Items filtered by date: Tuesday, 05 December 2017

Manufacturers and retailers seeking to stay one step ahead in Africa’s complex markets need to move beyond ‘business as usual’ - they simply cannot keep doing the same things and expecting a different result.

This is the latest insight stemming from the 5th Nielsen Africa Prospects Indicator (APi) report which includes a comparative ranking of eight African countries, drawn from multiple datasets, collected across the Macro Economic, Business, Consumer and Retail dimensions. 

Nielsen Executive Director Thought Leadership Emerging Markets Ailsa Wingfield comments; “No one size fits all and no total continent, country, city, consumer or channel approach is enough to ensure sustained success in Sub-Saharan Africa. Similarly, successful brands, advertising and activation in other developing markets do not provide the passport to growth in Africa’s complex markets and challenging climates.”

The latest APi report reveals that Sub-Saharan Africa has uplifted itself from the two-decade economic low reached in 2016, bringing a slight easing of pressure but certainly not a return to the robust growth rates previously experienced. However, despite the turmoil and heavy constraints; Wingfield stresses that Africa’s ‘heavyweights’ namely Nigeria, Kenya and South Africa, cannot be ignored and remain a long-term priority for any business focused on Sub-Saharan Africa.

Challenging…but impossible to ignore

Considering this, it’s clear that the sub-continent’s two most significant economies, Nigeria and South Africa, are slowly turning around from recent declines to low levels of growth, however, the consolidated prospects for these two powerhouse economies continue to be subdued. Of the countries measured in Nielsen’s 5th Africa Prospects report, South Africa slips two positions to sixth place and Nigeria remains in eighth place.

South African consumers have expressed declining sentiment regarding their job prospects, personal finances and time to buy. With higher average GDP per capita - double that of Nigerians and Angolans and triple that of Kenyans - bigger in-store spend and an openness to new, innovative products, South Africa presents the strongest consumer prospects in SSA.

However, the reality is that a cautionary consumer mindset has led to more risk averse spending behaviour and a heightened focus on saving, especially in the areas of out of home eating, entertainment and fashion, followed by an acute awareness of price for consumer-packaged goods. To counter this, businesses have been drawn into more promotional activities, eroding brand equity and margins.

Kenya relinquishes top position due to fading macro-economic indicators and a declining business outlook amidst an unsettling election period. Economic growth slowed to 4.7% in the first quarter of 2017 brought about by drought and the credit slowdown. Rapidly rising inflation has driven food prices to five-year highs, which has plagued consumers and retail trading conditions. Consumers are less confident about their personal finances; their spare cash is limited, and their mindset remains cautionary with them opting to save rather than spend. 

 Nelson Ranking

 

A continued missed opportunity

Cote d’Ivoire once again leads the APi overall ranking with strong macro-economic and retail prospects, but the country is dealing with deteriorating political stability and declining cocoa prices, which could lead to an economic deficit and pressure on household income, amplifying the already weaker consumer prospects.

Despite the country displaying strong indicators for growth, consumer prospects remain low. This is in part due to product fulfilment issues, with manufacturers failing to meet Ivorian consumers’ needs as they relate to a range of factors including:  convenience, tradition, taste, ease of use, portability, scarcity and accessibility.

 Nelson Ranking2

 

Cameroon comes into focus

Cameroon has risen to fourth position, is its highest rank to date. With a diversified natural resource base, rapid urbanisation and GDP per capita on par with Kenya, and higher than Uganda and Ethiopia, it is easy to understand its stronger consumer and retail prospects.

These are, however, offset by weaker macro-economic and business prospects. The economy is vulnerable to external impacts due to a reliance on commodities, and this, coupled with low investment in critical infrastructure, frequent power outages, and weak governance, has resulted in elevated costs of doing business. Cameroon has also been identified as one of the most challenging countries in the world to start a new business, limiting potential investors and preventing the economy from growing at its full potential.

Ghanaian Optimism

Ghana maintains fifth position on the APi, but this masks some of the ongoing improvement in the macro-economic, consumer and retail dynamics. It has also been rated as the best business prospect for successive periods. Economic advances in 2017, with growth rising to 6.6%, is spurred on by progress in the oil and non-oil sectors. Food inflation continues to decelerate easing the pressure on consumer wallets, resulting in an increasing number of Ghanaians spending more in store, more willing to try new things and positively influencing the previously weaker retail outlook.

Overall, the APi report shows that Africa continues to offer one of the greatest gifts of untapped growth, but requires bold strategies. Those invested or investing in Africa therefore need to reassess and implement in a more purposeful, precise and persistent manner in pursuit of consumer needs.

Wingfield comments; “Africa offers marketers one of the final destinations to develop and execute product, marketing and retail solutions from a clean slate perspective, which are differentiated, generate demand and deliver value yet there still seems to be a vacuum within these areas.

“On the plus side this points to significant potential for innovation and growth –  what is required now is a steady investment by manufacturers and retailers into making these untapped opportunities work for them.”

With vast retail landscapes and widespread, diverse consumers it’s therefore all about precision over mass tactics in Africa coupled with exceptional product, marketing and retail innovation to capitalise on Africa’s prospects.

Published in Business

The Republic of Somaliland is recognised as an autonomous region in Somalia’s northwestern region. Since it broke away from Somalia in 1991, it has held five successful elections.

Such an electoral record, despite extensions and delays in almost every case, is enviable by regional standards. And as a result, Somaliland has garnered significant donor support. The November 13 polls followed the same script. Although they were twice delayed, only minor irregularities were reported by the international observer mission. These included vote buying and lack of secrecy during voting. Unlike previous elections, however, the 2017 presidential contest marked the highest stakes yet, that revealed deep cracks in the country’s revered consensus politics.

Election day itself proceeded peacefully. 78.85% of the 704,089 registered voters who had collected their cards participated in the election. And for the first time elections were held in parts of Sool and Togdheer. These are the insecure border regions that are disputed between Somaliland and Puntland (now a member state of the Federal Government of Somalia).

Yet, the process was marred by incendiary party rhetoric and violent protests before and after the elections. The protests were largely youth-led, with a number of casualties reported.

Both parties seemed unable to contain their supporters, or instil popular confidence in the process. Voters were deeply divided along clan and party lines. The electoral commission’s four-day social media ban and delay in releasing provisional results (nearly a week after the polls) provided ample room for rumour mongering and confusion. By election night both the main opposition party - Waddani - and the ruling Kulmiye party were celebrating a win. False results circulated on Whatsapp the next day suggesting a win for Kulmiye. Waddani reacted quickly by challenging the impartiality of the process.

Seemingly emboldened by the Kenya example, the opposition party claimed that Kulmiye had circulated fake ballot papers. It threatened to suspend cooperation with the election commission. No formal complaint was filed at the Supreme Court but Waddani had succeeded in bringing opposition supporters to the streets in unprecedented numbers.

The final announcement of results on November 21 confirmed that Kulmiye’s Muse Bihi Abdi had won by a margin of nearly 80,000 votes. Back in 2003, the incumbent Ahmed ‘Silanyo’ Mohamoud had conceded defeat to a much smaller margin of 83 votes. As such, it looked like Waddani’s hands were tied.

Behind-the-scenes, former statesmen and other impartial stakeholders stepped in to calm the storm and convince Waddani to concede defeat quietly. The concession speech came on November 22, a day after the announcement of results. Opposition candidate Abdirahman Cirro called for national unity, but Somaliland’s fragile political fabric had already been put through the wringer.

Election tension

Heightened election tensions were made worse by the political inexperience of the two presidential candidates who both employed deeply polarising rhetoric. This was an unprecedented and risky combination for the country’s conservative political system.

The personal attacks between Kulmiye’s Muse Bihi Abdi and Waddani’s Abdirahman Cirro hinged both campaigns on their personalities, Somaliland’s civil war grievances, and clan divisions.

Muse Bihi harped on his war record, at one time saying

We won’t accept a candidate who has never fired a gun, and is afraid to hold one.

This suggested that the political transition could turn violent. Widespread concerns were vocalised by locals and Somalilanders in the diaspora alike.

Fierce competition was also fuelled by large amounts of money. Both parties pushed ahead with early campaigns despite the threat of hefty fines from the election commission. Payouts to constituencies, including money for drought relief, contributed to what many estimate may be the costliest election since the local council elections in 2012.

Geo-strategic weight

Somaliland’s enhanced regional standing certainly heightened the ambitions of both presidential candidates, and contributed to the high costs of the elections. Its strategic positioning in the Gulf of Aden, where Saudi Arabia is leading an offensive against Yemen, secured Somaliland massive port investment.

The USD$442 million deal signed with UAE company, DP World, in September 2017 came with additional commitments to development in Somaliland, as well as plans for a military base at Somaliland’s Berbera port.

The deal, however, is also highly politicised and dogged by corruption allegations. It closely aligns Somaliland with the UAE in the unfolding Gulf crisis and disrupts other regional alliances with Djibouti and Ethiopia. It also places Somaliland at odds with Somalia which is maintaining a neutral stance in the conflict.

Challenges that lie ahead

Musa Bihi may be the leader best-placed to steer the country away from further fragmentation and political instability. But his ability to do so will depend, in part, on his regional tenacity and commitment to conciliatory politics at home.

During the electoral process, and laudably so, the opposition galvanised momentum around righting Somaliland’s political imbalances. These include widespread corruption and nepotism that is aided by weak institutions and a political environment that stifles criticism.

Tackling these issues head on will require appointing a new cabinet void of corrupt state officials, but also a strong commitment to reforming Somaliland’s outdated political system. This means prepping legislation for holding parliamentary elections in 2019, but also opening up the political space and pursuing genuine power-sharing.

Cementing regional trade links and pursuing talks with Somalia will no doubt keep the new president busy. But these elections have revealed the desperate need to look inward, heal the nation and foster national cohesion.

 

Claire Elder, Doctoral candidate in politics, University of Oxford

This article was originally published on The Conversation. Read the original article.

Published in Opinion & Analysis

Facebook on Monday unveiled a version of its Messenger application for children, aimed at enabling kids under 12 to connect with others under parental supervision.

Messenger Kids is being rolled out for Apple iOS mobile devices in the United States on a test basis as a standalone video chat and messaging app. Product manager Loren Cheng said the social network leader is offering Messenger Kids because “there’s a need for a messaging app that lets kids connect with people they love but also has the level of control parents want.”

Facebook said that the new app, with no ads or in-app purchases, is aimed at 6- to 12-year-olds. It enables parents to control the contact list and does not allow children to connect with anyone their parent does not approve. The social media giant added it designed the app because many children are going online without safeguards.

“Many of us at Facebook are parents ourselves, and it seems we weren’t alone when we realized that our kids were getting online earlier and earlier,” a Facebook statement said.

It cited a study showing that 93 percent of 6- to 12-year-olds in the US have access to tablets or smartphones, and two-thirds have a smartphone or tablet of their own.

“We want to help ensure the experiences our kids have when using technology are positive, safer, and age-appropriate, and we believe teaching kids how to use technology in positive ways will bring better experiences later as they grow,” the company said.

Facebook’s rules require that children be at least 13 to create an account, but many are believed to get around the restrictions. Cheng said Facebook conducted its own research and worked with “over a dozen expert advisors” in building the app. He added that data from children would not be used for ad profiles and that the application would be compliant with the Children’s Online Privacy and Protection Act (COPPA).

“We’ve worked extensively with parents and families to shape Messenger Kids and we’re looking forward to learning and listening as more children and families start to use the iOS preview,” Cheng said.

 

(AFP)

Published in Telecoms

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