South African business confidence dipped in December on lower exports, fewer new vehicle sales and a decline in planned construction, a survey showed on Thursday.
The South African Chamber of Commerce and Industry’s (SACCI) monthly business confidence index (BCI) fell to 95.2 in December from 96.1 in November.
Seven of the survey’s 13 sub-indices had a negative impact in December, the business body said in a statement.
“The task of restoring the business and investor climate remains a major challenge,” SACCI said, describing the current business climate as “hesitant”.
After a strong start to 2018, business confidence wavered for much of the past year as planned land and mining reforms unnerved investors.
President Cyril Ramaphosa, who faces a critical election this year, is trying to revive the economy after a decade of stagnation, but he has been frustrated by fiscal constraints and infighting in the ruling African National Congress.
“The general assessment is that the present-day administration acknowledges the huge challenges ahead and the role a sound economy could play in addressing it,” SACCI said.
The bridge and one-stop-border-post facilities between Zambia and Botswana will enhance regional trade, integration and spur global competitiveness.
Scenes of traders, travelers, fishermen and women crossing the Zambezi river on floating planks, ferries, rickshaw boats, and canoes will soon come to an end. In just 24 months, travelling between the water-rich but land-locked Zambia and Botswana will get easier, smoother and faster, when the new road and rail bridge, currently under construction across the waters of the Zambezi, is commissioned for public use.
The 923-metre-long by 18.5-metre-wide masterpiece will link the town of Kazungula in Zambia with Botswana. Its location traverses the intersection of the Zambezi and Chobe rivers. At this point, four countries - Botswana, Namibia, Zambia and Zimbabwe – meet.
The Kazungula Bridge Project will have a single-line railway track, pavement for pedestrians and international border facilities: two One-Stop Border Posts, located on Botswanan and Zambian territory. When completed, the bridge will be connected to the Mosetse-Kazungula Railway.
The project was one of several projects showcased by officials of the Kazungula Bridge Project Office during the 2018 Programme for Infrastructure Development in Africa (PIDA) Week.
Seeing is believing. Consequently, the conveners of the annual infrastructure summit, the African Union Commission, NEPAD and the African Development Bank, scheduled a trip to the site of the project as part of the week-long PIDA Week, held from 26-29 November 2018.
“It is obvious that once completed, the Kazungula Bridge Project will actually bridge the regional divide,” Mamady Souare, Manager for Regional Integration Operations at the Bank told the 110 participants and reporters who made the trip from Victoria Falls to Kazungula.
“The project will transform the dynamics of transportation in surrounding communities, counties and cities, boosting road travel and the ease of doing business within the Southern African Development Community, the East African Community and the Common Market for Eastern and Southern Africa,” Souare further remarked.
The development has been facilitated by a tripartite arrangement between Botswana, Zambia and Zimbabwe on the North-South Corridor within the Southern Africa Development Community (SADC) region and is part of a corridor-long infrastructure improvement programme, to enhance regional trade and integration.
Following feasibility studies and funding approval for the nearly $260 million project by the board of the African Development Bank in 2011, construction began in 2014, after the governments of Zambia and Botswana announced a deal to build a bridge, replacing the existing Kazungula ferry service. The principal financiers of the project include the governments of Zambia and Botswana, the African Development Bank, the EU-Africa Infrastructure Trust Fund grant and the Japan International Cooperation Agency.
Zimbabwe was brought on board the project as a stakeholder in March 2018, after Presidents Emmerson Mnangagwa of Zimbabwe, Ian Khama of Botswana and Edgar Lungu of Zambia jointly inspected the progress of the multi-million-dollar project.
Also addressing media in Kazungula, Ibrahim Mayaki, Chief Executive Officer, NEPAD Agency said: “Progress is not only visible on the Kazungula Bridge Project, but this project is proof of the consensus and focus on infrastructure development amongst regional and continental stakeholders and credit must be given to PIDA for this…”
As of October 2018, the project had created about 1,485 new jobs including employment for 118 women.
From a policy perspective, the Kazungula Bridge Project leverages the African Development Bank’s Industrialization Strategy for Africa (2016 - 2025). It also aligns with several programs and strategies put in place by regional and continental bodies to improve infrastructure as an anchor for sustainable transformation. These include: the SADC Regional Infrastructure Development Master Plan; the Revised SADC Regional Indicative Strategic Development Plan 2015 - 2020; the Tripartite Trade and Transport Facilitation Programme; the New Partnership for Africa’s Development (NEPAD) Short-Term Action Plan, and PIDA.
As the first wave of vehicles and pedestrians begin to use the new bridge, the regional economy will receive a much-needed boost through increased traffic throughout the North-South Corridor, a key trade route linking the port of Durban in South Africa to Botswana, Zambia, Zimbabwe, Malawi, Mozambique, DR Congo, and up to Dar-es-Salaam in Tanzania.
The facility will effectively serve as a gateway for goods from landlocked Zambia and Botswana to the afore listed countries straddling the North-South Corridor, a geographical zone of about 279 million people, larger than the populations of France, Germany, the United Kingdom and Spain combined.
When completed, the bridge and one-stop-border-posts facilities will enhance regional trade, spur increased global competitiveness due to reduced time-based trade and transport costs, and reduction of transit time for freight and passengers from between three to eight days to less than half a day.
Cape Verde could be on the brink of a hotel development wave if the government fulfils its promises to improve infrastructure and transport links.
It aims to attract more than a million tourists a year by 2020, far more than the current hotel supply can cope with. So investor opportunities on the archipelago, strategically located in the Atlantic Ocean around an hour from Dakar and around four hours from Brazil and Lisbon, could be enormous.
A detailed analysis comes from Horwath HTL, a global leader in hotel, tourism and leisure consulting, ahead of the new Forum de l’Investissement Hôtelier Africain (FIHA) in Marrakesh in February 2019.
The conference, organised by Bench Events as a sister event to the long-established Africa Hotel Investment Forum (AHIF), will focus on the markets of north and west Africa.
During the conference, Philippe Doizelet, Horwath HTL’s Managing Partner, Hotels, based in Paris, will be sharing his expertise, gained from 300 development studies both in France and internationally. His verdict on Cape Verde, where 45% of GDP comes from tourism-related services, is: “Economic stability and growth, combined with improved international links, could present a golden scenario.”
The country has experienced a boom in hotel construction in the last decade. From 2010 to 2016 the number of rooms in the country rose by 94% (from 5,891 to 11,435 rooms).
This has led to an increase in interest from leading international tour operators (TUI, Thomas Cook, Look Voyages, Solférias, etc.) who have gradually programmed the archipelago as a top leisure destination, thus generating substantial arrivals by charter flight.
According to Horwath HTL, short term hotel development opportunities in Cape Verde are mainly located in Sal, Boa Vista and Praia. Sal and Boa Vista are expected to remain major group leisure destinations; however, Praia is expected to develop as an administrative and business hub.
In the medium to long term, the Cape Verdean hotel market is predicted to expand as follows:
Sal is expected to become an established destination for leisure groups and to gain importance for the Meetings, Incentives, Conferences and Exhibitions (MICE) market. Boa Vista is expected to see growth in both group and individual tourism plus the development of a wide-range of leisure activities.
Santiago’s capital, Praia, is expected to attract a more corporate/ MICE clientele; whereas northern and central regions of Santiago are predicted to appeal to individual travellers with a focus on eco-tourism.
Sao Vincente, which is currently considered to be Cape Verde’s cultural capital, is likely to evolve as a cultural, natural and beach tourism destination for individual leisure clients.
Philippe Doizelet added: “Water-supply, electricity distribution, internet connection and road networks remain the major constraints for further expansion of the sector. As a result, the Cape Verdean Government has recently dedicated significant funds to further stimulate development, including the launch of an ambitious transport construction program, as well as introducing attractive incentives for tourism investors.”
Matthew Weihs, Managing Director of Bench Events concluded: “FIHA is a unique forum for francophone Africa, uniting the north and west of the continent and helping countries, like Cape Verde, develop their economies via hospitality investment. The CEO-level speakers, alongside Government ministers, will inform the audience about substantial opportunities.
That’s all complemented by networking sessions with leading experts, enabling delegates to establish relationships and to pose questions to which they’ve always wanted answers.”
Credit: New Business Ethiopia
Mauritius has been ranked the most prepared country in Africa for shopping online, according to UNCTAD’s Business-to-Consumer (B2C) E-commerce Index for 2018.
The index was released at the Africa eCommerce Week in December. Forty-three African countries feature in the 151-nation index but make up as many as nine of the bottom ten.
First-ranked Mauritius placed 55 in the global index, which is topped by the Netherlands, Singapore and Switzerland.
“Africa trails behind the rest of the world in its preparedness to engage in and benefit from the digital economy. Three-quarters of the African population have yet to start using the Internet,” UNCTAD Secretary-General Mukhisa Kituyi said.
“However, the continent is showing progress in key indicators related to B2C e-commerce. Since 2014, sub-Saharan Africa has surpassed world growth on three out of the four indicators used in the index,” he added.
“We estimate that there was at least 21 million online shoppers in Africa last year, less than 2% of the world total, with three countries – Nigeria, South Africa and Kenya – accounting for almost half. Nevertheless, the number of African online shoppers has surged annually by 18% since 2014, faster than the world average growth rate of 12%.”
The top three African countries in the index each has a distinctive strength in one of the four areas measured by the index which not only counts numbers of online shoppers but measures ease of payment and delivery.
Mauritius has a considerable 12-point higher score than the next African country. This small island developing nation scores relatively high in all four areas but particularly in the share of the population having a bank or mobile money account (90%).
Nigeria, the most populous African nation, ranks second, largely thanks to a significant increase in postal reliability as measured by the Universal Postal Union (UPU). As Africa’s largest B2C e-commerce market (regarding both number of shoppers and revenue), reliable delivery of products is critical.
South Africa is third, level with several other African countries – Cabo Verde, Gabon, Mauritius and Morocco – for its Internet penetration, with around six in ten inhabitants using the Internet in 2017. South Africa leads by some margin in the number of secure Internet servers per one million people – an indication of websites accepting online sales and payments.
While African countries need to boost Internet penetration to grow e-commerce, many also have to get more of its existing Internet users to trust the online market for making purchases. Unlike developed markets, such as in the European Union, where 68% of Internet users made an online purchase in 2017, the corresponding figure in Africa was only 13% on average in 2017.
While the B2C E-commerce Index correlates with the proportion of online shoppers for the world as a whole, in Africa this relationship is more tenuous as other factors than those captured by the index may be at play.
The main reason some countries score relatively low on the index (relative to their online shopping rank) is their low scores in the UPU postal reliability index.
Similarly, having a bank or mobile money account may not be as important as it is in other developing or developed regions since cash-on-delivery is the dominant mode of payment for e-commerce in Africa.
UNCTAD supports the ability of African countries to engage in and benefit from e-commerce through its Rapid eTrade Readiness Assessments of least developed countries. These reports identify bottlenecks and propose remedies and, as of December 2018, assessments in Africa have been completed for Burkina Faso, Liberia, Madagascar, Senegal, Togo, Uganda and Zambia.
Africa has seen the highest growth among businesses run by women in recent years. This would appear to be good news: entrepreneurship is arguably crucial for job creation and economic growth.
But the flip side of this data is that businesses run by women are less likely than those run by men to grow because of a higher fear of business failure. This is not because women are bad entrepreneurs. Instead, it’s because they often start from a lower base. They have less start-up and investment capital, and possess little or no collateral security. This limits access to loans and credit. They are also affected by exclusion from certain sectors, as well as insufficient staff numbers. All these factors affect the growth and survival of their businesses.
This low base means that when it comes to sales, number of employees, revenue and productivity, women-owned businesses in developing countries tend to be smaller in size and grow more slowly than those run by men. Yet, research shows that those businesses are equally efficient and growth oriented as male-owned businesses.
This discrepancy led us to wonder whether there are targeted policies African governments can use to promote high-growth women’s entrepreneurship. So we conducted a study that evaluated why high-growth women-owned businesses are relatively rare in Cameroon.
The West African nation’s legal and commercial infrastructure, as well as its government support programmes related to some sectors’ entrepreneurial activities, are – on paper – more developed when compared to those elsewhere in the region, like Nigeria and Ghana.
But conversely, it has one of the highest business discontinuation rates and the lowest rates of opportunity-oriented early stage entrepreneurial activity in Africa.
Our findings reveal how being embedded in formal and informal networks enabled women to access and act on resources; this allowed them to realise slow and continuous business growth. But it creates a paradox. Women become locked into complex administrative, ethnic and patriarchal structures. These create reciprocal obligations that are difficult to fulfil, and limit women’s room for high growth.
A struggle to grow
In 2017, women constituted 49.96% of Cameroon’s population of 24 million.Previous research has found that 41.9% of Cameroonian women are interested in becoming entrepreneurs. And, of those who are already entrepreneurs, 56% are doing so because they see a real opportunity; 36.6%, meanwhile, say they are running their own businesses merely to survive.
Another study has found that about 70% of Cameroon’s women entrepreneurs are involved in the tertiary and services sectors. These include wholesale and retail trade, education, health and social services, arts and crafts, events management, food and beverage, hospitality and tourism. This trend carries into other African countries, too.
But their businesses face serious resource constraints. This is partly because of socio-cultural and structural inequalities that favour men. Women entrepreneurs struggle to obtain credit, and to access entrepreneurship education. They also battle to deal with government officials, and cultural norms make it difficult for them to cultivate business networks.
All of this, along with the reality of starting from a lower base than their male counterparts, makes it tough for women entrepreneurs to start big. They then battle to create growth-oriented businesses.
This is a blow for women entrepreneurs, and can have a real effect on their lives. Growth-oriented women entrepreneurs have been found to be among the happiest workers in any economy. More broadly, it has ramifications for the country’s economy.
Lessons and solutions
These concerns and experiences were all borne out in our study. We analysed questionnaires, focus groups and interview data collected between 2014 and 2016 in Cameroon.
The data also offered some potential solutions.
For instance, it is clear that countries need to create networks or regional clusters that specifically target women entrepreneurs who display growth aspirations. One approach would be to extend existing government policies on traditional manufacturing industry clusters to the women-dominated service industries.
Another would be to revise or expand a country’s national employment fund and tax incentives to deliberately target women entrepreneurs with growth intentions. This approach could be tailored to women who are already in the business system, and would be designed to help pay for training opportunities and to enable market access.
Women entrepreneurs also need to be aware of existing government initiatives and networking opportunities. Examples of formal networks providing support to women entrepreneurs in Cameroon include the Association of Cameroonian Business Women, Cameroon Women Entrepreneurs Network and Cameroon Employers Association
These organisations act not only as knowledge exchange and networking platforms but, importantly, serve as bridges between women entrepreneurs and their organisations, and various government departments and international NGOs. Membership would enable growth oriented members to be aware of and access existing opportunities.
Finally, it would be very valuable for women who are interested in high-growth entrepreneurship to learn about those who have come before them. There are women who have overcome the odds to become high-growth entrepreneurs in different African countries. Their lessons may be useful in educating others, and in informing policies to increase the number of high-growth women entrepreneurs in Africa.