the country, the Ebola pandemic in West Africa and poor tourism numbers driven by travel advisories in the west. The other companies that reported losses were Mumias Sugar, suffering the after effects of dishonest management, and Transcentury which posted a half year loss of $17.8 million.
The country’s economy grew 2.7% in the first quarter, 5.8% in the second and 5.5% in the third. While better performance is expected for the fourth, I believe Kenya’s growth figure for 2014 is still within the region of 4.7%.
With this information, one can authoritatively talk of a better performance in 2015.
I expect continued activity from the traditional movers like Safaricom, Equity Bank, KCB, EABL and Kenol Kobil. I also expect Mumias Sugar to make a comeback after shedding off 33% last year. There will also be significant activity from the growth counters; Centum Investment, Britam, and Car and General.
In essence, the sectors to watch will be agriculture, insurance, banking and oil which will benefit from the lower crude prices. We may even see a breach of the 6,000 mark for the NSE 20 Share Index, with the risks being poor implementation of the capital gains tax and insecurity.
The decision by the ICC to drop charges against President Uhuru Kenyatta is good news for the country, but terror attacks are derailing progress in Kenya, having eroded the robust tourist industry last year. While there is confidence in the government efforts to curtail the attacks, the risk still lingers in 2015 and might affect business significantly.
I expect government economists to take a conservative approach in setting both the fiscal and monetary policy. The Vision 2030 flagship projects will offer liquidity to the economy and spur growth, thus there will be no need to induce additional government spending in the next budget. In addition, the spending will send interest rates downward and the Monetary Policy Committee is likely to lower the Central Bank Rate when the economy has responded positively to the aggressive fiscal spending.
With this in mind, I can say it’s a good year to invest.

Tag: World Bank

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ON THe RIGHT PATH

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Who Will Run Nigeria?

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