In a speech given on 8 September 2010 in London, former South African President F W de Klerk spoke about the legacy of the first African World Cup.

This is the text of the speech which earned the former President two standing ovations.

Six years ago the Fairy Godmother - in the guise of Sepp Blatter - waved a magic wand, and announced that South Africa had been chosen to host the 2010 FIFA World Cup. For the first time in history, Africa - the Cinderella continent - had been chosen to host the world's premier sporting event.

Mind you, had it not been for a little legerdemain and the mysterious voting of the FIFA representative from Oceana, South Africa - and not Germany - would have hosted the preceding World Cup in 2006. President Nelson Mandela who had attended the announcement in 1999 with great expectations, remarked laconically “Ah well… there evidently were some aspects of the end game that we South Africans did not fully understand.”

So, in the 2004 announcement, it was Africa's turn. Sepp Blatter had all but promised that no more ugly first-world stepsisters would be permitted to jump the queue.

From that moment the countdown started.

The world was sceptical. We heard again the old familiar choruses that precede all major global sporting events, wherever they are held: The stadiums would not be ready; security was inadequate; the infra-structure of airports, railways and roads would simply not be able to cope.

The skepticism continued right until the eve of the event. In May this year YouGovStone, on behalf of SABMiller, carried out research among its network of influential people to establish their views on the coming event. The results were, to say the very least, discouraging:

Most South Africans, on the other hand, had little doubt about our ability to hold a successful World Cup. After all, we had already hosted very successful Rugby and Cricket World Cups in 1995 and 2003. In 2009 - at the drop of a hat - we had been able to step into the breach and host India's wildly popular 20/20 Cricket Competition after the security situation in India had made it necessary to move the event.

The fact is that one of South Africa's strengths is its ability to manage large projects. We have excellent - and highly competitive - civil engineering companies that successfully participate in and manage large projects all over the world.

If anything, South Africans were a little too optimistic. One of our leading real estate companies provided advice to home owners on how they could convert their homes into B&Bs and make fortunes during the four weeks of the World Cup. As a result, hundreds of expectant homeowners built luxury guest suites and waited forlornly for bookings that never came. Small entrepreneurs seriously overestimated the number of visitors who would come to South Africa for the event.

Restaurateurs geared up for a bumper season - but most were deeply disappointed: not only did international crowds not descend on their eateries, their regular South African customers also stayed away in droves because for a whole month they were glued to their TV screens watching soccer!

Despite all this, Danny Jordaan, the Chairman of the local organizing committee, and his team made steady progress.

Our leading companies jumped onto the bandwagon and helped to sweep up national support. Government, opposition, religious and civil society leaders embraced one another and exhorted the nation to make a success of the event. Unprecedented security arrangements were made and special courts were established to dispense swift justice to law-breakers.

In the process, South Africans also learned that the FIFA fairy godmother was not motivated solely by altruism. She made it clear that she - and she alone - would choose Cinderella's ball gown and accessories.

Apparently unconcerned about any practical implications, Sepp Blatter insisted that the Cape Town Stadium should be built in Green Point - because he thought it would look pretty with Table Mountain as its backdrop. The City would rather have upgraded the existing Newlands Stadium - or built a new stadium at Culembourg, close to existing rail and road routes. However, FIFA was adamant that it would either be Green Point - or there would be no games in Cape Town at all.

Most of the accessories - including the flags, vuvuzelas and even Zumi, the World Cup mascot, were manufactured in Asia. Companies that were not official FIFA sponsors were prohibited from displaying their wares or advertising anywhere near the games. Our stadiums were suddenly flooded with American Budweiser beer - a virtually unknown product - and our own excellent Castle Lager was nowhere in sight.

Nevertheless, it worked.

For a glorious month South Africans laid down the burden of our divided history and joined one another in a magnificent national festival.

We celebrated wildly when, against all expectations, Bafana Bafana drew against Mexico. We commiserated with one another when we lost to Uruguay and had to exit the competition. Nevertheless, despite our 83rd ranking we did quite well and performed better than many other countries - including France - that were much higher up the international ladder.

Once we had been knocked out, South Africans switched their allegiance whole-heartedly and without reservation to Africa's best remaining hope, Ghana. Black South Africans were surprised that nearly all whites identified with Africa - with Baghana, Baghana - rather than with England or some other European country.

When Ghana sadly - and unluckily - left the fray, many black South Africans returned the compliment and supported Holland, because of its historic ties to many of their white compatriots. Such were the times and such was the spirit that animated our people for that magic month in the depth of the southern winter.

But as with all fairy tales the clock struck twelve.

Cinderella had to scurry down the palace steps, and confront again the harsh realities of our national life. The party was over. The bunting was removed. Our national attention shifted from the empty stadiums to the continuing poverty and inequality in which too many South Africans continue to live. The vuvuzelas were silent. Strident voices again began to dominate the national discourse.

Nevertheless, during those four weeks we had successfully changed international perceptions of our country. It was clear from another survey carried out by YouGovStone on behalf of SABMiller in August 2010 that there had been a major and positive shift in attitudes toward South Africa.

The survey revealed that:

Unfortunately, since then we South Africans have been attracting attention for all the wrong reasons. On the soccer field of international opinion we have been resolutely scoring one own goal after another.

Alas, the silly season continues. Julius Malema continues to bellow about the nationalization of the mines. President Zuma and the ANC - with a weather eye on international credit ratings - continue to insist that this is not their policy. The increasingly divergent factions within the ANC Alliance continue to circle one another, hurling insults, before the ANC's important National General Council later this month.

The situation is back to normal.

Cinderella is back in the kitchen, sitting on the ash-heap. The FIFA fairy godmother has flown off to her next assignment in Brazil - weighed down by almost two hundred million dollars in profits. The Afro-pessimists have returned in strength, confident that South Africa's World Cup success was just a flash in the pan.

However, we South Africans have always been much more realistic than that.

We did not expect that the World Cup would change the underlying realities of South Africa - and it did not.

Anyone who expected such outcomes would really have to believe in fairy tales.

However, by the same token, all these developments have not seriously undermined the strengths that made the World Cup success possible.

I am confident that we will once again prove the pessimists wrong.

The glorious weeks of the FIFA World Cup are receding further and further into our collective memory - but some things will remain,

As we all know, Cinderella, in her headlong flight down the palace steps, left something of her magic behind in the form of the crystal slipper that was retrieved by Prince Charming. The FIFA World Cup left us with a similar magic legacy: it is the shining vision of the brilliant, multifaceted nation we can and will become.

This, I believe, is the main legacy of the World Cup: it has shown us the nation that we can become if we all unite behind a worthy vision and work together in the spirit of June/July 2010.

South Africa is set to benefit in the next 10 to 15 years from major investment in infrastructure and manufacturing from the BRICS – Brazil, Russia, India, China - which represent 42 percent of the world’s population and 18 percent of its GDP. John Battersby and Yingni Lu explore the real implications of the new grouping for Africa.

South Africa’s invitation to join the group last September – and its high-profile inclusion at a well-orchestrated summit in Beijing in mid-April - has put South Africa in the league of the world’s fastest-growing and potentially most influential group of nations.

The four founding BRICS differ widely in their economic indicators and demographics but they all share a need to see a successful conclusion of the Doha round and the removal of barriers between the BRICS themselves to promote more open trade and investment.

South Africa’s inclusion is recognition of its strategic role in Africa and its ability to act as an interlocutor between Africa and the international community rather than because of its population or GDP.

The BRICS – the sobriquet coined in the aftershock of the 9/11 attack on the World Trade Centre by Goldman Sachs banker Jim O’Neill in search for the next “big thing” – have gained a momentum of their own in the past decade which means that in addition to reflecting the changing global economic landscape, they are playing an increasing role in shaping it.

The recent united insistence by the BRICS that the next chair of the International Monetary Fund should be chosen on competence alone rather than according to a region, indicates a political maturity. It is the first time that a group of developing nations has put pressure on a leading international organisation to select a chief executive who reflects the increasing importance of emerging markets in the global economy.

The rising power of the BRICS lobby holds potentially far-reaching consequences for the relationship between China and Africa in general and between South Africa and China in particular and is likely to have a profound impact on China’s rapidly growing trade and investment relationship with South Africa.

President Jacob Zuma has worked strategically to build the relationship with China and argued persuasively for Africa’s inclusion in the BRICS group through South Africa’s membership. He has already paid a state visit to China, hosted President Hu Jintao in South Africa and attended the BRICS summit in Beijing in April.

For Zuma, it is not a question of South Africa boxing above its weight. It is just basic logic that a continent central to sustainable global growth should be included in the club and Zuma has already overseen a rapid deepening of South Africa’s relationship with China.

Zuma’s leadership stands to win major contracts for South African companies and para-statal corporations in developing African infrastructure in what has become the world’s third-fastest growing market after China and India. Africa grew at 4.5 percent last year and is expected to reach 5.2 percent this year. South Africa is set for a more modest 4 percent.

South Africa is also a benefactor of better access to BRICS markets and, at the same time, it is a competitor or joint venture partner in the development of Africa.

Aware of the massive savings pool that China and other BRICS nations are sitting on, Zuma is inviting investors from BRICS countries to take up the major infrastructure and manufacturing opportunities in South Africa and on the African continent. Both the private and public sectors of the country stand to be leading beneficiaries of this offer.

The BRICS have decided in principle to establish mutual credit lines denominated in local currencies rather than US dollars, a move that is seen to promote cooperation between countries over a wide range of projects, and has proven to be able to facilitate trade and investment between these countries.

Such arrangements are already working to the mutual benefit of China and Brazil which has deepened China’s relationship with Brazil’s state-owned oil company, Petrobras.

Recently, China Development Bank’s Chairman Chen Yuan has said that the bank is prepared to lend up to $1.5-bn in local currency to fellow BRICS, in particular, for oil and gas projects.

Last year Zuma was appointed to head the African Union’s high-level sub-committee on infrastructure which will oversee an estimated $480-bn of infrastructure investment on the continent in the next decade. But Zuma’s influence will extend far beyond infrastructure into the vital areas of food production and environment.

The realpolitik of the situation is that the bulk of this work is likely to be awarded to China, South Africa and other BRICS.

With South Africa serving its second term as a non-permanent member of the UN Security Council and Zuma’s appointment as co-chair of the COP-17 Climate Change Summit to be held in Durban in December, the South African President is well-placed to help forge a grand trade-off between the industrialised and developing worlds.

If South Africa can help broker a breakthrough in the global trade-off between environment and development it could give a much-needed boost to South Africa’s own renewable energy and clean technology industries. This COP 17 will have made major progress by establishing either a reformed global market mechanism to regulate emissions or by extending the current one to include the United States and China.

China, both because of necessity and its history of pragmatic adjustment, is well-placed to become the world leader in developing cleaner and more sustainable technologies which will supplement and ultimately replace fossil fuels as the world’s primary source of energy. South Africa is ideally placed to contribute to this global priority.

After hosting the World Summit on Sustainable Development in 2002 and more recently committing to the Clean Development Mechanism, South Africa has vowed to reach its targets on reducing emissions and carbon management. But in a country with high unemployment and underdevelopment, it has to continually weigh the dictates of environmental management with those of developmental priorities.

As the pace of regional integration within the Southern African Development Community (SADC) quickens – a goal that Zuma has put at the top of his priorities list – the economic rewards for South Africa will come in the form of increased foreign direct investment and expanding trade relations.

The evolving free trade agreement between the overlapping regional economic communities of SADC, the Common Market of East and Southern Africa (COMESA) and the East African Community (EAC) is likely to give further impetus to this process.

South Africa is already thinking BRICS. It is upgrading flight connections and tourism offerings to the BRICS nations as well as tailoring investment opportunities and conditions to meet the requirements of its new-found strategic partners.

President Zuma has pointed out that South Africa’s membership of BRICS will open access to the markets of the world’s high-growth developing economies as well as heralding new and exciting opportunities for South African companies to develop new business and partnerships.

South Africa’s robust private sector is gradually waking up to these opportunities and some – such as Standard Bank – were ahead of the game when they sold 20 percent of the bank to International Commercial Bank of China three years ago in what was China’s largest-ever foreign investment at the time.

Since then, several key Chinese companies have opened offices in the country and Beijing has located the Africa headquarters of the China-Africa Development Fund in Johannesburg.

BRICS, with Africa now represented in “the club”, will deepen south-south co-operation and have the potential to change the game rules of international finance and trade and give a voice to developing countries on a whole range of issues ranging from climate change to development.

The main priority of the BRICS is to ensure that the Doha round is completed and that the industrialised countries scrap subsidies and protectionist measures to allow the developing world better access to global markets. Such a move would boost the level of international trade although it would shift the balance towards the markets of the south and THE east. This shift is already taking place and will gain momentum but an orderly transition via the WTO would be less disruptive.

Africa is set to achieve growth levels which will empower its 1-billion citizens and enable the continent to elevate millions from poverty as China has done for some 400-million poor in the past 30 years.

South Africa’s inclusion in the BRICS in December last year, largely as a result of strong lobbying by China, came as a surprise to many – not least to O’Neill who argued that countries such as Indonesia, Turkey and South Korea were far stronger contenders. But such notions underestimate South Africa’s strategic importance to Africa, China and the industrialised world and its unique potential in acting as a bridge between them.

South Africa will continue with its membership of the trilateral commission comprising India, Brazil and South Africa (IBSA) as well as its key membership of the G20 group of nations.

But there are hurdles on the road ahead.

The China-South Africa trade relationship is heavily in China’s favour and it will take some skilful political arm-twisting to achieve a more sustainable trade balance by getting the Chinese engaged in more joint ventures, manufacturing and beneficiation in line with the country’s recently released economic road-map, the National Growth Path, which seeks to ensure more leave-behind from foreign investors.

Despite China’s position as South Africa’s biggest two-way trade partner based on South African exports of mineral resources, the European Union remains South Africa’s most important export market and responsible for 40% of foreign investment. But it is probably inevitable in the medium to long-term that China will become a more important export market for South African goods.

While the United States is set to remain by far the most powerful global economy in the next two decades, the changes now underway and symbolised by the BRICS group will prepare the ground for profound changes in the global order in the next 20 to 25 years.

South Africa and China – and the other BRIC nations – will be key players in the forging of a more interdependent, sustainable and equitable world.

This article first appeared in Exchange Magazine

Joining the elite club of emerging powerhouses is an enormous boost to South Africa’s brand, reports Nosimilo Ramela

South Africa’s ascendance to the BRICS group of major emerging economies is a boost to the country’s brand, Miller Matola, CEO of the International Marketing Council, said at an IMC roundtable discussion with London’s Financial Times.

"One way or another, this will help us achieve our country’s development objectives," Matola said. He added that membership of BRICS – the economic alliance that includes Brazil, Russia, India and China – puts South Africa on the centre stage of global change, rather than on the sideline, he said.

"This helps us as a brand. What it says to the world is, consider us a serious economic player."

The roundtable event, held at Summer Place in Johannesburg, brought together South Africa’s top business executives and politicians to examine South Africa’s role in BRICS and the opportunities membership presented to the country and the rest of the African continent.

It included a panel discussion among top CEOs and some of the best brains in South African business: Maria Ramos of the Absa banking group, Jerry Vilakazi of Business Unity South Africa, Frontier Advisory’s Martyn Davies, and Benjamin Mophatlane of Business Connexion. The discussion was facilitated by Financial Times bureau chief Andrew England.

Most speakers made the point that, in addition to South Africa’s strong economy and developed infrastructure, the country’s position as the gateway to the rest of Africa gave it a valuable role in BRICS.

Davies made the point that the ‘S’ in BRICS should actually stand for SADC, and not South Africa, referring to the Southern African Development Community of 15 African states, including Botswana, the DRC, Angola and Tanzania. "This partnership will not only benefit South Africa, but also the continent, as it will open up trade in Africa," he said.

Speaking before the discussion, deputy minister of International Relations and Cooperation Ebrahim Ebrahim said that while South Africa does not officially represent the continent in BRICS, its membership would give Africa a stronger voice, not only within BRICS, but also across all international platforms in which the BRICS countries are individually represented.

He added that South Africa’s accession to BRICS is a natural fit.

"Our positive attributes that put us in a different category include our role as a major economic player in Africa, our mineral and industrial output, our electricity generation capacity, our road, rail, ports, communication infrastructure, our sophisticated financial markets and service industries, our manufacturing capacity, our membership in the G20, and our level of industrialisation," he said. "All these, and many more, profile us in a very positive way."

The membership was the result of two years of in-depth planning and joint efforts by the public and private sector, Ebrahim said, adding that South Africa should not underestimate its status as a deserving member of BRICS.

"We agree that we do not have a major world population size in comparison to other BRICS member states, including the high-digit growth rates enjoyed by its BRICS partners," he said.

"We move from the premise that there are attributes that fellow BRICS member-states see in us that we choose to overlook or undermine. We also argue that if we consistently profile ourselves as that small country on the southern tip of Africa, we will go nowhere."

This article was first published by Mediaclub SouthAfrica

Outsourcing expert Bobby Varanasi, CEO of Matryzel Consulting, offers some insights on the likely impact of Egypt’s political crisis on its outsourcing sector, and whether this creates any openings for sub-Saharan Africa’s aspiring outsourcing destinations

Egypt's positioning in the past two to three years with respect to its differentiation has paid off significantly, resulting in over 30,000 jobs in the country, especially in areas like Cairo and 26th of October City where their key technology park is located. These jobs are basically created by multi-national companies (MNCs) like HSBC, Orange, IBM, Teleperformance, Microsoft and a large local player Xceed. But there are also smaller players like Raya and others. All these firms, in particular the MNCs, have selected Egypt as the base location for their MENA operations, which is part of a wider global services supply chain. This helps to ensure that commitments are long-term.

The Egyptian government has provided significant policy direction, incentives and training support through the Information Technology Industry Development Agency (ITIDA), and spearheaded a lot of proactive measures aimed at creating employment. The latter has been a crucial concern, especially given that over 40% of the population is below the age of 35. 26th of October City is being built with a fervour rarely seen in such challenging countries, and that is unparalleled in the MENA region. This has been a very positive development so far, and will continue to be so regardless of current conditions.

Initial causes for concern surrounding suspension of the internet, banking systems, stock markets etc are valid industry concerns. However, for this particular industry, given that telecommunications services are dedicated to the players and providers under ITIDA, operations have continued with no major interruptions per se. Therefore I do not expect clients to be inconvenienced significantly with either services or access.

ICT sector development has been, and continues to be, a key thrust for Egypt, given the economy’s inordinate dependence on old industries in the primary and secondary sectors like oil and gas, the Suez canal, and cotton and fruit production. Job creation in these industries has not kept pace with population growth, resulting in real unemployment (including those who have stopped looking for jobs) of around 27% to 32%, which is alarming given the sensitive region Egypt is a part of. I do not anticipate the government being able to make any structural changes rapidly.

The Egyptian government and its population will probably continue to look at the ICT sector with positive expectations: after all, this very sector helped the people amass millions in Tahrir Square via Facebook and SMS, so they are not going to let go of this flexibility easily. Perhaps only the government could curtail ICT access, which I think is unlikely to happen. Too much of its industry is at stake for such harsh decisions.

There must have been temporary disruptions in operations of the BPO industry, esp. with staff movements, given that most folks who work in 26th of October City do not live in that city just yet - the residential areas are being constructed with the same energetic drive as the remainder of the city -, but reside in Cairo. It is usually a one-hour commute from Cairo to their workplace in 26th of October City, which must have been affected by disruptions. Of course I assume that companies would have fallen back on their business continuity plans. For example, Orange's Egypt operations have Malaysia and Singapore as their business continuity sites; Microsoft's has India; HSBC has India, Malaysia and the Philippines; Xceed has Morocco; Teleperformance has Costa Rica, Prague and Jamaica. Hence work would have have continued with slight interruptions at these sites, which are business continuity sites for each other as well.

What will happen, and has most likely already begun, is a comprehensive review of business continuity plans, considered a geo-political factor in the context of location selections.

Perceptions will be the key thing to watch out in the coming weeks, and it is difficult to anticipate how the current crisis will play out, not the least because it is still unresolved. Clients exploring MENA operations, whether for their own centres or for co-operations with services providers like Xceed, Raya and others,

will perhaps worry enough to postpone current in-progress-plans or adopt a wait-and-watch policy.

So far, there have been no significant industry responses, nor any from bloggers or advisors. The industry is doing the obvious: follow the story closely and watch for specific experiences. What caused industry to stand up in concern was suspension of the internet? However, not many realized initially that outsourcing organisations in Egypt use dedicated IPLCs whose services continued unabated and unrestricted. Internet suspension was more a ploy aimed at disabling communication amongst individuals in the streets, not corporations within the nation.

I do not see this tarnishing Egypt's reputation per se. Access to over 40m young people who speak English, French, Spanish, German and who are cheaper labor is too much of an opportunity to pass by. This geo-political crisis will resolve eventually itself, but its repercussions, though not major, will undoubtedly continue to be debated by the industry for some time to come. Therefore, for Egypt, current pursuits with new clients will take a back seat, putting ITIDA under pressure. ITIDA's responses should be watched closely, and so far, they have not made any statements, but I understand that they will continue to participate in global industry events.

Since most MNCs are committed to Egypt and the region in general, they will continue to operate within their confined environments. Whether they will expand more within Egypt is an incorrect question. That's because locational expansions are strategic decisions pursued within the context of expanding their services supply chains, and not about just leveraging one location at the expense of the other.

Any attempt to leverage on the Egypt crisis will not succeed, not the least because after the post-election violence in early 2008, Kenya will struggle to claim geopolitical stability. In fact, even despite the massive network coverage of its own crisis, it has had limited impact on FDI into core sectors and the local industry – which will also be the case with Egypt. Egypt will have issues attracting new investments at least for a while before the industry bounces back and looks beyond the current crisis. This has also been the case with Kenya, and I would wager that Egypt will bounce back faster than Kenya has, simply because Egypt is considered a proven sourcing destination, while Kenya is still an emerging aspirant.

And to try to bank on Egypt’s crisis it is also fundamentally a short-sighted argument: Clients will want to see more than arguments based on the absence of a crisis. Kenya needs to be able talk from a point of strength, and this lies in government commitment and industry responsiveness. This means that Kenya will have to talk a different language: that of being the key gateway to Sub-Saharan Africa, and not just another cheap location for cheap, commoditised services.

Kenya's sporadic buzz is still perceived as not serious enough and it is important that the industry get its act together. What I said two years ago still applies: Industry leads market conversations. Given that this very structure is not in existence as a concerted single entity, the only other option would be for the Kenya ICT Board (KICTB) to take the lead, and they are still finding their feet in this industry as well. Going after partnerships with South Africa is unlikely to succeed since both countries compete for the very same business! What needs to happen is the following:

Both have to happen concurrently, with consistency and a long-term perspective. Currently there is too much rhetoric and too little progress to show. The euphoria of the fibre-optic cable has come and gone. And the industry needs a champion. That cannot be the World Bank, and cannot be the government alone. The industry has to first and foremost ask itself a few hard questions how it compares globally, and then involve the government in implementing concerted actions.

South Africa's ascension to the BRICS grouping is recognition of the country's huge potential and rightly places it alongside the leading economies of tomorrow.

South Africa's economy is smaller than those of Brazil, Russia, India and China, but it is also the gateway to the African continent, allowing it to punch well above its weight by linking the BRIC economies to more than 1-billion consumers.

Africa is the fastest growth region after China and India; McKinsey & Company have identified a $2.6-billion revenue opportunity from the continent. Africa boasts unexploited mineral wealth, 60% of the world's uncultivated agricultural land and the youngest age profile of any continent.

South Africa's joining BRICS reflects the reality that the country is a first-tier, not a second-tier, emerging market, and means that BRICS can now truly lay claim to represent the emerging world. In fact, South Africa is 27th biggest economy in the world, with a gross domestic product that the International Monetary Fund puts at $354-billion.

South Africa is growing for the future. Building on the achievements of the last 15 years, the New Growth Path (NGP) sets out a bold vision for creating an even more competitive, fair and socially cohesive economy. The NGP puts employment at the centre of economic policy. It identifies how greater efficiencies can be achieved in the economy, and the investments needed to create a truly advanced, 21st-century infrastructure

The NGP will create large-scale, sustainable jobs in key sectors through a collaborative approach. This will spur trade, innovation and economic growth of up to 7% per year – ensuring South Africa remains at the forefront of fast-growing emerging economies and an attractive investment destination.

South Africa is open to increasing trade and investment among the BRICS. Moreover, it is a viable emerging market with huge potential as an innovative hub, a sound investment destination and a leading emerging market economy.

South Africa is keen to work with businesses, governments and stakeholders in the BRICS countries to create a partnership model resulting in mutually beneficial investment opportunities for all.

The country's modern financial systems provide an ideal gateway for investments into the rest Africa. Eight out of the 10 largest companies in Africa are based in South Africa, and the World Investment Prospects Survey rated the country as a top-20 economy for foreign direct investment.

Moreover, South Africa's robust recovery from the global recession has led Fitch Ratings to raise its outlook for the country from "negative" to "stable".

Plenty of other factors make South Africa an ideal trade and investment destination. One is its mineral wealth: the country has the world’s largest deposits of gold, chromium, platinum and manganese.

The quality of South African institutions, its strong intellectual property protection, the accountability of its private institutions, and a stable and well-regulated financial sector all contribute to the ease of doing business in the country.

Johannesburg's JSE Securities Exchange is the 14th largest equities exchange in the world, with a total market capitalisation of some R2.3-trillion ($341-billion). In 2010, Wal-Mart made a $2.3-billion offer for 51% of South Africa's Massmart in the US retail giant's second-biggest investment in over a decade.

South Africa is a key player in global institutions and is confidently playing an increasingly critical role in the fast-changing governance landscape.

The country is a member of the International Monetary Fund, the World Bank, the World Trade Organisation and the United Nations system, including the International Atomic Energy Agency.

South Africa plays a pivotal role in reshaping global governance and financial and trade architecture. This is reflected in its membership of the G20 group of advanced and emerging economies which, in line with the shifting balance of global economic power, has begun to supersede the old G7/8.

South Africa has a stable democracy, a transparent system of governance, supported by prudent fiscal policies and a strictly regulated financial sector. With strong relations with international organisations and growing economic influence, the country is seen as an emerging power and influential mediator.

This article was first published in www.southafrica.info

Striking first oil is significant for any nation – and for any oil and gas company. But when oil flowed at the Jubilee field in Ghana, it was a particularly historic event.

November 28, 2010 will forever be bookmarked in the collective Ghanaian memory as the day the West African nation stuck oil.

On a hot Sunday morning, the first oil in the country’s history flowed from the giant deepwater Jubilee oilfield, which lies about one kilometre beneath the sea off the western coast of Ghana. Jointly owned by the UK’s Tullow Oil plc, Andarko Petroleum, Kosmos Energy, Ghana National Petroleum Corporation, Sabre Oil and Gas and E.O. Group, the Jubilee field contains around 1.2 trillion cubic feet of gas and possibly as much a 1.8 billion barrels of oil.

Initially the production rate will hover around 55,000 barrels of oil per day, rising to 120,000 barrels per day as new wells are completed over the next six months. By 2012, production is expected to reach 250 barrels of oil and 250 million cubic feet of gas daily.

According to Dai Jones, President and General Manager Tullow Ghana, the historic event is particularly significant for the for the sub-Saharan nation’s economic growth. “We are proud to be part of history and to contribute to this flagship oil and gas development project,” says Jones. “The wealth created from natural resources, particularly one that can generate energy, could bring large-scale foreign earnings into the country and be positive for Ghana.”

What’s also remarkable about the Jubilee field, says Jones, is that it is the “fastest-ever full-scale comprehensive development”. “It’s taken only three years from discovery to delivery of oil, which is a tribute to the dedication and hard work of a world-class team working on a world-class field.”

Indeed, Ghana achieved first oil in less time that Angola’s Girassol and Nigeria’s Bonga fields, both of which have roughly the same status and significance as the Jubilee field, but each took five years from discovery to commercial production.

The success of the Jubilee field has further boosted the fortunes of Tullow Oil, which is a well-established member of the UK’s FTSE 100 index. It’s also a topic that will no doubt be top of mind for Andrew Windham, Tullow Oil’s MD Africa, who will be attending the prestigious Next Generation Oil & Gas Africa Summit 2011 which takes place at the Arabella Western Cape Hotel in South Africa from 5-7 April 2011.

Windham is just one of the leading figures from the global oil and gas sector who will be tackling such topics as the changing drilling environment, seismic surveying and production optimisation, particularly as it relates to enhancing well productivity and reservoir management.

This closed door summit, hosted by GDS International, a leading business-to-business events company, will also feature such key delegates as Neil De Beer, Secretary General for the Organisation for African Business Development, Arsenio Mabote, Chairman of the National Petroleum Institute and Hon Isak Katali, Minister of Mines & Energy, Ministry of Mines and Energy Namibia.

Next Generation Oil & Gas Africa Summit 2011 is an exclusive C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networks

For more information, visit www.ngoafricasummit.com

Top Image: © 2011 Tullow Oil plc - Installation of the Kwame Nkrumah FPSO on the Jubilee Field in Ghana

London-based Yingni Lu reports on her visit to South Africa and how the country is addressing the challenge of sustaining its economic and social transformation.

South Africa is on a quest to transform itself to tackle the social challenge for sustainable economic growth, after it proved to the world that Africa can deliver on a global stage a few months ago by hosting the 2010 FIFA World Cup successfully, according to a speech by Dina Pule, Deputy Minister in the South African Presidency.

The South Africa government recently announced its new growth plan to unleash the power of a broader part of the population and to leverage regional markets.

I was lucky enough to join a group of 20 international journalists who experienced the vast opportunities that the country can offer. On my first trip to South Africa, I was impressed by South Africa's courage in recognising its weaknesses as well as the progress it has made to be more competitive and to build its human capital.

It was also a special experience for me to have the opportunity to interact with a few government ministers. I felt that if everyone in the country has the same determination, courage, wisdom and execution skills, it will be only a matter of time before South Africa is able to achieve its goals.

The real GDP increased by only 2.6% during the third quarter of 2010, well below the market expectation, which provides a great opportunity for the country to debate the crossroad that it is facing: whether to continue the easy export-led growth model that is energy intensive and may deplete resources, or to adopt a more sustainable one and invest in human capital development.

In an in-depth interview with we journalists, Mr. Ebrahim Patel, the Minister of Economic Development, stressed the need to build a 'stable democracy' to achieve sustainable economic growth by recognising and working on the challenges, especially on the social side, and by setting a target to create 5 million jobs in the next ten years.

This new growth plan is to target unemployment, which has been identified by the IMF as one of the biggest challenges to economic growth, and to mobilise that part of the population that is currently not able to take part in the nation's development.

As an immediate start, the country is at work on an 800 billion Rand infrastructure programme, which will not only create jobs, but also alleviate the constraint for future economic growth.

Another challenge faced by the country is education. According to the World Economic Forum, education, together with health, is one of the key constraints on growth in South Africa. Also according to HDI ranking, South Africa hasn't shown much progress since 2005, even though it has experienced almost the strongest growth since the end of apartheid. This confirms the finding from many other countries that economic growth doesn't necessarily bring improvement in education and health. This challenge will potentially undermine future competitiveness and attraction to investment in terms of workforce availability and productivity for South Africa.

For a country with great pride in its achievements since 1994, it takes courage and strong political commitment to recognise the nation's weaknesses, to encourage national debate and to put it into government policy. The new growth path has therefore identified the skills gaps that need addressing for sustainable growth, given the previous under-investment in engineers, technicians and artisans.

South Africa is now intent on improving education and training and has established a number of stretch targets and policies, such as one million more young people enrolled in education. Moreover, state-owned enterprises are obliged to expand their intake of people into in-house training, so as to provide a bigger base of artisans and technicians for the country. However, the country also recognises the immediate need for highly skilled engineers and workers and opens the door to attract people from elsewhere.

There is a strong commitment from the government to set a 'sector minimum wage' as well as a 'salary cap' for high earners. This is aimed to achieve 'income equality' and break the strong collective negotiation power, the latter of which was identified as low 'labour market efficiency' and has direct impact in doing business in SA.

Foreign investors will also be happy to see that the country is working to improve the physical space, bulk energy, access to ports, etc. in order to provide 'ready-made capacity'.

Another ambition shown in the new growth plan is for South Africa to help the African continent grow in a balanced way. The country's ports lie at the centre for goods being shipped from other African countries across the continent. The current railway infrastructure sees railway lines in Africa start from towns or cities in the middle and go down to the ocean, missing links between each other. This has constrained intra-African trade, which consists of only 10% of the total international trade of African countries, much lower than the figure of 70% for intra-European trade. This also points to the direction that South Africa needs to focus on in terms of infrastructure.

During the media tour to South Africa, I had the opportunity to listen to a panel discussion on how the infrastructure design for the World Cup has brought a legacy of culture with connectivity for the future of the country and its cities.

'Architecture is a tool for social change and development', said Hanning Rassmus, architect and the chair of panellists, 'and growth happens by design.'

Watching television, I noticed the frenzied discussions on how many different technologies have been used to build Olympic stadia in China and in the UK. However, the design of Soccer City Stadium particularly struck me because the design of the stadium is not about technology, but about its impact on people's lives.

For Soccer City Stadium, it surprises me as an 'inclusive design' with a much bigger vision to encourage poor people that used to feel excluded from the mainstream economy to take part in it by connecting them to the rest of the city.

There are hundreds of soccer fields in Johannesburg which are created by people using them every day. The location of Soccer City Stadium is one of them. It is without obvious commercial value because it is so isolated and is on top of a toxic abandoned gold mine field. However, it is lucky and full of potential because it is right between Soweto and Sandton and can link the south and north together.

This brand new stadium has been built and hosted the opening of the World Cup. To connect the different parts of Johannesburg, a Bus Rapid Transit (BRT) line was also built.

There are many ideas on how to develop the area, including a conference centre, entertainment centre and housing capacity. However, the stadium has linked the two parts of the city together. It is time for people to work together and make those ideas a reality.

For a city girl living in London, it is very difficult for me to imagine how difficult it could be to provide public transportation because buses and underground system are taken for granted. For Johannesburg, it is a long and tough process to create a satisfactory transport system.

The mini-bus taxi is unique to this historically divided society because during the apartheid era transportation was deliberately designed to separate the poor and the rich.

In Johannesburg, 72% of residents cannot afford private transportation and use the mini-bus taxi. Mr. Pei, a journalist based in Johannesburg for the past two years, described the mini-bus taxi, the only transportation method traditionally used by poor people, as 'no other choice' and their only way to go to work.

Rea Vaya, which means 'we are going' in township slang, is the initiative by the Johannesburg government to not only provide public transportation links, but also motivate and enable people to take part in the development and growth of South Africa.

During my interview with Councillor Rehana Moosajee, a member of the Johannesburg Mayoral Committee for Transportation, she explained how they persuaded key leaders from taxi industry that Rea Vaya was not merely a temporary transportation for the World Cup, but critical for the future of transportation and even for the city.

I was touched by the approach they have adopted to involve key leaders from the taxi industry and give them a stake in the taxi industry. Instead of a top-down approach, Rehana and her team invited two delegations from taxi companies to visit South America and study how their local bus and taxi industry has evolved.

In Colombia, where the situation is similar to South Africa, these delegations learned how future trends, such as economic development and climate change, impact urban transportation, and that it is possible for taxi companies to benefit from the transition. More importantly, they experienced and learned from people that had faced the same dilemma as they did and could trust, rather than being told the story. This study tour provided a solid foundation for these key leaders and, during the launch of Rea Vaya, the team also provided technical advice and independent facilitation to help the taxi companies transform their business.

Rea Vaya is an on-going project designed to face the severe congestion faced by Johannesburg residents. However, for me, it is more than that: it gives people the possibility and the hope to seize opportunities and to work for a more dignified life.

John Battersby reports on how South Africa’s focus is moving increasingly to trade and investment partnerships with other emerging economies.

The world has changed and South Africa will look increasingly to more integrated African markets and the new economic powers – China, India, Russia and Brazil – for trade and investment to create jobs and accelerate development in the country.

This was the core message of Economic Development Minister Ebrahim Patel to a group of visiting journalists from China, Russia, Africa, the Middle East and Britain as they got an upfront view of energy and transport infrastructure in Gauteng and KwaZulu/Natal during a week-long visit to the country.

The “gearing for growth” tour, organised by the International Marketing Council of South Africa, followed the release last week of the new growth path as the country gears up for a more intensive phase of growth following the hosting of the 2010 World Cup.

The report has sparked an intense dialogue about the economic model which can achieve a social compact between government, business and labour to best ensure sustainable growth in the medium- to long-term.

The journalists rode on the Gautrain and the Rea Vaya bus system, ascended the sky walk of Moses Mabhida Stadium in Durban, traversed the extensive container terminals and grain and sugar depots at Africa’s largest port of Durban and visited the expansive Sasol plant at Secunda.

They heard first-hand from the Ministers of Economic Development and Arts and Culture and met with business and civil society leaders. They visited the Competition Commission on the eve of a landmark case defining the extent of its mandate to dismantle cartels with interventionist financial measures.

There were many moments of insight and revelation during the six-day tour but the moment of truth for many of the visiting media came during the tour of Durban harbour by port manager Ricky Bikraj.

“When one sees and experiences the scale of this port you can better appreciate the crucial role of South Africa in the continent’s development,” said Onyekachi Wambu, a Nigerian-born journalist living in the UK who writes a regular column in New African, a London-based magazine.

Another moment of truth came with 90-minute briefing and question-and-answer session with Minister Patel which connected the dots for the visiting journalists by drawing together the various strands of the country’s emerging economic framework to balance development and growth for the benefit of all.

“I thought that Minister Patel was hugely impressive,” said Enoch Wambua of the Nation Media Group in Kenya. “He really knows what he is talking about and offers great insight into the future growth trajectory of South Africa and the continent.”

Coming face-to-face with a 71,000-ton sugar mountain at Durban harbour’s sugar terminal was one of the highlights for Nagy Abd El Aziz of Egypt’s independent daily, Al Masry Al Youm.

Egypt recently experienced a sugar shortage and wants to diversify its sources of supply. A deal to import South African sugar was announced during the visit.

The need for Africa to integrate trade within the continent and revamp rail and transport systems designed to benefit the former colonial powers rather than serve the continent’s own development was highlighted by Minister Patel.

He contrasted the low 10% market integration in Africa with 50% in Asia and 70% in Europe.

“The continent’s transport links reflect patterns of development designed to exploit natural resources and send them elsewhere to be processed,” he said, highlighting the problem of different rail gauges in different African countries.

He said that the rebuilding of Africa’s infrastructure could not be a South African project but needed to involve the whole continent.

“Our future lies in balanced economic growth across the African continent,” said Patel.

The media tour also highlighted the growing emphasis on renewable energy – such as nuclear and solar energy and hydrogen fuel cells – as a key factor in the country’s future economic growth.

Patel said that while some R800-bn would be spent on energy and transport infrastructure over the next three years, trillions of rands would be spent on energy infrastructure over the next 10 to 20 years.

“The opportunities in South Africa are huge,” said Lu Yingni, an expert in renewable energy who writes for the London-based Reconnect Africa website.

At a dinner hosted by the Financial Times and the IMC held in the Turbine Hall, Arts and Culture Minister Paul Mashatile provided an interesting insight into the role that arts and culture can play as a driver of economic growth.

He cited recent statements by Chinese President Hu Jintao, who has initiated such a process in China, in support of his thesis.

“We want to put the creative industries and cultural heritage at the heart of driving our economy,” he said, citing the role that cultural heritage could play in attracting more tourists.

MTN, the strongest brand in Ugandan telecoms, has consolidated a hefty 60% market share. Is the Ugandan market big enough to accommodate new competitors, or is the established structure already too entrenched?

In 2006, the Government of Uganda passed licensing reforms avowedly designed to lay the foundation for a fully competitive telecommunications sector, and there was a scramble for telecoms operator licenses. However, beyond the three companies that held licenses before 2006 – Celtel (now Zain, soon to be rebranded Bharti Airtel), MTN, and Uganda Telecom Ltd (UTL) –, only two companies have managed to eke out any sort of place for themselves in the mobile market.

At first glance, the market looks busy: A slightly confounding list of licensed operators, published by the Uganda Communications Commission (UCC), states that there as many as 36 current players in the telecoms market. Isaac Kalembe, spokesperson for the UCC, offers the list as evidence of the 2006 attempts to increase competition in the sector.

However, the licensing regime does not distinguish between different telecom services like mobile, payphones and data. All companies offering any telecom service are issued a Public Service Provider (PSP) license, and any company holding any sort of infrastructure for this purpose requires a Public Infrastructure Provider (PIP) license. Mobile companies Zain, Orange, and Warid hold both PSP and PIP licenses, as do internet providers Africaonline and Infocom, and IT firm Datanet.

The Uganda Electricity Transmission Company (UECTL) also makes the list as holder of a PIP license: Not as a competitor in the telecoms market, but according to Kalembe because it has a short frequency radio network used for internal operations.

Those in civil society listen on our behalf to the concerns of the people, who make up the most valuable part of our brand. Clearly, we need to monitor and measure more.

Rather inconsistently, MTN and UTL are exceptions and hold only National Telecommunications Operator (NTO) licenses, although Aussie Mutala, Makerere ICT lecturer and veteran of the Ugandan mobile sector, anticipates that when the NTO licenses expire, MTN and UTL will be given PSP and PIP status instead.

A significant number among the 36 PSP and PIP licensees, some of which are purportedly mobile companies, are not at all active in Uganda. In fact there are only five real mobile competitors. Based on revenue from airtime sales, the market share figures are as follows:

What this is means is that there have only been two successful entrants onto the market since 2006. MTN and UTL formed the pre-2006 NTO 'duopoly', and Celtel (now Zain) was the first mobile company in Uganda, operating under a Cellular Telecommunications Operator (CTO) license since 1993. But Uganda continues to attract interest, and the rising figures of consumption indicate that there might indeed be more space in the market.

Over 4 million new mobile phone-lines came into use between March 2008 and March 2009 alone, raising the total to 9.86m. Though growth has slowed down recently, the total number of mobile phone lines in Uganda in March 2010 stood at 10.3m, confirms UCC's Kalembe. By contrast, the uptake of fixed landlines has been slow: Over the same period, March 2008 to March 2009, only 44,103 new land lines were installed, bringing the total to a comparably lowly 210,655.

Of course 10.3m phone-lines do not equal 10.3m mobile users: many individuals own and use more than one SIM card. This means that not even one-third of Uganda's young population are using mobile services at this point. And while Mutala warns that the number of active mobile phone lines is likely to be inflated since companies often fail to cancel disused phone lines, the figures do show that Uganda is rapidly opening up to the consumption of mobile services.

A study by Pyramid Research projects that by 2014, 70% of Ugandans will have a mobile phone. So to date, the mobile market is growing quickly and still under-saturated. What, then, is barring new companies from making their entry?

One answer is that the companies that have tried so far have simply gotten it wrong, and the mistakes are most obvious in the marketing department: Scott Mackenzie, CEO of Simba Telecom, a leading airtime retailer across Kenya, Uganda, and Tanzania, holds up Orange's bumpy beginnings as an example.

Orange misread the Ugandan market upon entering it, he says: Their stores, with clean-cut European lines, failed to attract Ugandans comfortable with the purchase of airtime from familiar ramshackle corner shops. But their initial failure then aided their recovery: The low number of customers on their network allowed them to offer the fastest internet service, and they offered it at the lowest prices. And Orange have eventually also given their marketing a more local flavour, e.g. calling one of their offers 'Gyekiri', to match Warid's 'Pakalast.'

But it is not only the new kids who are getting it wrong. Mutala argues that Zain's services are consistently of a higher quality than competitor MTN's, and says that, originally, being a Celtel/Zain customer had a certain status: when the company first entered the market, it focused on high-income earners, and initially continued to charge more than its new rival MTN. “Zain is the company which is always almost getting there” he says. Mutala blames what he considers an inexplicable pricing structure and lacklustre advertising presence.

UTL, on the other hand, may be the cheapest, but their marketing strategy has been a flop: At this point, their presence in the mobile sphere is so weak that Mutala sees them as being almost totally propped up by the government's commitment to use their landline and internet services (as UTL is partly government-owned). Should the competition heat up, UTL would be the first to go. So far, MTN may be the only company getting it right. The question is: Are they getting it so right that they'll secure a Safaricom-style quasi-monopoly in Uganda?

MTN's brand strength and presence is indeed a formidable force in the market. Having taken away Celtel's lead not long after their arrival in Uganda, MTN seemed to have attained an almost unassailable position. Mutala says, “It's almost as if there is a market for MTN and a market for others.” Mackenzie asserts: “It's a foregone conclusion that if an MTN product is comparable, [the company's] brand strength will see them take over.” This, he says, is a risk that Orange is currently facing: the solid position the company has built for itself in the data service sphere might be imperilled by MTN's newly lowered prices.

Few prominent business people lack an MTN line, and the company's impressive distribution network crucially ensures that it has the lion's share of the non-urban customer base. Considering that in the period of January to March 2009, fewer than 20% of all text messages sent were off-net, their sizable share of the market will be difficult to whittle down due to the network effect. It is unsurprising, then, that Orange and Warid have been forced to offer deal after deal, giving away free minutes, in order to break into the MTN-dominated mobile sector. And with such deals, mobile companies make lower revenues. New subscribers are more price conscious and have lower incomes.

Unsurprisingly, the boom in mobile consumption has been the impact of competition on prices. In early 2009, for example, overall consumer prices rose by 6.8%, whereas the communication and transport sector were affected by a price increase of only 1.3% as a result of intensifying competition. Furthermore, dropping prices has led to a reduction in the average revenue per user (ARPU), which has encouraged telecommunications companies, including mobile companies, to spread their marketing campaigns outward towards untapped markets.

But near-unassailable does not mean completely impervious. Mutala considers that there are not only virgin territories open for new entrants to explore, but also that there are means to break, or at least loosen MTN's grip on its 60% of the existing market. Indeed, he thinks that one company is already in the process of doing so.

Warid, under Indian company Essar's ownership since late 2009, is slowly beginning to nibble into MTN's customer base, says Mutala. Since the UCC regulated that promotional deals could only last three months, and could not be run back-to-back, Warid's popular Pakalast has been available to customers as a profile on their phones: Pakalast offers the user unlimited free on-net calls for a full day after loading UGX1,000 in airtime – not ideal, perhaps, for day-to-day usage, but certainly a useful resource to have at one's disposal.

This plays to the growing number of individuals who have more than one phone, or at least more than one SIM card: Subscribers might use their MTN SIM card, on either per-second or per-minute billing, for normal usage, but switch to their Pakalast-enabled Warid SIM cards for longer conversations. Encouraging this trend, Warid was the first company in Uganda to sell dual-SIM phones, with Orange following this move. By taking on a secondary status to begin with, Mutala says, Warid are hoping to build up a loyal customer base of their own.

The invasion from the subcontinent does not end there: Earlier this year, Indian market leaders Bharti Airtel bought the Africa operations of Middle Eastern Zain, and Mutala is currently working with Indian telecoms giant Reliance on their planned entry into the Ugandan market, scheduled for mid-2011. This should have happened much earlier, but had been delayed by the impact of the global financial crisis that cut down the company's market value, and running two networks in India, a CDMA network and a GSM one, meant that the company had spread itself thinly.

In India, the telecoms market is driven by low prices and large subscriber numbers, with no one company holding such an outright majority of the market as MTN does in Uganda, or Safaricom in Kenya. “None of the companies in India even have a 20% market share” explains Mutala, and yet, within five years of launching, Reliance had 100m subscribers in its home country. Mutala predicts a race to lower prices similar to the one currently being run in Kenya.

The Indian companies are able to lower prices drastically as a result of their use of Chinese rather than European technology, which comes at a tenth of the cost. Bharti, already dealing with Chinese technology companies in India, are currently using Ericsson technology in Uganda, but have reportedly demanded that the Swedish firm offer them equipment at Chinese prices. MTN, on the other hand, use European equipment, and Mutula anticipates that they will find it more difficult to compete on prices.

Of course, Uganda's population, even if growing by around 3% a year, is estimated at 31m, dwarfed by India's nearly 1.2bn, so a market share of less than 20% of any potential Ugandan market is hardly comparable to the experiences of these companies in their home country. But Mutala argues that even a 10% share of the potential Ugandan market amounts to 3m subscribers, a good deal more than is currently held by any company but MTN, and enough to make a worthwhile profit.

Undercutting competition is one thing, but theorising about the potential market means tapping the unreached customer base. The Indian experience suggests that going rural is a worthwhile undertaking. As much as MTN has been more successful in reaching out to non-urban areas than its competitors and boasts successes in rural areas with its Village Phone – a phone equipped with a car battery and an endless antenna –, they have not taken the obvious step of installing mobile infrastructure in Uganda's hinterland. Here the Indian companies have the advantage of vast capital and a willingness to deploy it. The Ugandan mobile market has hardly been turned on its head since the UCC invited full competition in 2006, but the combined forces of Essar, Bharti and Reliance could shake the establishment up quite a bit.

Essar, both in Kenya and Uganda, have avoided taking on the well entrenched market leader directly, which has prevented the ruinous kind of battle that Zain has tried to fight. At least in Kenya, this has enabled Essar's Yu to overtake Telkom Orange in mobile subscriber numbers. New Zain owners Bharti have competed very aggressively on prices in Kenya, a do-or-die strategy to wrest market share from Safaricom, market leader with around 80% of the subscribers.

Jamie Anderson, a telecoms strategy advisor and business school lecturer, argued that most mobile companies in Africa had been lazy in that they focused on the urban consumers, and ignored the rural subscriber potential – a clientele that the new competitors from the subcontinent will certainly take into consideration, even if the Indian experience cannot necessarily be transferred directly: Finding the right technology and outsourcing partners is one challenge – India is known globally for its dynamic outsourcing industry. The other one is how to build a distribution network in sub-Saharan Africa's much lower population density.

Delivering the 2010 Oppenheimer Lecture, Rwandan President Paul Kagame tackled head-on the issues of Africa, leadership, genocide and nation building.

In this article we bring you excerpts from President Kagame’s speech, "The Challenges of Nation-Building in Africa".

"It is a great pleasure to be here at the International Institute for Strategic Studies, and an honour to speak on the "Challenges of Nation-building in Africa", with special focus on our country, Rwanda.

This is a topic that is pertinent to us in Africa, but it is equally important for developed countries since nation building is a continual process.

Let me start by expounding on what, in my view, constitutes nation-building in general, before I move on to discuss what nation-building has entailed in Africa and in our country.

Nation-building is a long and challenging political process, but one that leaders, together with the citizenry, must undertake with seriousness.

We must understand that most nations have their unique circumstances and each one, throughout history, has built and developed itself around certain distinguishing core features.

The first of these has always been the conscious cultivation of a national identity, the sense of belonging, based on shared values, tradition, history and aspirations. National identity is the foundation of social cohesion.

The second is the establishment of institutions and laws of governance which formalise the relationship between the leaders and citizens, and their expectation of service delivery.

The third feature is the participation of citizens in the governance process by choosing a system that serves them best, selecting their leaders and playing an active role in decision making.

Then there is economic transformation - it is only right for the people to expect a qualitative improvement in their lives. Part of nation-building, therefore, includes establishing the climate and mechanisms for economic development for the whole nation.

It is worth mentioning that the process of nation-building can only be internally generated and led; it cannot be achieved from the outside, however well meaning. This does not mean that we can't learn from outside or that we do not appreciate support for our initiatives.

For a country coming out of conflict, the first priority should be one of stabilisation and security, which requires strong internal political leadership, systems and institutions. In essence, this is a precondition for successful nation-building. There is need for restoration of order, peace and stability for the building to happen.

For over sixty years of post-colonial rule, nation-building in most African countries has been an up-hill task as a result of the disruption and fragmentation of our societies caused by our former colonialists. There is no doubt that colonialism created some conditions that made it difficult for newly independent African countries to function as proper nation states and the ramifications are still felt today.

However, this cannot absolve the failures and weaknesses of some postcolonial African leaders who have tended to indulge in a blame game that is not helpful.

The fact of the matter is that we cannot shy away from the heavy responsibility we bear of managing our own affairs, and leading our people.

Today, the Africans and African leaders are challenged to alleviate poverty and ignorance, and to bridge the technological gap necessary for sustainable development. Where this responsibility is not taken seriously, you see weak states and you see failure in nation-building.

I won't dwell much on the cold war and the competition for influence that engendered proxy wars, which caused instability and slowed the process of nation-building. They were instigated by the colonialists with the sole purpose of satisfying their interests.

I would now like to share with you our experience in Rwanda, which has had its share of challenges regarding nation-building. Our history in the thirty years following independence was marked by the near absence of characteristics of a functioning state, working in the interests of all its citizens.

From independence in 1962 up to 1994, Rwandan governments based their legitimacy on a fundamentally flawed premise of exclusion. These governments destroyed the identity and unity on which the Rwandan nation had been founded and exclusion became institutionalised.

The conditions of conflict and destruction were made possible by this type of leadership which championed division and sectarianism. Because of this fundamental deficiency, when faced with the challenges of legitimacy, this leadership fell back on the ideology they were familiar with - the so-called ethnic identities, which in effect fragmented Rwanda.

There were other attendant weaknesses. The politics of exclusion inevitably leads to loss of legitimacy, which meant that governance was exercised through coercion rather than consent. National resources were then diverted to keep this coercive machine in place, corruption was used to maintain a semblance of effectiveness, and the available resources were poured into the preferred regions of the leaders.

A preoccupation with remaining in power and meeting the demands of a sectarian constituency did not allow for the investment of meagre resources in education, technology and business that were needed for socio-economic transformation.

This state of affairs had two related consequences. First, the economy stagnated and levels of poverty remained high. Second, it led to heavy dependence on foreign aid that had devastating consequences on the development of the country. It led the people to believe that they could rely on perpetual handouts from donors for their livelihood and therefore need not work hard.

Most of the donor funds remained in the wrong hands and, to a great extent, served to entrench corrupt leadership. But equally, these funds gave donors undue political influence in our domestic affairs.

It is instructive that Rwanda's budget before 1994 was financed almost 100% by external funding. Today external support of the national budget is less than 50%.

The loss of legitimacy by post-colonial governments and the necessity to prop them up by undemocratic means had other consequences that militated against effective nation building. Leaders were not accountable to the citizens, but rather, to their foreign benefactors. It also led to increased repression and exclusion. The tragic consequence of all this was the genocide in 1994.

Informed by the failures of past governments, the government of Rwanda has since 1994 approached the challenges of nation-building in a different way.

We have adopted and implemented policies that foster national unity, promote reconciliation, peace and security and development. We have set out to build a nation of laws and institutions.

The first step was to correct a historical wrong and institute inclusive politics. The Rwandan people learned the hard way the danger of politics of exclusion where the winner takes all, and have opted for a model that builds on inclusive politics of power sharing and consensus building.

At our stage of development, we recognise the important role of the state in service delivery, and as an enabler of economic productivity. In order to make this effective, it was necessary to build strong institutions of governance at different levels of government, and at the same time decentralise authority and decision-making so that ordinary people's voices are heard, and so that decisions of government reflect their priorities, needs and input.

In dealing with some of the threats to the unity of our country, we realise that the most effective remedies come from our own historical experience. And so, when faced with a huge and divisive problem of millions of genocide suspects and an equally large number of genocide survivors living in the same country, and in many cases, the same neighbourhoods, we referred to our culture and came up with a workable solution.

We chose a multi-dimensional view of the problem - justice, reconciliation, healing and forgiveness - and sought a system that would enable us to move forward. Through Gacaca courts, Rwandans were able to administer a difficult but necessary restorative justice in spite of opposition from many quarters.

Another major objective of our government has been the socio-economic transformation of our country. African countries and Rwanda, in particular, recognise that we will develop if we enhance trade among African countries and beyond, and have free access to international markets, trading in high value products. It is imperative, therefore, to establish good relations among nations on the basis of mutual respect.

African governments should eventually aim to wean ourselves off aid as an important component of our development effort. This does not mean that we do not recognise the value of aid.

Rather, aid should be used to create conditions which will make it possible for us to live beyond it, because aid should not be an end in itself, nor is it a substitute for business, innovation and hard work. Aid that does not defeat poverty creates perpetual dependency, which in turn deprives Africans of dignity and self-esteem.

In conclusion, let me say that nation-building is like building a house. You start with the foundation before you build the structure. The foundation comprises security, peace, and stability. But let me also reiterate that, while acknowledging the value of external support and partnership, nation-building cannot be dictated from outside. It should reflect and be informed by the history and particular circumstances of a country.

And so, a nation that cannot find home-grown and innovative solutions from within itself to the numerous challenges of survival and growth is doomed to failure, no matter how much support it gets from external sources. It is with this in mind that Rwandans have sought to solve the numerous challenges we have met by drawing from our history, culture, and experience, as well as drawing support from others.

Credit: The International Institute for Strategic Studies www.iiss.org

The shift in focus by South Africa to building partnerships with emerging economic powers has the potential to transform trade with Africa, says John Battersby

As the shift in global economic power gains momentum, South Africa's trade is moving eastwards and southwards in what has become a clear pattern which both reflects the global trend and is helping drive it.

It is no coincidence that since the beginning of the year, South Africa's President Jacob Zuma has paid his first State visits to India, Russia and China and, in July. Brazil's President Luiz Inacio Lula da Silva paid his first State visit to South Africa following a working visit by President Zuma earlier in the year.

Earlier this year China officially became South Africa's largest two-way trading partner and, just before the State visit to China in August, China became the world's second largest economy after the United States.

On a visit to China earlier in the year, the South African Minister of International Relations and Co-operation, Maite Nkoana-Mashabane, let it be known that South Africa was actively lobbying China to become part of the global club of high-growth developing markets known as BRIC – Brazil, Russia, India and China.

While there is no timeframe for South Africa to become part of BRIC, the symbolism is clear and underscores South Africa's significance as a leader on the African continent and a solid bridge between the industrialised and developing worlds.

Even the notion that the much smaller South African economy could join four mega-economies in BRIC clearly reflects growing global investor interest in Africa - a continent which is increasingly seen as the last frontier of the global economy.

With a population approaching 1 billion, Africa represents the world's third largest market after China (1.3 billion) and India (1.1 billion) and is rich in largely unexploited mineral and natural resources as well as providing a key link in the chain of climate change.

Africa will need to be at the centre of any global trade-off between the industrialised and developing nations because it contributes least to climate change but stands to lose the most from its potentially devastating impact.

For the past decade or so, South Africa has been participating in regular bilateral meetings with India and Brazil in the IBSA grouping which reflects the key role of the three countries.

All three are leading members of the G20 global group of nations which best reflects the changing world order. The G20 has already partly superseded the G8 industrialised group of nations which is unable to solve the world's mounting problems of poverty, underdevelopment and climate change on its own.

While South Africa's foreign policy clearly is aimed at maintain its substantial trade and investment links with major established markets such as the United States, Japan and the European Union, the reality is that growth in these industrialised markets have been severely slowed by the global economic and financial crisis.

The current consensus on global economic growth puts the high-growth developing economies and the next tier of emerging markets – such as the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) – at the forefront of economic growth as a medium to long-term trend and forecasts sluggish growth in most of the developed economies.

While attending a UN conference on trade and investment in Beijing in mid-September, the South African Trade and Industry Minister Rob Davies said South Africa would prioritise China and India as export destinations of choice as these countries were now its biggest export markets.

This meant that South African companies would have to produce goods and services that would suit the needs of one of the world's most populous nations. He said that “sluggish growth” in the United States and the European Union, South Africa's traditional trading partners, was a factor which contributing towards the shift in the export market.

Two-way trade between China and SA last year reached R119.7 billion, surpassing the US as the country's largest trading partner, according to South Africa's Department of Trade and Industry. SA's exports to India last year reached R 5 billion, while imports totalled R2 billion, in favour of SA, the Department's trade statistics show.

The fundamental shift in South Africa's trading patterns was also clear from statements made by President Jacob Zuma during and after the State visit to China in August.

South Africa would look to China for investment in meeting its infrastructure projects including transport systems, freight transport, renewable energy projects and mining. The agricultural sector and car manufacturing are also potential recipients of Chinese investment.

In the past three years, while the pace of Chinese investment has been slow, it has been strategic and clearly paving the way for accelerated investment in the future.

In 2007 the Industrial and Commercial Bank of China (ICBC) bought a 20% stake in Standard Bank for R36 billion, making it China's largest foreign investment to date. In 2009, China announced that the African headquarters of the China-Africa Fund would be in Johannesburg.

China has more recently invested in a South African platinum mine and a cement factory and one of the most concrete agreements emerging from the State visit to China in August was the intention to build a high-speed rail link between Durban and Johannesburg.

But the most consistent message that President Zuma conveyed in the State visits to China and Russia was that South Africa wanted to learn from both countries on how to ensure high levels of beneficiation of South African mineral wealth to ensure that the country was able to speed up development, create more jobs and roll back poverty.

President Zuma also stressed that South Africa needs to balance its trade with China to reduce the heavy deficit in China's favour. He also foresaw co-operation between the two countries in reforming the global architecture and multilateral institutions.

The growing relationship with China is seen both as a means to boosting South Africa's global trade and of accelerating the development of the Africa continent.

China's most impressive achievement since President Deng Xiaoping began opening its economy in 1979 is that it has lifted 400 million people out of poverty by maintaining growth close to 10% for more than 25 years.

Prioritising the agricultural sector, developing its infrastructure and attracting high levels of foreign investment have been three crucial elements contributing to this astonishing achievement.

With its world-class financial sector, deep experience in African markets and an extensive corporate footprint on the African continent, South Africa is well-placed to lead an African miracle similar to China's achievement over the past 30 years.

By John Battersby

The vuvuzela has in the space of four weeks become the defining sound, shape and buzzword of Africa's first World Cup.

It is on everyone's lips - both literally and figuratively - and it will probably be listed in the Oxford English Dictionary in the near future.

Prince William, second in line to the British throne, has had a go at blowing one although, by his own admission, with limited success. And Boris Johnson, the Mayor of London, has blown a vuvuzela and thinks they're a hoot.

Like Marmite, people either love them or hate them.

But there came a point – round about the end of the first week of the World Cup – when everyone wanted one, wanted to blow one, wanted to hear one and wanted to get their tongues around that magic word V-u-v-u-z-e-l-a.

Sainsbury's ordered 70,000 from a supplier in China and they walked out the door.

A South African manufacturer who has teamed up with a German manufacturer to make three-piece vuvuzelas claims to have sold 500,000 of the instruments and achieved turnover exceeding R6 million.

The Sun newspaper has distributed tens of thousands as a promotional gimmick.

A British distributor who wanted to give South Africa the business found that his South African suppliers could not meet demand and he turned to the Chinese for a two-piece model with South African branding.

One Chinese manufacturer says they have sold a million vuvuzelas, that demand is now picking up sharply in China and that they are expecting an increase in global demand after the World Cup.

In his seminal best-seller – The Tipping Point – Malcolm Gladwell defines that magic moment when ideas, trends and social behaviours cross a threshold, tip and spread like wildfire.

That is exactly what happened with the vuvuzela by the end of the first week of the World Cup.

It was the first World Cup in which Twitter, the micro-blogging site, saw a massive proliferation in tweets as the teams went head-to-head. The site reached peaks of 3,000 tweets a second during the tournament and when goals were scored, according to an investigation by new media analyst Kerry Le Cordeur.

In the first week of the World Cup the vuvuzela was recorded by Twitter as a "trending" topic – a status indicating exceptionally high levels of interest which prompted the micro-blogging site to issue warnings to users.

Mobile technology saw an influx of i-phone and i-pad apps (software applications) and the most popular of all turned out to be the ability to access the b-flat parp of a vuvuzela directly from your i-phone.

Media commentators agreed that in a stadium the collective noise of the vuvuzelas fluctuated between the sound of a herd of elephants trumpeting and a large swarm of angry bees.

The broadcasters hated them but found a way of digitally tuning them out.

The players hated them because they could not hear each other or their coaches barking orders from the touchline. And FIFA officials hated them because they drowned out the fans and the singing that would have showcased South Africa's tradition of voice and music.

FIFA officials passed on pressure to ban the noisy instrument to the South African Local Organising Committee. LOC chief Danny Jordaan said that his committee was doing its best to control the use of the vuvuzela and it had been clearly established that it could not be played during national anthems.

Jordaan said further measures would be taken if it became necessary. But it soon became clear that any attempt to ban the vuvuzela would lead to a national uprising and rob the contest of its most tangible and audible African hallmark.

A compromise was then found to produce a vuvuzela which made less noise and posed less of a threat to one's hearing at close range. Instead of an ear-splitting 140 decibels they could come down to 115 or so.

But the controversy surrounding the vuvuzela just fed the frenzy. The tipping point was reached by the beginning of the second week of the World Cup and there was no turning-back.

To end the debate, FIFA President Sepp Blatter then came out in support of the vuvuzela. And so did Nobel Peace laureate Archbishop Desmond Tutu. That more or less ended the debate and the international media made sure they could pronounce the word on breakfast talk shows.

BBC Newsnight took the unusual step of ending its evening program by inviting a British musician who plays the trumpet to play the vuvuzela and see whether he could get some varied sounds out of it and even make some music.

The musician succeeded but presenter Jeremy Paxman stumbled on pronouncing the word vuvuzela, a slip that did not go unnoticed in the British media.

The fans visiting South Africa grew more and more intrigued and embraced the vuvuzela as a symbol of the exuberance of their South African hosts and used them as a way of identifying with South African soccer culture.

International television viewers – shielded from the full brunt of the noise by digitally doctored transmissions – also became fascinated with the vuvuzela. Children clamoured to own one.

Science journals carried long technical articles about the sound properties of the vuvuzela, why its base note was b-flat, why the sound was so irritating and why they could adversely affect your hearing if you got too close.

London firemen used them for a union protest to demand higher pay and better working conditions. South Africa and SA-linked companies in the UK wanted them to add colour – and noise – to their 2010 World Cup launch events.

Finance Ministers blew them at the G20 summit in Toronto. They were blown at a key baseball match in the United States between the Boston Red Sox and the Arizona Diamond Backs. In the UK, they were heard in the most unlikely places.

Executives in the City of London took part in a vuvuzela blowing competition from the Millennium Bridge in the heart of London organised jointly by the International Marketing Council of South Africa and High Timber restaurant, an upmarket South African restaurant on the banks of the Thames.

The IMC office in London, which distributed some 5000 SA-branded vuvuzelas in the run-up to the World Cup and during the first few weeks of the contest, was inundated with requests from companies in the UK and Europe which wanted to include a vuvuzela in client packs.

Charity events, England supporter farewell parties all wanted them. And of course they featured in large numbers at the opening game between South Africa and Mexico which was televised on a giant screen in Trafalgar Square on 11th June.

Although Freddie Maake, 55, a Kaizer Chiefs supporter from Soweto claims to have invented the vuvuzela when he put his lips to a horn on his bicycle and extracted an interesting sound 30 years ago, another South African, Neil van Schalkwyk, appears to have been the first to have patented it and started manufacturing for the mass market about ten years ago.

As is the case with the makarapa, the ingenious decorated soccer helmet made from a construction workers plastic hat, these South African inventions raise questions about copyright and patenting in a developing country where people are not always aware that their ingenuity needs to be protected.

Neither Alfred Baloyi, who invented the decorated helmets in 1979, nor Maake are ever likely to earn royalties or revenue from their ingenious inventions.

Vuvuzela, which follows the African tradition of blowing a hollowed kudu horn to summon people ahead of an important announcement, means welcome/unite/celebrate in Zulu.

Despite all the noise – and controversy surrounding it – that is exactly what the vuvuzela has done.

And it has left an indelible mark on the world.

John Battersby is the UK Country Manager of the International Marketing Council of South Africa.

From putting vuvuzelas on the map to transforming stereotypes, John Battersby examines the legacy of Africa’s first World Cup.

In the case of the first African World Cup, the real contest was never going to be won or lost on the playing field - as riveting as that spectacle was.

The stakes were always much higher for South Africa and Africa: it was about transforming ingrained stereotypes of Africa and Africans and radically changing the perceptions of a continent and its people and what they are capable of.

In one sense, it was a massive branding exercise and, in that sense, it has been a huge success.

It was South Africa's opportunity to prove the world wrong: Africans are capable of building world-class stadiums and infrastructure within set deadlines, within budget and in a secure and efficient environment. They are reliable partners.

It has turned out to be the biggest media event of all time, according to media analysts. Even bigger than the election and inauguration of President Barack Obama, the 2006 World Cup in Germany, the Beijing Olympics or the funerals of Princess Diana and Pope John Paul II - if the electronic and digital coverage is factored in.

Between 600 and 700 million television viewers watched the World Cup Final between Holland and Spain on the final Sunday.

It was the first World Cup in which Twitter, the micro-blogging site, saw a massive proliferation in tweets as the teams went head-to-head. The site reached peaks of 3,000 tweets a second during the tournament and when goals were scored, according to an investigation by new media analyst Kerry Le Cordeur.

The much loved - and hated - vuvuzela was a trending topic on Twitter and the micro-blogging site had to issue warnings due to the exceptionally high volumes of traffic. Mobile technology saw an influx of i-phone and i-pad apps and the most popular of all turned out to be the ability to access the b-flat parp of a vuvuzela directly from your i-phone.

These outcomes alone were worth every cent of the £2.8 billion (R40 billion) that South Africa spent on the stadiums and infrastructure directly related to the World Cup (R30 billion by the national government and £900,000 or R10 billion by the host city municipalities).

The impact on national pride and identity – and the social cohesion that goes with it – is difficult to measure in monetary terms. But there is clearly a link with the two most important challenges facing the country: improving public services delivery and creating jobs.

"South Africa has always viewed the hosting of the World Cup, not as an end in itself, but as a catalyst for development whose benefits would be felt long after the referee blows the whistle marking the end of the last game," noted South African Finance Minister Pravin Gordhan.

The ten world-class stadiums created 66,000 jobs earning £700,000 (R7.4 billion) in wages, 40,000 new police officers were trained, one brand new airport and two totally transformed airports were created, national roads were overhauled and there was massive upgrading of stadium precincts.

But the most abiding legacy of the World Cup is what it has done to boost the spirit and pride of Africans and the bonding that it has fostered between South Africans and other African nations.

The way South Africans of all races led Africa in rallying behind the Ghana team in its crucial match against Uruguay will not be forgotten.

"For the first time ever in the 16 years of freedom and democracy, we see black and white South Africans celebrating together in the stadiums and fan parks," said President Jacob Zuma in a candid endorsement of a seminal moment in the country's history.

But all these benefits of the World Cup will fade unless the country - strengthened by the enhancement of pride and unity flowing from hosting the contest - is able to follow up on key challenges which could unravel the legacy as time passes, and life in South Africa returns to an unacceptable normal.

The counter-narrative to the successful hosting for the World Cup - and one which critics of the event quite legitimately dwell on - is whether it was justified for a country with such high levels of unemployment (25%), and such a legacy of poverty and underdevelopment, could afford to spend such huge amounts on delivering the first African World Cup.

It is argued that of the £3.8 billion (R40 billion) spent on the World Cup (direct and infrastructure), only £11.5 billion (R13 billion) will be recouped through tourist revenue.

But the long-term benefits for growth in tourism and investment could dwarf the R40 billion within a couple of years.

These figures also need to be put in perspective against the £125 billion (R1.4 trillion) budgeted and spent on infrastructure between 2007 and 2013. (£54 billion (R561-bn) spent and £82 billion (R846 billion) to be spent in the next three years.)

The real test of South Africa's hosting of the 2010 World Cup will be whether it can be translated into gains for the country's global competitiveness and its quest for attracting more foreign direct investment and tourism to the country. That, in turn, will mean more jobs.

Can the success of South Africa's hosting of the 2010 World Cup be used to kick-start a massive improvement in the current levels of public service delivery in the country? Can it lead to the proliferation of public-private partnerships? Can it lead to better skills training? Will it require the importation of large numbers of skills in the short-term to make it happen?

To sustain the gains, South Africa will need to transcend its internal divisions; radically overhaul public service delivery; consolidate the sea-change in the mindset of South Africans; and act in a more inclusive and connected way in dealing with Africa and the developing world in general.

But it has also created the opportunity to do something which could dramatically consolidate the spirit of the World Cup and turn a new page in its development.

There needs to be a concerted post-World Cup project which has the same focus, commitment to meeting deadlines and delivery schedules as the 2010 World Cup itself.

South Africans have always rallied and risen to heights around tangible projects: getting rid of apartheid, rallying together after the release of Nelson Mandela in 1990, voting in the first democracy elections in 1994, the World Cup Rugby in 1995, and now the World Cup in 2010.

The next project should be one of real reconciliation and engagement and moving forward together.

Images: Chris Kirchhoff, MediaClubSouthAfrica.com and Volkswagen South Africa

With the eyes of the world focused on South Africa, a recent visit to London by the ANC Secretary-General, Gwede Mantashe, offered some insights into the issues currently facing the country's ruling party and South Africa's place on the world stage.

Formed in January 1912 by a coalition of chiefs, representatives of people's and church organisations, and other prominent individuals gathered in Bloemfontein, the African National Congress is nearly 100 years old. The ANC was created with the aim of bringing all Africans together as one people to defend their rights and freedoms. Mass support in its defiance of the apartheid regime propelled the ANC into the vanguard of the South African liberation movement, with many of its leaders such as Nelson Mandela imprisoned as terrorists.

As the ruling party in South Africa since the democratic elections of 2004, and with a focus on national and racial reconciliation, the ANC continues to face the challenges involved in transitioning from a party of liberation to one of government. Although it has managed to retain the vast majority of seats in South Africa's parliament, the ANC has seen threats to its authority from a vocal opposition, breakaway groups and even from within its own internal structures.

During a recent visit to London, the Secretary-General of the organisation, former miner Gwede Mantashe, spoke candidly about the organisation's challenges and successes and the future of South Africa after the World Cup.

With a mandate to deliver a better standard of living for the poor, the ANC's success is tied to South Africa's success and the need for the world to appreciate and support the strides made by the country since 1994 is key for Mantashe.

"You have a responsibility to buy into our country and to invest in our country," he said. "South Africa is stable country, both economically and politically."

"We've gone through a global economic crisis not of our own making," he said, as, along with other developing countries, South Africa was caught up in the consequences. Despite a crisis which, he said, was a function of greed where people blew the bubble up to the point of bursting, "what is important to us is that South Africa has acquitted itself well in this process and is an economy you can have confidence in."

During his visit to London, Mantashe answered both critics and supporters, outlining South Africa's economic challenges and ongoing areas of focus.

"We were in a recession for three quarters but South Africa has now registered positive growth in the past two quarters, registering 4.6% growth in the last quarter – quite extraordinary for a small economy."

Mantashe's journey to the top echelons of ANC power reflects the self-belief and determination seen in South Africa's own transition.

Born in rural Transkei, Mantashe's political activist life started in the Student Christian Movement where, from the early 1970's, he chaired its Western Transkei structures. In 1982 while working as a miner, he joined the National Union of Mineworkers, rising to Regional Secretary for the Union in 1985. From 1988 he served as the Union's National Organiser, becoming General Secretary in 1998.

In 2007, a year after stepping down from this post, he was elected Chairperson of the South African Communist Party and, in December 2007, Secretary-General of the African National Congress.

Gwede Mantashe holds the record of being the first trade unionist to be appointed to the board of directors of a JSE listed company, Samancor.

The South African strategy of applying what Mantashe calls ‘a counter-cyclical solution' i.e. a government-led economic recovery, is what he credits with the country's economic survival and positive prospects.

"We are quite optimistic about the future," he said. "Revised forecasts now point to 3% overall growth. If we can do that in this year, that will be extraordinary for South Africa."

Acknowledging that the country's trade deficits continue to decline, Mantashe pointed out that this reflects a reduction of imports as well as of exports. Inflation targets have edged closer to government targets and South Africa, he says, is "a story that we can sell to anyone."

"At macroeconomic policy level, we have done well as a country. But we still have to deal with the challenges of high unemployment, inequality and poverty," he said.

South Africa's focus remains on road and rail infrastructure and on maintaining momentum following record levels of investment leading up to the World Cup.

South Africa is currently only marginally a food exporter and the agro-processing sector is an area of focus for the ANC and one which they believe can be considerably improved with further investment.

With more than half the country's mining output exported as raw materials, beneficiation opportunities are available to investors, as are further opportunities within the knowledge industry and renewable energy sector.

When asked about his position on moving away from coal, Mantashe replied: "I am a coal miner and I don't think coal mines must be closed." Nevertheless, there is a huge demand for energy in South Africa, he said, and investing in the green economy and alternative sources of energy – South Africa is more 90% dependent on coal energy – is vital to the country creating the right energy mix.

South Africa has long championed regional integration and this, said Mantashe, will enable more effective trade and an improved market of consumers, pointing out how access to a large market gave China a huge advantage in its own development.

Since the elections earlier in 2010, the ANC has faced vocal criticism from opposition parties, parts of the South African media and some former members, notably the breakaway political party, Congress of the People (COPE). The ANC still remains at the forefront of South African politics and Mantashe made no apology for any perception that the ANC is too strong.

"It is better to have a strong political party than a weak political party," he said. "This means our processes and decision making are faster. The ANC can adapt and preserve. It remains relevant because it is always a step ahead."

The party has also had to deal with challenges from some of its own structures, most particularly from the ANC Youth League and its leader, Julius Malema.

Despite being sanctioned recently by his party, Malema's pronouncements continue to cause confusion about the ANC's intentions, creating unease in certain sections of the investor community.

Mantashe addressed head-on the question of nationalising mines – a Malema inspired controversy – by pointing out that nationalisation is not ANC policy and that Malema "is a young man elected by a rowdy conference that produced a rowdy leader."

Mantashe explained at length the process by which ANC policy is made, dismissing suggestions that policy can in any way be made off the hoof and outside these strictures.

"Policies in the ANC go through a rigorous process," he said. Such debate, he added, merely serves to highlight that diversity is welcome and that the country can take it – "South Africa is stable and democratic."

The ANC Secretary-General's visit came in the week preceding the start of the World Cup and he took the opportunity to point out that South Africa has invested enormous energy, time and resources into the event.

"There will be glitches but it will be the best run World Cup ever," he promised. The tournament - the first ever on African soil – is, he said, a celebration.

"It is more important than the football. It is a celebration of our freedom. From being kicked out of FIFA in 1976, we are now hosting it."

The party and the country now have to build on this achievement and work towards creating the kind of society the ANC was set up to do. South Africa's strengthened relations with other emerging economies, particularly China, will help to propel the country forward in the coming years.

Noting the changing realities of global politics, Mantashe sounded a warning to South Africa's traditional allies who are slow to engage in a new form of partnership.

"If there is complacency in Europe," he said, "China will fill the vacuum in Africa."

Image: Sapa

By John Battersby

An extraordinary thing happened recently in the iconic chamber of London's cavernous Royal Albert Hall.

With 21 days to go before South Africa hosted the FIFA 2010 World Cup, eight South African stand-up comedians representing a kaleidoscope of the country's racial diversity kept an overwhelmingly South African audience of more than 3,000 doubled up with laughter for three side-splitting hours.

The show, called Bafunny Bafunny - which is a word-play on the national soccer team Bafana Bafana (the boys) – was an irreverent attempt to build national enthusiasm for the world's largest sporting event among South Africa's largest expatriate community – sometimes referred to as the tenth province of South Africa.

It was catharsis of the kind that has been kindled – and could be fast-forwarded – by the national convergence and unity of purpose thrust on South Africans by hosting the world's largest and most diverse sporting event.

"The hosting of the 2010 World Cup will change the way the world sees South Africa and the African continent forever," says President Jacob Zuma who kicked a mean soccer ball while serving time for resistance to apartheid on South Africa's notorious Alcatraz-like Robben Island prison.

Just as the 2006 World Cup had Germans smiling, drinking beer and waving the national flag en masse for the first time in 60 years, so the first African World Cup in South Africa could have an equally dramatic effect on promoting social cohesion in a country with a legacy of deep racial inequality.

Inside the hall there were two gigantic South African flags on either side of the massive organ and nothing to remind one that you were sitting in the heart of London's prime venue.

The crowd, a tiny fraction of the estimated 600,000 South Africans in the UK, was mobilised by word-of-mouth and without a single advertisement in mainstream media.

Trevor Noah, Nick Rabinowitz, Loyiso Gola, Mark Lottering, John Vlismas, Kagiso Ledega, Mark Banks and Barry Hilton took the gloves off with slick, witty and hugely varied performances.

Their repartee - peppered with four-letter words – slaughtered a series of favourite targets: FIFA, the fiery ANC youth leader Julius Malema, the police shoot-first policy, violent crime and the biggest and most sensitive no-go area of all: race.

The targeting of Malema was a moment of truth for the young democracy.

After a protracted and heated public debate in April and May, the top disciplinary committee of the ruling African National Congress sanctioned Malema, inter alia, for singing an old liberation song which calls on its cadres to "kill a Boer" after it had been ruled to constitute hate speech by the courts.

Boer was the label used to define conservative Afrikaans-speaking South Africans as the enemy during the apartheid era. The ANC has lodged an appeal against the ruling.

At the height of the row, a half-forgotten extreme right-wing Boer leader, Eugene Terreblanche whose name means "white earth" in the language of his French ancestors, was murdered by two black farm workers. The stark reality of the here and now confronted the young democracy.

How do you justify a song coveted by one group of South Africans when it calls for the killing of members of another? Do you laugh or cry?

At the Royal Albert Hall on 20th May the only tears to be found were those generated by excessive laughter.

For three hours, a diverse audience of South Africans laughed at themselves, at each other and with each other at things that many could not talk about outside the comfort zone of their racial or cultural groups even a few years ago.

In recent months, South Africans of all races have been donning Bafana shirts on Fridays, flying the national flag from their car windows, wrapping their rear-view mirrors in socks sporting the national flag and chanting slogans about Africa's time has come and: "It's here. Can you feel it?" There is a rare inclusive outpouring of patriotic fervour.

As the row about the noisy but uniquely African trumpet – known as a vuvuzela (Zulu for noise) - is debated on breakfast television shows at home and abroad, South Africans are undergoing a seismic shift in terms of social cohesion and identity which is set to be galvanised by hosting the 2010 World Cup.

White South Africans, in the past wedded to rugby while soccer was and remains an overwhelmingly black sport, are starting to take ownership of the national team and willing it to victory despite its low international ranking.

As the finishing touches are given to five awesome new stadiums, three transformed airports and a range of new transport and access routes, the level of national excitement is palpable.

Estimates of foreign arrivals have come down significantly since the build-up began which will mean that far more South Africans will get a seat at the stadiums.

And there is a healthy ongoing debate about whether the large numbers of poor and unemployed South Africans will benefit from the expenditure of some $5-bn on stadiums and related infrastructure.

The physical benefits for the country's economic infrastructure are there for all to see. But the most enduring benefactor of the World Cup will be the national psyche and the quest for a common national identity to transcend a deeply divided past.

As former President Thabo Mbeki said when he spoke at the handing over ceremony in Berlin in 2006, the German World Cup succeeded in restoring some of Germany's self-respect after its legacy of national socialism.

"We are confident that the 2010 soccer World Cup will do the same to consolidate our self-respect and dignity gained when we attained our freedom and democracy in 1994 and, in a unique way, also help our own nation and the continent of Africa," Mbeki said.

Bafana Captain Aaron Mokoena, even before the World Cup began, has taken the lead in ensuring that the legacy of the 2010 World Cup will benefit future generations of soccer players.

A year ago he launched the Aaron Mokoena Foundation which will ensure that those who were denied an opportunity in the past will benefit from the coaching and mentoring services the Foundation will provide; initially in the sprawling townships south of Johannesburg, including his home town of Boipatong in Sedibeng.

"The future of the country is in the hands of the youth," said Mokoena. "I want to make a contribution to ensure that they have the opportunity to reach for the stars."

An initiative such as John Perlman's Dreamfields project is ensuring that thousands of would-be soccer players are getting access to kit and playing fields, often in the most remote rural reaches of the country.

Local Organising committing CEO, Danny Jordaan, who has become synonymous with the World Cup, sees the staging of the event as a culmination of the anti-apartheid struggle which so effectively used sport to defeat apartheid.

In 1995 former President Nelson Mandela used the rugby World Cup as a means of galvanising conservative white support for the country's first black majority government. The story has been movingly told in the book Invictus by John Carlin and the film of the same name starring Morgan Freeman and Matt Damon.

Mandela was also instrumental in securing the FIFA World Cup for South Africa.

"Reconciliation is an important aim of the World Cup." Jordaan told the Independent on Sunday. "We want to make this country better and more united and I think we will achieve that."

"It will chart a new course in our country's history," he said.

In a candid interview, the Mauritian High Commissioner to the UK explains his country's success in riding the global economic storm and decries the story of Britain's occupation and the forceful evictions of Mauritians of Chagossian descent from Mauritian territory.

Abhimanu Mahendra Kundasamy is passionate about Africa. Currently the High Commissioner to the United Kingdom, Mahen Kundasamy has held the position of High Commissioner to no less than ten Southern African countries, having been accredited to the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) secretariats as well as the UN regional office in Nairobi.

ReConnect Africa spoke to this charismatic ambassador to find out more about his role and to assess the part Mauritius is playing in Africa's growth and development.

ReConnect Africa (RCA): What do you consider to be the key challenges of your role as the representative of Mauritius to the United Kingdom?

Mahen Kundasamy (MK): My key challenge at the moment centres on a dispute that we have with the UK Government concerning two issues: resolving the issue of sovereignty; and the resettlement of the islands of the Chagos archipelago.

These issues have arisen due to the unilateral intention of the UK Foreign Office to impose a Marine Protection Area (MPA) around the Chagos archipelago without addressing the issue of sovereignty and resettlement. The issue of sovereignty is clear because not only do we have the two key UN resolutions -1514 and 2066 – to support our sovereignty, but there is also the fact that the majority of the UN membership recognises our title to these islands.

Indeed under 1514 Paragraph 5 clearly states that the transfer of powers to the peoples of those territories which have not yet attained independence should be affected "without any conditions or reservations".

Paragraph 6 of the same Resolution very explicitly lays down that "any attempt aimed at partial or total disruption of the national unity and the territorial integrity of a country is incompatible with the purposes and principles of the Charter of United Nations."

Declaration 1514 is not only a resolution about the granting of independence to colonial countries and peoples but it is an affirmation of fundamental rights and a pillar in the UN Charter. And, on this, at no time has the UK as a Permanent member of the Security Council given their views on what they think of this key principle of the UN Charter.

As has been pointed out by the former retired British High Commissioner to Mauritius David Snoxell in a recent interview and I quote:

"There are two important acts from the 19th century that are relevant here – the 1865 Colonial Laws Validity Act and the 1895 Colonial Boundaries Act. These effectively gave the British government the power to administer its colonies, to set the boundaries, and divide them up as it saw fit. All of this comes before the development of international law in the twentieth century. While the British government has been one of the great drafters of international law – maritime law, human rights law, law of armed conflict and so on – it tends to be selective about the international law that it applies to itself. And Chagos is a case in point."

Based on the UN resolutions, the African Union has its own position and has issued a resolution on this issue. In this, they urged the UK Government "to immediately enter into direct and constructive dialogue with Mauritius so as to enable the early return of the sovereignty of Mauritius." We are currently exchanging notes with various capitals in Africa and many African countries are monitoring this situation closely.

The second part of this sad story is the forcible eviction of some 2,000 islanders from these islands. In fact, the Washington Post in an Editorial in September 1975 described these forcible evictions as "an act of mass kidnapping".

Whilst they were being evicted, which was inhuman and traumatic to the men, women and children, they watched their livestock and pets being massacred as they were being forced into the ships to cleanse the area.

Indeed, in records we have been made aware of, a senior official of the UK Foreign Office in 1966 noted that "We must surely be very tough about this. The object of the exercise is to get some rocks will remain ours. There will be no indigenous population except seagulls." The mindset of this group was such that a senior diplomat wrote, "Unfortunately along with the birds go some few Tarzans or Man Fridays whose origins are obscure and who are hopefully being wished on to Mauritius."

We have been trying to convince the UK Foreign Office that the only thing they will achieve by the unilateral imposition of an MPA around the Chagos archipelago is an immoral, inhuman and illegal act to prevent people from enjoying a fundamental human right as well as to continue the occupation of a land which, in respect to the UN resolutions and international law, is not theirs.

Indeed senior judges in their ruling such as Mr Justice Ousely in 2003 and Lord Justice Sedley in 2007 were both explicit about this. In fact, all the judgements in the courts have said that what happened to the Chagossians was disgraceful—the terms used included "abuse of power", "deplorable", "repugnant" and "shameful".

The way forward is now clear and it is high time that the British government together with Mauritius, the United States and Chagossian leaders sort out this relic of the Cold War and indeed one of the worst violations of human rights perpetrated by the UK in the 20th century.

In a recent interview on the BBC, the Foreign Secretary David Milliband said, and I quote: "that within the Foreign Office there is a danger of faded glory and we have worked very hard not to fall into this trap. We must not behave like our predecessors 50 or 100 years ago."

RCA: How has Mauritius been able to not only survive the recent global economic downturn, but also see economic growth?

MK: The process of Mauritius addressing the global recession started in 2005 when Prime Minister Navinchandra Ramgoolam came back to power. He immediately recognised the economic clouds facing the Mauritian economy and realised that it was vital for him and his team to take bold and courageous decisions to address these difficulties.

The island's key challenges at that time were the reduction in the price of sugar by 36% by the European Union and, at the same time, the total removal of a multi-fibre agreement for Mauritian textile exports to the EU. Along with the rising cost of food and oil, the island was hit hard with what we call this triple shock effect.

Mauritius therefore embarked upon a long list of simultaneous reforms. Reform was based on the notion of further opening up the economy in order to attract foreign direct investment. This also included the reform of the tax system, the development of new poles of economic sectors, and the consolidation and rationalisation of the existing economic sectors.

Although we didn't know there would be a global crisis of such magnitude then, these steps prepared us to face the economic meltdown that ensued around the world, such that even during the worst of the recession, our economy grew by 3%.

RCA: How would you assess the key challenges within Mauritius if this growth and development is to be sustained?

MK:What is important is that we continue to further diversity our economic base. One of the things that are vital to sustain this is the speed of economic integration in Africa.

As a member of the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), the pace of economic integration is vitally important for our future.

My hope is that, in twenty years, we will have a comprehensive workable customs union right across sub-Saharan Africa which will offer a market size of well over 500 million people.

RCA: With increasing South-South co-operation between the emerging BRIC economies and Africa, how do you think Mauritius can position itself?

MK:I think we are already there, to the extent that both India and China see Mauritius as a gateway to Africa. Indeed, this is a good thing for us to look not just north to Europe, but also east and west. These are emerging economies which will have a huge impact on the global economy in the future. In terms of consumption, it will not only be the West, but countries in South America with large economies, like Brazil, as well as India, China and Indonesia.

South-South cooperation plays a vital part for Africa in diversifying its future markets for economic growth.

RCA: In common with other island states, Mauritius has a small population – 1.2 million. What disadvantages does this pose, given the country's aspiration to 'punch above its weight'?.

MK: In the early 1960's, two Nobel Prize winners studied Mauritius and concluded that Mauritius was doomed to failure because of its rising population and mono-crop economy of sugar.

We have not only proved them wrong but also managed to show resilience, determination and the capacity to adapt and work hard to move the country forward. Today Mauritius is unrecognisable from the 1960's and our size is not, and will never be, an impediment tothe way that Mauritians think. Even though we are a small island, we think global.

We will always be exposed to the world and, in the end, it is the people who have made and who will continue to make it a success.

Angola Registers Greatest Growth in Sub-Sahara Africa

At 16%, Angola achieved the strongest economic growth in Sub-Saharan Africa, states a report by the International Monetary Fund. According to the IMF document which examines the economic outlook for Africa both this year and next, Sub-Saharan Africa will record growth of 4.6% in 2005, coming in below the 2004 figure of 5.3%.

Uganda - Investing in the Pearl of Africa

Located at the heart of Sub-Saharan Africa and with a commanding base for regional trade and investment, Uganda, described by Winston Churchill as the ‘Pearl of Africa’, is positioned to become one of the most attractive business locations in eastern and southern Africa.  Political and economic reforms have galvanised the country’s economy in recent years, while extensive privatisation has underscored the private sector as the primary agent in the country’s recovery process.

A key weapon in Uganda’s battle to encourage private investment, both foreign and domestic, is the Uganda Investment Authority.  Set up in 1991, the UIA is the statutory agency responsible for promoting and facilitating investments in Uganda.

Interim Developments spoke to Dr. Maggie Kigozi, Executive Director of the UIA in Kampala, about the challenges and successes of attracting investment into Uganda

ID:  What are the key ways in which the UIA works to fulfil its mission?

MK: Our mission at the UIA is to make a significant and measurable contribution to Uganda’s economic development by stimulating private sector investment, promoting exports, and creating sustainable employment in all regions in Uganda. To fulfil this, five years ago we shifted our focus from general investment services to proactive, targeted promotion and specialized client facilitation and aftercare. This has been possible with the multidisciplinary team of staff that I have.

Our key roles in the development of the private sector are investment promotion, investment facilitation and aftercare, policy advocacy, and information dissemination. We have committed ourselves to the UIA Client Charter, which helps us to promote good practice and accountability to both the potential and existing investor. We have also encouraged the line agencies we work with to facilitate the investor, to draw up ‘Client Charters’ and commit to them. To this end we are developing a ‘Team Uganda’ concept that enables us to have liaison officials in the relevant institutions charged especially with investment related issues.

ID: The Government has stressed its determination to support the development of a thriving private sector. How is UIA supporting the implementation of this policy?

MK: A thriving private sector will achieve Uganda’s economic growth and development plan, to increase value added exports, create employment, bring in capital, and attract technology.

To implement this plan, the UIA has established a public service network of District Investment Promotion Officers to ensure regional balanced growth and proper exploitation of our natural resources spread all over the country, a good number of private sector alliances; for instance Women Entrepreneurs Network, and Uganda Desk which has facilitated a series of business programmes designed to strengthen and support Uganda’s base of domestic investors. UIA, as an organisation between the government and private sector, has promoted private/public sector dialogue. The private sector takes an active role in policymaking on issues that affect the business environment.

Currently, the UIA is Secretariat to the World Bank funded Presidential Investor Round Table (PIRT), an initiative of our President, HE YK Museveni. The initiative is anticipated to enable government to set in place relevant interventions with the guidance of both local and foreign investors.

ID: Industry needs a skilled workforce in order to maximize productivity and create wealth. How is Uganda – and the UIA – responding to the challenge of building capacity and developing appropriate human resources strategies for the country?

MK: For starters, Uganda is implementing the policy of Universal Primary Education in a bid to eradicate illiteracy. Our literacy rate is now 68%. At the national level the education curriculum is constantly undergoing development to come up with one geared towards job creation and not job seeking, which has been the case and the cause of unemployment. The ‘white collar jobs’ are not enough and cannot effectively be used to generate increased production from our resources. In addition to these efforts is the soon coming implementation of a national ICT policy. These strategies should equip Uganda’s human resources with competitive capacity to engage in business nationally, regionally and globally.

At the UIA, we identified, among others, Education and ICT as sectors where Uganda had the comparative advantage within the region to become a hub of excellence. To this end, we have prioritized the promotion of investment opportunities in these sectors to attract investment in order to increase access to capacity building. Under the PIRT, there is a sub committee on Education and ICT that is working out relevant strategies that will further develop Uganda’s workforce. Our ‘Uganda desk’ at the UIA has also been instrumental in initiating various practical and cost effective programmes to support and increase the capabilities of local entrepreneurs in sectors where Ugandans can be competitive.

ID: What are the key sectors leading Uganda’s economic recovery and what are the safeguards for investment from within the country, the Ugandan Diaspora and foreign investors?

MK: The key sectors leading Uganda’s economic recovery are mainly the service sectors like Health, Education, Tourism, Telecommunications, and Finance. The other sectors that have been doing well are Agro processing, specifically coffee, beverages, and tobacco. Mining, ICT and Energy are also among the leading attractive areas for investment.

Uganda’s economic recovery began in the 1990s. These were the fruits of economic reforms like the privatization of state enterprises.  Our privatization policy has seen government pull out of business, leaving the ground fair for private sector players. Nevertheless, currently, government is looking at ways of intervention in selected key sectors to enhance capacity. Access to finance is one of the key challenges of the private sector in Uganda. This is will be solved shortly since our financial services sector is growing.

Uganda’s liberal economic policy also left forex controls to market forces. As for capital, you can bring it in and take it out as you please. Our experience shows that when investors are making money and are assured of protection of their investment, they do not leave – they reinvest their profits to make more.

Testimony to this is the presence and operations of Coca Cola and Stanbic Bank. Also present in Uganda are Shell, Standard Chartered, Nokia, Microsoft, Total, Pepsi, KPMG, Dunavant, Lafarge, and TATA. I might have left out a few.

“Ugandans in the Diaspora in the financial year 2003/04 contributed about five hundred and fifty million US dollars!”

We have continued to improve as an attractive location for investment, also because of a stable political environment, a sound legal and regulatory environment, and the protection of investment. Uganda is signatory to the main international investment related institutions like MIGA and OPIC, among others. Uganda has sound macroeconomic policies that have reduced the inflation rate to single digits for the last nine years. Interest rates have, over the years dropped from 40% to 25%, and are still going down, indicating a continuous improvement in the business environment.

I want investors, whether Ugandan leaving in Uganda or abroad, or  foreign, to know that investment in Uganda is safe and viable. Ugandans in the Diaspora have gained trust in the business environment and in the financial year 2003/04, they contributed about five hundred and fifty million US dollars! We need more investment to take advantage of the new opportunities that have been created by the recent East African trade agreement.

Branding South Africa - The role of the IMC

South Africa has taken the lead in tackling negative perceptions about Africa with a strong branding campaign targeted both internally and externally.  The International Marketing Council (IMC) of South Africa has the primary role of encouraging business and investment in South Africa by helping to project a positive and dynamic image of the country and by providing reliable and accurate information about the country and its people, infrastructure, incentives and business environment.

We speak to John Battersby, UK Country Manager of the IMC about their branding campaign for South Africa.

ID:  What are the key challenges you face in respect of the developed world's perception of investing in Africa, in general, and in South Africa, in particular?

JB: The key challenges faced in relation to potential investment in Africa is the phenomenon of Afro-pessimism which is based on stereotypes and pre-conceived notions of Africa as a continent plagued by military coups, ethnic conflict, famine, disease and under-development. The Afro-pessimists can't see beyond the continent's challenges and tend to dismiss the revival structures and efforts as "too little, too late". Potential investors also have genuine fears about infrastructure, capacity, economic transparency and political governance, delivery, reliability, currency and regulatory restrictions on trade and investment.

We also receive enquiries about exchange controls, labour laws, black economic empowerment and how it impacts on investors and whether there are time limits on BEE and limits on the desired percentage of black ownership in empowerment deals.

ID:  Branding Africa positively is a challenge that cuts right across the continent.  What are some of the approaches that you have adopted in the IMC to successfully brand South Africa?

JB:  The IMC took the approach of developing a comprehensive national brand which rolls together all South Africa's unique and leading qualities: the diversity of its people, the dynamic and visceral nature of its cultures, the warmth and generosity of spirit of its peoples, the physical beauty, the nature of the historic compromise to democracy, the ability to negotiate over problems with inclusivity as the guiding principle, the ability to solve problems etc. These qualities are reflected in the IMC's pay-off line: South Africa, Alive with Possibility and in the Tourism Brand: Making the Impossible, Possible, or Trade and Investment South Africa's: Business Unlimited.

The first step in promoting the brand was to get buy-in from SA stakeholders. IMC CEO Yvonne Johnston has personally briefed some 15,000 SA businesses, government and other bodies on the brand.

The IMC has also developed two major video/DVD presentations on the brand and has played a central role in promoting the brand through partnering with like-minded organisations such as "The Good News" books, Proudly South African, Trade and Industry South Africa (Tisa) and SA Tourism. It also plays a pro-active role in promoting positive news about South Africa and the brand by highlighting the achievements in its IMC website and the www.southafrica.info website which is now the major portal into the country and scored more than a million hits for the first time this week.

ID:  Attracting inward investment is one thing, managing investments to provide a return is another.  What are some of the initiatives that are being taken up to ensure that South Africa has the necessary, skills, technology and know-how to really deliver what investors are looking for?
           
JB:  Training and skills are a major pre-occupation of both government and the private sector, which contributes 1% of profits in the form of a special training levy to further training. The Government, through the Department of Labour, has a comprehensive scheme to advance the training of employees. The government's program of broad-based black economic empowerment has also identified training as one of the key criteria for assessing a company's transformation or empowerment scorecard as well as equity, black directors, black managers, procurement policies and employee share participation schemes. The system of sectoral charters - social contracts between government and various sectors of the economy to achieve BEE goals - also place major emphasis on training, skills, technology and know-how. The national and provincial education departments also have a policy of actively promoting science and mathematics as school subjects and government is looking at upgrading science and technology facilities at schools. 

There is still a shortage of skills in the economy and government is looking at various means of speeding up skills training as well as hiring non-resident South Africans and foreigners in areas where training will take some time. Concerns around BEE are addressed by underscoring the message that the country's long-term economic and political stability rely on an equitable distribution of the country's economic wealth and power and ensuring that all South Africans have a stake in the economy, however small. The message is bolstered by buy-in from South African business executives and the knock-on effect this has with potential foreign investors.

ID:  Can you explain some of the key elements of the IMC’s role in branding South Africa?

JB: A key component of that image is South Africa as a leading African nation and one that is actively trying to promote the concept of an African economic, social and political revival through the African Union (AU), the New Partnership for Africa's Development (Nepad) and the AU's African Peer Review Mechanism (APRM).

SA is also promoted as a springboard for trade and investment with Africa. The image is addressed in many different ways including interaction with the media, above and below-the-line marketing campaigns such as the branded taxis and supporting corporate sponsorship of SA-centric events and promoting joint branding events.

We also build South Africa's image by promoting its role as the leading investor in Africa, partnering with SA Tourism to highlight the country's potential as a leading tourist destination for Africa and the world.  We also continually highlight the country's achievements at international sporting and cultural fora such as the Olympics, World Cup soccer etc.

The IMC also has a media nerve centre in Pretoria, known as the Communications Resource Centre, from where it monitors domestic and global media coverage of South Africa and makes appropriate interventions to support the brand. Internationally, SA cities and provinces twin with counterparts abroad as part of a mutual promotion campaign. (e.g. London and Johannesburg)

ID:  How do you at the IMC address the issue of the risks that are commonly associated with dealing with Africa - whether economic, reputational, political, etc.?

JB: The IMC deals with the risks associated with Africa by stressing the great strides that have been made in recent years under Nepad and the AU with respect to conflict resolution, economic transparency, political governance, trade reforms etc. Nepad provides the basis for a development partnership between Africa and the industrialised countries. South African President Thabo Mbeki and his government devote much of their time and resources to conflict resolution and laying the foundation for accelerated development in Africa.

ID: How do you gauge the success of the IMC in its role of bringing positive representation of South Africa both within Africa and externally?

JB: It is not easy to gauge the success of the IMC other than through anecdotal evidence and, ultimately, through increased trade and tourism and, in particular, foreign direct investment. The best evidence that the IMC has made an impact is evident in the increased mood of optimism and pride which has made its presence tangible in the year of the country's 10th anniversary of democracy, its third democratic elections and its triumph in being awarded the 2010 soccer world cup. Feedback from the IMC and www.southafrica.info websites also indicate that the IMC and related bodies involved in promoting the country's image have made great strides both domestically and internationally.

ID:  What are some of the lessons that other African countries can learn from the work and experience of the IMC of South Africa?

JB: Other African countries can learn from the example of the IMC and South Africa because it is not easy to focus on what appears like a luxury - marketing and branding - when you are dealing with the basics of survival, under-development and conflict resolution, as is the lot of many African countries.

Hopefully, the South African example will illustrate the medium and long-term benefits that flow from a comprehensive approach to - and sustained implementation of - a country branding exercise such as the one followed by the IMC. It should also be pointed out that despite South Africa's economic and infrastructural head-start on many African countries; it has a lot to learn from the rest of Africa in relation to values and social issues which have been severely disrupted by the apartheid experience.

10 Years On - Achievements and Challenges for South Africa

Archbishop Desmond Tutu launches UK celebrations for South Africa

On Sunday 25th April, the gilded domes of St Paul’s Cathedral, London, witnessed an unprecedented display of African drumming, singing and ululating as a service of thanksgiving was held to celebrate the 10th anniversary of freedom and democracy in South Africa and to launch a week of festivities.

The Cathedral was packed with a crowd made up of South Africans living in the UK, diplomats, British dignitaries, clergy, representatives of civil society and other friends of South Africa.  As the service commenced, the South African High Commissioner to the UK, H.E. Ms. Lindiwe Mabuza, joined the Dean of St. Paul’s and other leading clergy in a solemn procession down the aisle.

Delivering the sermon was the most Reverend Desmond Tutu, Archbishop Emeritus of Cape Town, who spoke of the contrast between the past South Africa and the present South Africa, ten years after the end of apartheid.  In a sermon that blended the solemnity of the occasion with his unique brand of humour, the Archbishop highlighted the needs of present day South Africa. 

Citing the problems of poverty and unemployment as well as the scourge of HIV and AIDS, he made a powerful plea to those present to continue to support South Africa through its present day challenges.

“The struggle is not over,” he said, “and this period is perhaps the hardest. South Africa needs your support… will you give it?”

STRATE takes to the Road to market South Africa

The message that South Africa is open for global business was clearly demonstrated by STRATE – South Africa’s authorized Central Securities Depository – during its recent international road show to London and Boston.

A project of the Johannesburg Stock Exchange (JSE) and incorporated in 1998, STRATE was set up to address the deficiencies of the JSE’s paper-based settlement system.

In 2003 STRATE Ltd merged with UNExcor and CD Ltd. The merged entity carries out the clearing, settlement and depository functions of all trades on the JSE and the Bond Exchange in South Africa. The settlement of Money Market instruments is in the process of being implemented.  STRATE provides an efficient settlement system for South Africa’s financial market trading, enabling South Africa to compete effectively with other international markets.  The company is now also a provider of a growing number of products, data and registrar type services to listed companies and has made a determined effort to align its practices to international standards and to bring continuous improvements to its systems.

The establishment of this first class institution has led to a marked increase in market activity in the country.  By reducing settlement and operational risk which has led, in turn, to lower costs and increased efficiency, the company has helped to improve the international perception of the South African market.  Owned by a consortium made up of the Johannesburg Stock Exchange and the four major South African banks, STRATE has taken huge strides forward under the leadership of Chief Executive Officer, Monica Singer.

Monica Singer, CEO, STRATE

Originally from Uruguay and now a South African citizen, Singer has been a qualified Chartered Accountant since 1988 and was previously Director of Accounting at SAICA, the South African Accounting professional body, where she was responsible for research of accounting standards. 

The STRATE road show was an opportunity for Singer, the 2002 finalist in the South African Business Woman of the Year Award, to demonstrate the recent advances that have been taking place in South Africa and to share the good news about continued growth within its economy.

STRATE London Road Show

The first of the road shows took place in London and featured a presentation from Paris-based Victor Lopes of Societe General, one of the STRATE Central Securities Depository Participants.  Lopes, the Bank’s Emerging Countries Economist, delivered a comprehensive overview of South Africa’s successful transition from apartheid to democracy, culminating in 2005 when South Africa saw a growth rate of 4.9%, its highest growth rate since 1984.   Growth in the country has been driven largely by consumer demand and consumption and has been further boosted by a rise in real income and house prices.  Lopes acknowledged the high potential for further capital inflows into South Africa, particularly for equity inflows but also for Foreign Direct Investment given the growth prospects in the years to come and the confidence on economic management. Sounding a note of caution, Lopes pointed out that, “Nevertheless, we should keep in mind that the same structural issues of skills shortage, labor market rigidity and HIV/AIDS, that could constrain a higher GDP growth in the medium term, could also potentially affect FDI if they are not addressed.”

Investment was highlighted as a major driver of growth, with a number of major infrastructure projects in the pipeline.  Foreign direct investment in South Africa in 2005 amounted to an impressive $6.8 billion, with a significant proportion coming from Barclays Bank’s acquisition of ABSA Bank.  Lopes stressed that while the South African government has made great progress in stabilising the economy and reducing the country’s vulnerability to external shocks by diversifying, the key risks to the country were largely seen as external rather than domestic.  The broad based Black Economic Empowerment legislation has, in Lopes’s view, enabled the emergence of a Black middle class, an outcome that he described as “a positive step for growth and political stability”

The Largest Economy in Africa

“South Africa has the stability of a developed nation with the opportunity of an emerging market”, was Monica Singer’s unequivocally upbeat assessment of the state of her nation.  In her presentation, the CEO of STRATE rapidly outlined a range of key indicators. 

As the largest economy in Africa, South Africa has the biggest rail service in Africa with a total of 10 major airports which have doubled their traffic in the past decade.  The country produces more than 80,000 graduates each year and has 14 world-class universities.   In the last ten years, over 1,200 clinics have been built and over 500 houses are built every day, while access to clean running water has increased from 59% of the population in 1994 to 92% in 2005. Taxes have been reduced, tariffs lowered, fiscal deficit brought under control, and exchange controls relaxed. The past seven years have seen the Reserve Bank’s net foreign exchange reserves grow by US$40 billion and the debt – to – GDP ratio has decreased from 10% in 1994 to 1% last year.  The South African rand was the world’s strongest performing currency between 2002 and 2004 and, today, business confidence is at a 23 year high.  In her view, the recent award of ‘Best African Country of the Future’ by a pan-African investment magazine demonstrated that this was not simply a partisan view.

“We offer a favourable legal and business environment in South Africa,” Singer said.  “Our banking industry is rated among the top 10 in the world and we have a strong financial market and banking regulated framework.  Our transport system is modern and we have a very sophisticated telecoms facility.”

Of South Africa’s role in the region, Singer highlighted the fact that the country accounts for 42% of Africa’s GDP and has been a key player in the development of Nepad.  Citing the Economist Intelligence Unit’s ranking of the country as highly cost-effective, she underscored the ease of doing business in the country and the appetite for inward investment.

Supporting Investment

The role that STRATE plays in supporting investment is one that Singer takes seriously.  Since the inception of STRATE, there has not been a single failed trade and the South African Stock Exchange is now ranked as the 18th largest stock exchange in the world and, in terms of market capital, is among the top five emerging markets exchanges. 

Her vision for the company is one of commitment to creating value for their shareholders.  “We are committed to be the trusted and preferred centralised provider of products and services”, she stated.  Despite the fact that the company is always looking at innovations and added value products, their core business will always take priority, she added.  “STRATE’s core business is to provide clearing, settlement and depository services for securities, providing stakeholders with end-to-end pragmatic, reliable, innovative solutions that facilitate the management of risk and the realisation of value.”

The second STRATE road show will take place in Boston on 13 June 2006.  (www.strate.co.za)

Moving Mauritius Forward

With a population of approximately 1.2 million, Mauritius ‘the Star and Key of the Indian Ocean’ is a stable African democracy that has successfully achieved a literacy rate of 82.9% among its citizens. 

In this exclusive interview, ReConnect Africa speaks to H.E. Abhimanu Kundasamy, High Commissioner for Mauritius to the United Kingdom, and asks how Mauritius is tackling the challenges of global trade and promoting investment.

RCA: Your Excellency, Mauritius has been able to maintain a stable democracy with regular elections and a positive human rights record. What lessons can your country offer to the rest of Africa?

AK: Indeed democratic principles, respect for human rights, civil liberties, respect for the rule of law, free and fair elections are all well entrenched in our constitution. We not only believe in these sacrosanct values but also respect them both in letter and spirit. On our independence in 1968, inspired by many great statesmen of his time, the first Prime Minister of Mauritius and the father of our nation Sir Seewoosagur Ramgoolam embraced democracy as the way of governance. Let me take you to what Robert Rotberg, President of the World Peace Foundation and Director of the Program on Intrastate Conflict at Harvard University's JFK School of Government had to say about Mauritius and the strategic choices that the father of the nation made at the time of our independence. “When Sir Seewoosagur took the Mauritian prime ministerial reins in 1968 immediately after independence in 1968, he understood that the island’s mélange of colours and peoples…could not long survive in peace if he and others were anything but transparently democratic. He stressed open politics, nurtured social capital, welcomed a free press, and strengthened the rule of law inherited from Britain, and earlier from France”.

In the case of Mauritius, with a vibrant democracy, the respect for human rights and the rule of law, came social and political stability. The latter were the prime factors that contributed to our economic development over all these years. A peaceful, politically stable country is more likely to attract foreign direct investment. Such a country will offer better prospects for economic growth and development. Democratic principles, respect for human rights and the rule of law also bring along the notions of accountability, good governance and sound social policies.  

When it comes to democracy in Africa, I am convinced that, with the exception of a few, most countries have now embraced democratic values compared to what the situation was two decades ago. Today, we have fewer autocratic or kleptocratic regimes operating in Africa and I must say that this augurs very well for the continent.

I must also add that Mauritius was recently elected to the United Nations Human Rights Council with 178 votes and this in itself speaks volume of our visibility, commitment and contribution in advancing the cause of human rights.

RCA: Mauritius has attracted considerable foreign investment and has one of Africa’s highest per capita incomes. What will be the key challenges for the country to keep the economy growing?
 
AK: Today, in this increasingly globalised world where new trade rules are shaping the global economic agenda, it is obvious that for a country like Mauritius there will be some key challenges ahead in order to keep our economy growing.

“Government is committed to make the country as much investor-friendly as possible. There are a host of measures that are in place to encourage foreign investors”.

Presently, Mauritius is facing several adversities and the vulnerability of a small economy like Mauritius is becoming more and more evident at a time when the concept of trade preferences is taking a back seat. Mauritius is facing a drastic cut in sugar prices due to the reform of the EU sugar regime, our textile products are subject to immense competition and the economic problem is further compounded by the high price of petroleum products. Against this backdrop, it is important that we take the right policy decisions in order to build greater economic resilience and sustain economic growth.

Hence, we need to further diversify our economy and stimulate employment creation, facilitate investment, make our products more competitive on the international market, ensure that our sugar industry is more competitive and remains a cost effective supplier to the EU market and also cut down on public expenditure. And this is what precisely the Government of Mauritius is committed to do and is doing.

RCA: In common with the rest of the continent, enterprise development is a key issue for Mauritius. What strategies are being adopted to encourage business development, particularly SME businesses? 

AK: As our Deputy Prime Minister and Minister of Finance Hon R. Sithanen has mentioned, SMEs have a fundamental role in our vision of making Mauritius a dynamic and entrepreneurial economy. What the Government wants is the emergence of an entrepreneurial nation that will fully participate in the mainstream economic activities. Last year Government announced a number of measures to encourage SMEs. These new measures will give SMEs a new impetus. Some of the measures are:

• consultancy services to be provided to SMEs for them to look into the possibility of upgrading and making their products more competitive
• lowering of the cost of finance to micro-enterprises and SMEs
• setting up an Empowerment Fund to support SMEs.  The Fund to be used to advance both debt and equity finance to SMEs on flexible terms, with the added services of mentoring and close follow up of their projects.
• better physical infrastructure for SMEs hence the construction of industrial estates for SMEs.

RCA: Which sectors offer future growth in Mauritius and what procedures are in place to encourage investors into the country?

AK: Government has charted out a road map for strengthening our economic base while exploring new areas of economic activity. We believe that Mauritius has the potential to develop a vibrant seafood industry and already this year, Mauritius hosted an international Seafood Conference which saw the participation of major foreign operators from that sector.

We want our tourism industry to become one of the main engines of economic growth in both the short and medium terms and we are targeting around 1.5 million tourists in the next few years. We are also diversifying the products that the tourism industry can offer. The ICT sector is very promising and already there are measures put in place to make this an important pillar of our economy. Mauritius is also aiming at making the country a major Centre of Excellence.

Government is committed to make the country as investor-friendly as possible. There are a host of measures that are in place to encourage foreign investors. Let me name a few. We are tackling the problem of red tape which chokes investment and frustrates investors. The Prime Minister is personally chairing a Fast Track Committee to coordinate and speed up decisions on major investments.

The Tanzania Trade Centre speaks to ReConnect Africa on investment opportunities through Tourism

Based in the heart of London, the Tanzania Trade Centre plays a strategic role in promoting Tanzania as a tourist and investment destination. The Centre is the trade gateway to Tanzania, acting as an agency for the Tanzanian government’s efforts to boost inward investment.

Thomas Sembeye, the Centre’s Information and Communications Manager, plays a key role in fulfilling this mission. Speaking to ReConnect Africa, Sembeye outlined the Centre’s focus.

“If you have ideas for investment in Tanzania, we guide you to the proper channels and help you achieve your targets and goals as early as possible”, he explains. “We can help you register a business and establish which licences are needed for Tanzania, depending on which sector your want to invest in. We can also advise on visa and work permit issues.”

Tourism for Investment

The Director of the Trade Centre, Mr. Yusuf Kashangwa, is a passionate proponent of his country. “Tanzania is a great country and it is our job to communicate this,” he says. “We provide information on how to settle in Tanzania and establish business links with the country.”

Tanzania has the biggest land area among the East African countries with a spectacular landscape of three regions; the Islands and the coastal plains to the east; the inland saucer-shaped plateau; and the highlands. The Great Rift Valley that runs from north east of Africa through central Tanzania is another landmark that adds to the scenic view of the country. The country has the largest concentration of wild animals and is home to world famous National Parks and Game Reserves. It also has sandy beaches and Africa’s highest and snow-capped mountain, Mt. Kilimanjaro.

Tourism is increasingly significant to the Tanzanian economy. The country is seen as safe and politically stable and has seen an influx of tourists from Europe, the US and Scandinavia.

“Tourism is our number one foreign exchange earner,” says Kashangwa. “Tanzania is a huge country. It is not just Zanzibar and Kilimanjaro - the rest of the country has a lot of attractions.”

The sheer size of the country means that it is able to offer an abundance of natural resources and tourist attractions. “We have everything in one place”, says Kashangwa. “800 km of coastline with pristine sands and crystal clear water. If you are fond of mountains; we have lots. If you want wildlife, we have millions – Serengeti and three fresh water lakes. And we have our own tanzanite, a gemstone exclusive to Tanzania.”

As a source of employment and foreign exchange as well as a stepping stone to investment, tourism has become a vital part of Tanzania’s investment strategy.

“One of our key goals is to promote tourism for Tanzania and act as the Tanzanian Tourist Board” says Thomas Sembeye. “In this capacity, we provide information and brochures on tourism and exhibit in tourism exhibitions.”

“Tourism helps also to highlight investment opportunities and a number of people who visit as tourists then come to us to discuss investing e.g. building hotels, camps and we work with them to help them implement their ideas.”

Tanzanite Account

In common with many African countries, Tanzania has seen its share of skilled professionals leave the country in recent decades. With particularly significant losses from the health and education sectors, key skills needed for the country’s development have moved to neighbouring countries and further afield, impacting severely on already limited resources in these sectors.

The Government today is encouraging people to return and to contribute their efforts to developing the country. By improving the working environment in the public and private sector and increasing salaries across some of the key areas - doctors were recently given a pay rise – the government hopes to attract some of its lost skills back into the country.

Other sectors are adopting new approaches to harnessing the benefits available from migrating Tanzanians. Three years ago, the Tanzanian CRDB Bank launched a special Tanzanite account for non resident Tanzanians. The Tanzanite account is a savings account designated for Tanzanians who, while abroad, are able to save a portion of their income to meet local family obligations or for investment purposes.

The account can be opened and operated in the major foreign currencies and earns interest above the standard rate applied to domestic savings accounts. The Tanzanite account offers a secure way for Tanzanians abroad to save money at home, benefit from increased interest rates and know that their savings are contributing to national development. Deposits made in hard currency deposits can also be withdrawn in hard currency, eliminating the risk of loss on currency exchange.

Sectors for Investment

The United Republic of Tanzania was formed in 1964 out of the union of two sovereign states, Tanganyika and Zanzibar. The Government of Tanzania is a unitary republic consisting of the Union Government and the Zanzibar Revolutionary Government. With 34 million people, Tanzania has a diverse culture of more than 120 tribes, each with its own vernacular, but it is a country where people live harmoniously. Swahili is the lingua franca and English is the official business language.

Dar es Salaam, the country’s commercial capital and major sea port for mainland Tanzania also serves the neighbouring land-locked countries of Malawi, Zambia, Burundi, Rwanda, and Uganda, as well as Eastern DRC. Its geographical location gives Dar es Salaam Port the advantage as a gateway into East and Central Africa, making Tanzania as a strategic destination for investors.

Since its independence, Tanzania has successfully held general elections and the current President, Jakaya Mrisho Kikwete took office in 2005. The country has enjoyed political stability and the Tanzanian Government has declared its commitment to sound, consistent and predictable macro-economic policies, promoting good governance and private sector development.

While there are investment opportunities in almost every area, tourism and mining stand out as prime sectors. Agriculture, a key part of the Tanzanian economy, also offers opportunities for investment. To support the country’s efforts to promote agricultural private investment based on an improved regulatory and policy environment, the World Bank has recently approved a $90 million agricultural credit facility. This will also enable farmers to have better access to and use of agricultural knowledge, technologies, marketing systems and infrastructure, all of which contribute to higher productivity, profitability, and farm incomes.

Tanzania’s tax system is designed to give incentives, such as tax holidays, to new investors coming into the country. The Trade Centre has managed to bring a significant number of investors into Tanzania since they were set up under the Tanzania High Commission.

“I do encourage people to come and visit us,” says Sembeye. “However small their enquiry, we can start from somewhere and go anywhere. Any ideas about investing in Tanzania are welcome.”

For further enquiries about Tanzania: www.tanzatrade.co.uk

Rising to the Challenge

Ghana signs up for the Millennium Challenge Account

“We have been given a clean bill of health” said President John Kufuor, addressing a gathering of media and Ghanaian Diaspora in London, following the signing of the Millennium Challenge Compact in Washington.

Welcoming the delegation of Ghanaians to his London office, the newly accredited High Commissioner to the United Kingdom, H.E. Mr. Annan Cato described the meeting called by the President as “an opportunity to give a briefing on the significance of the Millennium Challenge Account (MCA) and what it will mean to our nation.” 

Describing the Millennium Challenge Compact (MCC) as further proof of Ghana’s international recognition, the High Commissioner assured the gathering that “we have every reason to be encouraged and we will welcome whatever assistance you can give to this effort”.

Millennium Challenge Account

In 2002 American President George W. Bush called for what he termed “a new compact for global development, defined by new accountability for both rich and poor nations alike.”  Arguing that “greater contributions from developed nations must be linked to greater responsibility from developing nations”, the American President pledged to lead by example and stated that the USA would increase its core development assistance by 50% over the next three years to result in an annual increase of $5 billion by 2006.  These funds were to be channelled into a new Millennium Challenge Account which would be devoted to “projects in nations that govern justly, invest in their people and encourage economic freedom.”

Outlining the process by which Ghana has received this record sum, the Minister of Information and National Orientation, Hon. Kwamena Bartels, who had accompanied the President to Washington, said, “This new compact is intended to lead to three major results: improvement in institutional infrastructure, in physical infrastructure such as roads and telecommunications and in the living standards of the people.”

He defined the 3 policy criteria of the Millennium Challenge Account; governing justly, investing in people and promoting economic freedom, and the 16 indicators against which each country was measured, indicators which are broadly similar to Ghana’s own development priorities. 

Ghana’s application was followed by a due diligence process with a MCA team visiting the country to evaluate the consultative process that had been undertaken as well as the governance of the funds and the planned evaluation and monitoring procedures.  Approval by the US Congress paved the way to the subsequent historic signing of the Compact.  

Ghana Poverty Reduction Strategy

In 2005 President Kufuor launched the Ghana Growth and Poverty Reduction Strategy.  The Strategy identified three priorities areas; human resources development, private sector development and enhanced good governance. 

The funds from the MCC - $547 million - will be disbursed according to criteria that relate to Ghana’s Strategy and which, according to the Government, will give “a rapid and significant return on investment and which are consistent with the Government’s priorities.” The MCC’s investment will build upon and complement the work of other donors

The five-year MCC aims to reduce poverty by raising farmer incomes through private sector-led agribusiness production.  23 regions, mostly in Ghana’s Volta Basin, have been selected.  The majority of the funds, $241 million, will be spent on modernising agriculture, while transportation, rural development, social services and access to market will be allocated a total of $244 million.  The balance of the fund has been allocated to administration and to ensure adequate monitoring and evaluation procedures are implemented.  

Significance and Impact

Agriculture forms the backbone of Ghana’s economy and accounts for around 40% of the country’s GDP.  The sector employs almost 70% of the country’s labour force and produces more than half of the country’s foreign exchange earnings.

The MCC programme will consist of three projects; Agriculture, Transportation and Rural Services.  The Agriculture project will include farmer and enterprise training in commercial agriculture, irrigation development, land tenure facilitation and improvement of credit services for on-farm and value chain investments.  Under this project, approximately 51,000 farm households are expected to receive training in agronomic and business skills.

The Transportation Project will address upgrades to sections of the country’s National Highway and improvements to trunk roads and the Lake Volta ferry services.  The Rural Services project aims to strengthen public sector procurement capacity and provide support for community services and rural financial services.

The impact of the MCA funds will lead to the creation of 700,000 jobs, with an estimated 1.3 million more jobs created indirectly.  According to the President, the improved practices will make savings that will impact positively on the environment. 

“We want to use the fund to diversify agriculture and increase production of crops like pineapples, shea nut, cashews and cereals such as maize,” he said. 

A New Work Ethic

In his address, the President offered an upbeat assessment of Ghana’s economic success story.  The economy has moved in a positive direction with Ghana achieving 5.8% growth in 2005, he said. 

“In 2006 the country is already achieving over 6% growth with analysts predicting 8% growth as a prerequisite for achieving middle income status,” he added.  “The only stumbling block is the current oil crisis and that, we hope, will be overcome.”

The President spoke of his desire to create a new work ethic in Ghana, pointing out that currently the country is suffering from an under-capacity to exploit opportunities such as the African Growth and Opportunity Act (AGOA).  A key requirement for Ghana is the country’s ability to add value to crops produced in the country.  This, according to the President, is an opportunity that will be supported by the MCA funds.

The President emphasised the role of the private sector in Ghana’s ability to achieve its targets for economic success.  “If we are going to move into a modern economy, it is important to rehabilitate the private sector,” he said, adding that “for the first time in Ghana’s history, we created a Ministry for Private Sector Development.”

Management and Accountability of the Challenge Fund

The Government of Ghana has created the Millennium Development Authority (MiDA) to be accountable for the implementation of the projects under the MCC.  MiDA will be governed by a Board of Directors including Government, the private sector and the NGO community. 

During the question and answer session that followed his speech, the President was pressed about how the Government would ensure that the funds would be managed prudently and that these substantial new financial resources would not be committing Ghana to other areas of alliance with the USA.

The President expressed his confidence in the provisions set out for MiDA, describing a management team as one that would be both competent and “would share the vision that enabled us to get this money.”

Ghana has been the recipient of numerous grants and other forms of financial assistance.  When asked why the Millennium Challenge Account is so different, the President was unequivocal in his response.

“The volume of money involved is US$547 million,” he said.  “Since independence, Ghana has never received anything like this.  It is not a loan, it is a grant.  We stated our priorities and said that if the USA wanted to support us, this is what we wanted to do.” 

The Role of the Ghanaian Diaspora

“You have a role to play”, said the President, addressing the group of UK resident Ghanaians.  He spoke of the Ghanaian Diaspora’s “enhanced work ethic” and invited them to offer suggestions and ideas to help the Government in its efforts to be accountable and transparent.  “I would rather we acquire the work ethic and discipline of the West that you are used to.”

President Kufuor spoke of the importance of remittances sent by Ghanaians in the Diaspora to Ghana’s economy.  In 2001 Ghanaians resident outside the country sent back US$400 through the banks, he said.

“In 2005, this had risen to over $4 billion.  In the first quarter of 2006 alone, the figure topped $2 billion and, according to the Central Bank, the indications are that around $8 billion will be remitted by the end of 2006.”

While the bulk of these funds have been targeted at building houses, he urged Ghanaians to “let us use some of the money you bring back to build the economy”.

“Everybody wants to know about us”

Speaking of the MCC, President Kufuor said.  “This has given Ghana a clean bill of health. Now everybody wants to know about us.  The MCA has shown the world that Ghana is a place to come and do business.”

The Millennium Challenge Account will enable Ghana to adopt an integrated and focused programme that targets agriculture and will help to encourage educated young people back to develop the rural areas of the country.

“I believe this should be a turning point for Ghana to transform agriculture,” said the President.  “And, as the most important sector in the country, this will also transform Ghana.”

Photographs:  Peska, London

Kenya’s Flower

Industry adds a bloom to the country’s earnings

For Africans in Europe looking for a little bit of home, buying a bunch of roses may bring you closer than you think.

According to the Kenya Flower Council, about one out of every three bunches of cut flowers we buy will have come from Kenya.  By 2004, about 31% of the flowers required in Europe were provided by approximately 50,000 Kenyans directly employed by the industry in diverse areas such as tendering the flower from seed to bloom, trucking, packaging, administration, training and sales, to receptionists, cooks, supervisors and managers. In addition, there are more than a million other people engaged in other auxiliary services through trade, rentals, packaging material, cargo handling, transport, communications, security, banking, private and public regulatory services.  

Kenya’s 2nd Foreign Exchange Earner

The horticulture sector is Kenya’s number two foreign exchange earner after tea, bringing in $400m p.a. A substantial amount of this money is directed to ensuring sustenance of the livelihood of all those who are engaged by the industry in one way or another, while a considerable amount goes into the Government revenue.
       
The industry has seen a remarkable pattern of growth; in 1995, Kenya’s cut flower exports totaled US$60.7 million.  By 2004, sales had increased to US$253 million.  Roses are easily the most popular cut flower export.  In 1999, the country exported nearly 27 million kilograms of roses.  By 2003, exports had almost doubled to 45.6 kilograms.  Other favourites include carnations, alstromeria and summer flowers. 65% of the business goes to Holland, the flower auctions and for export across Europe. 23% goes to the United Kingdom – most of it to leading supermarkets – while business with Germany, currently at 7% of the total, is growing.

Kenya is the largest supplier of flowers to the EU representing 25% of their imports (75% of the flowers exported are roses) and has an export value of approximately Ksh18.7 billion. Being rural based, the flower industry is an effective conduit for wealth creation and distribution. The Kenya Flower Council, a voluntary association of independent growers and exporters, states that contrary to some schools of thought, flowers do not compete for land with food production as they only occupy 0.1% of the arable land. This is partly because roses, which comprise 60% of the national flower production, are grown in green houses where productivity is closely monitored for optimal yields under controlled environments.  Because of the need to continually monitor efficiency on expensive inputs in the form of chemicals, fertilizers and  water, there is a growing shift towards soil-less production or hydroponics, which allows for recycle of all the inputs. This is desirable from a cost of production point of view but also from an environment protection and conservation standpoint. 

The Council is confident that more families continue to benefit from the industry in one way or another. About 80% of the workers in the industry are non-skilled and approximately 60% of these are women. Most of these women would have found it difficult to find jobs elsewhere due to their limited education, having dropped out of school for various reasons, but mainly because where family resources are scarce, education for the girl child is often sacrificed in favour of the wellbeing of the family.

Working Conditions and the Environment

}The flower industry has drawn sharp criticism from environmental and other groups, leading to continuous efforts to improve working conditions and any harmful environmental impact caused.  As the umbrella organisation of flower growers, the Kenya Flower Council (KFC), has drawn up a strict code of practice for its members which stipulates, among other things, protective clothing for workers, safe pesticides and careful use of water. 

The KFC's vision is "to be a recognised world leader in the safe and responsible production of floricultural produce.”   Its members account for around 70% of Kenya’s exports of cut flowers.

With its trained auditors the Council ensures that each farm is visited at least once every six months. International accreditation is assured through the involvement of Bureau Veritas, which independently audits Kenya Flower Council activities. Only certified member farms (Gold and Silver) are allowed to display the KFC “environmentally friendly” logo on their produce and marketing materials as a clear signal to buyers of the commitment and standards achieved by the farms involved in this voluntary initiative.

Employment Opportunities

This emphasis on good practice is itself a boon to the economy as the flower industry also attracts additional investments through the non-governmental organizations and unions who provide a useful service as a watchdog over the industry. 

Employing approximately 100,000 people directly and 1,500,000 indirectly, the sector has grown through the efforts of the private sector with support but little interference from government of Kenya. The industry has been largely self-regulated against market requirements, international labels and additional compliance to Kenya’s national statutes. Horticulture is rurally based and contributes substantially to poverty alleviation in the countryside, offering - together with textiles and tourism - the best opportunity for growth and job creation.

World-Class Standards

The Kenya Flower Council’s Code of Practice has been accredited to EurepGAP, the agreed standards and procedures for the development of good agricultural practice as drawn up by leading retailers belonging to the Euro-Retailer Produce Working Group, a first for the industry and for Kenya.

According to Steve Homer, EurepGAP Ornamentals Technical Standards Committee Chairman, “The Kenya Flower Council is the first national growers’ association to achieve benchmark status with the EurepGAP ornamentals’ scheme and, in doing so, underwrites its position as a genuine world-class standard and dynamic industry association.”

Achieving the EurepGAP benchmark means that Kenya growers can achieve EurepGAP certification and recognition by their global customers but retain ownership and management of their own national scheme without duplication of activity.

For further information, contact Sally Peters, Kenya Flower Council,E-mail: sally@raittorr.co.uk

South Africa has been a stable, constitutional and multi-party democracy since 1994.  Its peaceful political transition after decades of instability, economic decline and apartheid has been a remarkable success.

Overview

Population:    46.9 million

Currency:       South African Rand

Capitals:   Cape Town (legislative), Pretoria (administrative)                      Bloemfontein (judicial)

Total GDP:     R.1,560 billion

GDP
per Capita:    R.33,253

Exports:        Gold, minerals, diamonds, metals, foods, pulp and                          paper

The South African Government, dominated by the African National Congress (ANC) enjoys a high level of legitimacy. President Thabo Mbeki took succeeded Nelson Mandela as President of the Republic of South Africa in 1999 and was re-elected for a second 5-year term in April 2004, when the ANC achieved two-thirds majorities in the parliamentary and provincial elections.

Economics

South Africa has the continent’s largest economy.  Within the parameters of responsible and conservative macroeconomic policies, development is being increasingly driven by the demand for economic transformation, most notably via the country’s broad-based black economic empowerment (B-BBEE) programme.  South Africa is one of the largest external investors in many African countries and has expanded its trade links within the continent significantly since 1994.

The South African economy has undergone a remarkable transformation.  A largely natural resources based economy has given way to a more dynamic and resilient financial system in which higher value-added manufacturing and services are thriving.  The services sector currently contributes close to 70% to GDP.  In the decade prior to 1994, economic growth averaged less than 1% a year.  Since then it has averaged almost 3% a year.  Economically, 2005 was a very good year for South Africa.  Although inflation increased slightly, there was a slight reduction in unemployment figures while 5% GDP growth and record tax collections reduced the budget deficit to 0.5% of GDP.

Opportunities in South Africa

Opportunities in South Africa include:

• Automotive Industry
• Call Centres
• FIFA Soccer World Cup 2010
• Mining Sector
• Wine Industry
• Infrastructure
• Tourism

AsgiSA

The South African Government has embarked on a new macroeconomic policy designed to step up growth to the next level, conceding that infrastructure constraints and other impediments to foreign investment need to be addressed urgently. AsgiSA is a practical strategy to remove obstacles to sustainable higher rates of growth, employment creation and poverty reduction, with the aim of halving poverty by 2014.

The aim is average growth of 4.5% or higher for the next three years and at least 6% on average from 2010 to 2014. In addition to faster growth, AsgiSA will improve conditions for more job creation. Key to achieving this accelerated and shared growth is the need to increase the levels of foreign and domestic investment in the economy. This will entail a number of interventions including stabilising the currency, delivering a R370 billion infrastructure programme, prioritising key sectors of the economy including ICT, business process outsourcing, tourism and biofuels, accelerating the acquisition of key skills, and building capacity and easing regulatory constraints.

Broad-Based Black Economic Empowerment

Black Economic Empowerment (BEE) is a market system that sets out to ensure a sense of collective ownership and sustainability. It is about normalizing South African society and bringing South Africa’s long excluded majority into the mainstream of the economy.

Broad-based black economic empowerment (B-BBEE) is a progression from the narrow-based black economic empowerment in that it looks more broadly than just at ownership and management. According to the BEE Act, B-BBEE can be defined as “an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the number of black people that manage, own and control the country’s economy, as well as significant decreases in income inequalities”. Black people are defined as South African citizens who are African, Coloured or Indian.

B-BBEE seeks to undo the economic damage of apartheid through a growth strategy that targets inequality within the South African economy. B-BBEE highlights 7 areas or elements of focus: ownership, management, employment equity, skills development, preferential procurement, enterprise development and residual (corporate social investment). Residual or social investment, is about a companies’ investment in people, organisations or communities that is external to the work of that company.

The Codes require a certain percentage to be spent in a number of development areas, such as education, HIV, Skills training, the Environment, Sport and Arts and Culture. At least 75% of the benefits must accrue to natural persons who are black and preferably those in rural communities or part of the government’s rural development and urban renewal programmes.

Alive with Possibility

Our country, as a united nation, has never in its entire history enjoyed such a confluence of encouraging possibilities. Our success will flow from our creativity, our diversity and our sense of community."

President Thabo Mbeki, 2005 State of the Nation Address.

For more information about South Africa:
www.imc.org.za, www.southafrica.info

50 Years of Independence

As Ghana celebrates 50 years of independence, we bring you the statement given by His Excellency, Annan Cato, Ghana’s High Commissioner to the UK, as he launched the 50th Anniversary celebrations in London.

Fellow Ghanaians, Members of the Press, Distinguished invited Guests, Ladies and Gentlemen.  I welcome you warmly to this special media briefing which marks the formal launch of activities in the UK to commemorate the fiftieth anniversary of Ghana’s independence.

The significance of Ghana’s independence on 6th March 1957 is well documented. It was a great event for Ghanaians; but it was also an event of great political significance and therefore was welcomed by all of Africa and by peoples of African descent throughout the world. The immortal declaration by Dr. Kwame Nkrumah that Ghana’s independence had meaning only to the extent that it led to the independence of all of Africa brought hope to a sleepy Continent that was then under the grips of colonialisation and exploitation.

Kwame Nkrumah – Ghana’s first Prime Minister and President

Ghana’s leadership and sacrifices ensured the total liberalisation of the Continent.  But it did more than that. It gave Ghanaians a new confidence to work for improvements in their living conditions. It encouraged people of colour to discover their inner strength and to reject policies, attitudes and practices that had for centuries held them under bondage and subjected them to conditions of humiliation and cruelty.

It is this momentous event that has brought us here today. The opportunity enables me to outdoor the various activities which the High Commission has accepted to commemorate the event. The programme was drawn up after wide consultations with our stakeholders and with a cross-section of the Ghanaian communities in the UK.

Before we begin to savour the joys of this momentous occasion however, it is fitting for me to pay tribute to the founders of our nation and all our national heroes who fought for and sacrificed their lives in some cases, for the independence of the nation. In particular, I salute Osagyefo Dr. Kwame Nkrumah, the first Prime Minister and the first President of the Republic of Ghana for his visionary leadership. Many others, the Veranda Boys, Trade Unionists, Ex-Servicemen teachers and students, market women, made their own contributions to independence. We salute all of them as indeed we salute the current leadership of our country for their wise leadership and for the tolerant and prudent manner in which they have been steering the affairs of the country. It is this leadership of service which has ensured us stability, peace and sustainable development.

Ghana’s Independence re-energized the US Civil Rights Movement

I have already observed that Ghana’s independence had wide-ranging significance in Africa and elsewhere. It ushered in a new era of respect and recognition for the capabilities of peoples of African descent all over the world. It re-energised the civil rights movement in the US and fuelled agitations for self-rule in Africa. There can be little doubt that in the early years at least, Ghana played a role in international affairs much larger than the country’s infant economy and insignificant muscle would have made possible. A detailed assessment of Ghana’s experience as a sovereign country and role in international affairs will take a whole day to recount. For the moment I would like to observe that during the period of our independence, we have grappled with developmental challenges and in some cases we have registered impressive results, while in others, we have not done too well. Many avoidable mistakes have been made and Ghanaians have paid the price for them.

Our failure has been that we have not yet achieved levels of economic development that could have made poverty a thing of the past and some draconian policies of the past have driven too many of our citizens to foreign climes where their services have been appreciated. The tragedy of this exodus is that many of those who departed our shores possessed skills and knowledge which could have helped accelerate the pace of our socio-economic development. But impressive achievements have been made in many other aspects of the country’s life, which outweigh the failings. Particularly in the last decade, Ghanaians have embraced constitutionalism as the way they wish to be governed and have resolved that never again will they allow their rights to be violated. The confidence of Ghanaians has been revived and the resurgence of our economy is bringing the smiles back on the faces of our people.

Ghana Today

Today, Ghana stands at the threshold of becoming a middle income country with economic growth rates topping 6% in 2006. The confidence of the investor community has been restored in the national economy following the stabilisation of macro economic indices which in turn have drawn positive credit ratings internationally including the assessment of a respected institution like Standard & Poors. Ghana’s thriving economy continues to win recognition and admiration of our development partners and major development agencies who have rallied solidly behind the government’s economic agenda.

It is this new Ghana that we are celebrating this year under the theme “Championing African Excellence”. The broad objectives of the occasion would be to celebrate and commemorate Ghana’s achievement as the first country south of the Sahara to attain independence from colonial rule; to reflect on the evolution, development, achievements and setbacks of our country over the past 50 years and to look forward to the future with greater confidence believing that we can achieve excellence in all fields of human endeavour in the coming months and years.

Source and image: Ghana High Commission UK

Zambia at a Glance

The Republic of Zambia is a landlocked country in South-Central Africa. It is surrounded by Angola, Zaire, Tanzania, Malawi, Mozambique, Zimbabwe, Botswana, and Namibia. The country is mostly a plateau that rises to 8,000 ft (2,434 metres) in the East.

Although within tropical latitude, the general height of the plateau, averaging 1,300m above sea level, gives Zambia a moderate climate which has earned the country the nickname of the "air conditioned state."

Zambia is populated by more than 70 ethnic groups, many of them Bantu-speaking. It has some spectacular scenery, including the Victoria Falls along the Zambezi River, the Bangweulu Swamps and the Luangwa river valley.

The unspoiled nature of Zambia is perhaps its greatest tourist asset, and the country has many lakes, rivers and beaches.

Key Facts

President: Levy Mwanawasa

Population (2006 est.): 11,502,010 (growth rate: 2.1%);birth rate: 41.0/1000; infant mortality rate: 86.8/1000;life expectancy: 40.0; density per sq mi: 40

Capital: Lusaka, 1,773,300 (metro. area), 1,265,000 (city proper)

Other large cities: Ndola, 349,300; Kitwe, 306,200; Kabwe, 219,600, Chingola, 151,100

Monetary unit: Kwacha

Language: English is the official language in the country. Other vernacular languages include: Bemba, Kaonda, Lozi, Lunda, Luvale, Nyanja, Tonga; about 70 other indigenous languages

Literacy rate: 81% (2003 est.)

Economy: In the late 1960’s, Zambia was the third largest copper miner, after the US and the Soviet Union. World copper prices collapsed in 1975 with devastating effects on the economy. Improved copper prices and investment in mining have today improved prospects for export earnings.

GDP/PPP (2005 est.): $10.23 billion;

GNI per capita: US $490 (World Bank, 2006)

Real growth rate: 5%.

Inflation: 19%.

Agriculture: corn, sorghum, rice, peanuts, sunflower seed, vegetables, flowers, tobacco, cotton, sugarcane, cassava (tapioca), coffee; cattle, goats, pigs, poultry, milk, eggs, hides.

Labour force: 4.8 million; agriculture 85%, industry 6%, services 9%.

Industries: Copper mining and processing, Construction, Foodstuffs, Beverages, Chemicals, Textiles, Fertilizer, and Horticulture.

Natural resources: copper, cobalt, zinc, lead, coal, emeralds, gold, silver, uranium, hydropower.

Exports: $1.947 billion f.o.b. (2005 est.): copper/cobalt 64%, cobalt, electricity, tobacco, flowers, cotton.

Major trading partners: South Africa, UK, Switzerland, Tanzania, Democratic Republic of the Congo, Zimbabwe, UAE (2004).