Africa Business - Seven

I had the opportunity to attend the Annual African Business Conferences in Harvard University. In the conferences were full many bright Africans sharing their business experiences in Africa. There were also a fashion show, concert, sport, and dance events.

The Africa Business Club of Harvard Business School prepared the 7th Annual Africa Business Conference, February 11 – 13, 2005.

The keynote speaker, at the Conference, was Malik Fal, the Regional Director for Africa of the On The Frontier Group (OTF), a competitiveness consulting company. He opened the program by emphasizing that now is the time Africans fight for an economic dignity.

Mr. Fal noted that export dependence on basic commodities has kept African countries poor. Prices for basic commodities have been constantly declining underscoring the need for Africa to get out of the “commodity trap.” He argued that strategic export diversification is crucial for Africa’s development.

For example, while Nigeria is the number one producer of cassava, Thailand is the number one exporter. Nigeria has not developed cassava as an export commodity. About 40 percent of cassava produced in Nigeria is wasted because of the lack of poor refrigeration. Nigeria needs to diversify its export base and develop potential markets for cassava products. For example, cassava could also be used for cosmetics, and thus if Nigeria produces and exports cosmetics made from cassava, they could earn more from this commodity.

Further, the role of African leaders in economically developing the continent should include setting up horticultural research centers and building transportation infrastructure. African governments must also have clear and tangible goals, such as the increasing the GDP of their countries by 10 percent and exports by 20 percent by a specific year.

The private sector must understand customer needs and make products accessible to them. Instead of looking for favors from foreign governments, African governmental bodies and private entities should produce products that people overseas want to buy. The New Partnership for African Development (NEPAD) should not be another “begging tool.”

Mr. Fal further emphasized the importance of developing collective goals. People must have confidence in African trade and finance misters. The approaches and attitudes of African leaders could be effective in arousing entrepreneurship or changing the behavior of people. For example, Ugandan president, Yoweri Museveni has successfully reduced the number of HIV/AIDS victims in his country through anti-HIV campaigns and education.

The first sessions were about ways to find pathways out of Africa’s commodity trap. Jason Bauer, from OTF Group, is discussed about Rwandan government’s coffee export strategy. Bauer found that Rwanda’s coffee exports are in a condition called “the commodity trap.” Coffee prices are declining because more countries are exporting this commodity. Vietnam and Brazil have increasingly dominated the coffee market. Due to the abundance of coffee suppliers, the New York Board of Trade has decreased the price of coffee.

In order to compete with other coffee-producing counties, Rwanda must increase global demand for its high-grade Arabica coffee and develop its own specialties.

OTF also recommended that Rwanda build coffee washing stations and start further processing the coffee that is exported out of the country. Mr. Bauer stated the importance of making quality products and consistently distributing them.

Because Rwanda is surrounded by other countries that have eco-tourism industries, the OTF Group also advised Rwanda to develop tourism. The OTF Group believes that Rwanda must learn from Kenya’s experience in order to be successful with an eco-tourism industry. While the number of tourists that visit Kenya is high, the duration of their visits is very low, and thus minimizes the profit that Kenya earns from tourism. The two advantages that Rwanda has are a high land forest that has over 30 species of primates, and gorillas in the south.

To capitalize on these two assets, the OTF Group suggested that Rwanda develop a research center to attract people who are passionate about gorillas and primates. Organizing a “primate discovery tour” led by primate experts would keep the tourists in the country for longer visits than just driving through parks as tourists do in Kenya. To connect the northern primate area with the gorilla site in the south, OTF Group advised the Rwandan government to build roads. In addition, the OTF Group recommended universities teach languages and sciences in order to accommodate people who have a special interest in primates and gorillas.

The second panel was about the entertainment industry in Africa. Panelists: Ngoran Assoumou, the founder of Rman Interprod; Ben Murray Bruce the Founder of Silverbird Group; Femi Odugbemi the President of Itpan; Joke Silva an Actress & Movie Director; and Toyin Subair the Principle Partner of the Abraham & Co. The panelists stated that the opportunities in the entertainment business in Africa are great. Ms. Silva, actress and movie director, said, “Nigeria … is the third largest movie and video producer in the world.” She also mentioned that Nigeria has what it takes to succeed in business--talent in distribution.” Nigeria’s movie business model is low budget, high quality, and learning on the job. However, some of the panelists argued that short training sessions for people in the industry are still necessary.

The obstacles to the entertainment business in Africa are the lack of a “legal frame work that works.” Mr. Ngoran Assoumou, the founder of Rman Interpor, provided an example based on his personal experience. He found copies of his television production in France, yet had no legal recourse for copyright infringement. Access to capital is also an impediment in entering the entertainment business. The primary source of capital for investment in Africa is from family members. The language divide between Francophones and Anglophones was also mentioned as a challenge to entering the entertainment industry.

The third session discussed the media. Panelists included: Henry J.J. Jefferys, Deputy Editor, Beeld; Phil Molefe, Head, SABC South Africa; and Mahamodo Camara, Deputy Director, Group Jeune Afrique. All the panelists agreed that investing in the media sector is high-risk, because the media must play a watchdog role in reporting corruption in government, the private sector, and NGOs.

The panelists also noted that stories about Africa are currently being written, edited, packaged, and distributed from Western cities such as London, Paris and New York and do not accurately reflect the continent. The stories that come from these entities are directed under the industry adage, “if it bleeds it leads.” This principle prevents information about Africa other than war and natural disasters from being disseminated to a western (and global) public.

The panelists identified the positive movement in the media sector as the development of the “Africa Editor’s Forum.” The panelists emphasized the importance of African journalists taking ownership in telling their own stories.

One of the challenges in the newspaper/magazine business is that in Africa, the price of a newspaper is equivalent to the price of a meal. In addition, African media disproportionately focus on politics and politicians. Furthermore, a majority of the media is owned and operated by governmental bodies, making it difficult for private companies to enter the market.

The last but most existing session was about outsourcing. The young and energetic panelists were March Dadzie the manager of Convergys; Andrew Esemezi the general manager of Supra Telecom; Karim Morsli the co-founder of Rising Data Solutions; and Nii Simmonds the founder of the NAFRICOM.

Mr. Morsli noted the potential to make money in Africa. Mr. Simmonds stated that Africa must skip the manufacturing stage of economic development and “go straight into outsourcing,” by setting up call centers and eventually moving into software development. The main challenge to expanding the “outsourcing industry” is infrastructure.

Africa’s competitive advantages in the outsourcing business are cost; language – in Anglophone and Francophone countries; time zones – proximity to Europe and the United States; and human capital – both in Africa and in the Diaspora. Currently, there are call centers operating in Ghana, Nigeria, Togo, Mauritius and Senegal. Ghana’s data processing centers, however, are only working at 20-percent capacity. The next step in making call centers economically viable is to apply the learning curve to avoid stagnation and to develop other outsourcing businesses.

Kinship by Philippe Wamba

Philippe Wamba’s book is a must read for all those interested in humanity. Philippe records history that has been ignored in an engaging and interesting story telling style. The book is ahead of its time. The author digs deep into untold stories to examine the cause of division among people, from a global prospective.

Philippe’s rich observation is enhanced by his knowledge of history and a humble way of looking at his personal experiences across continents. In addition, he engages readers with an exemplary family and a coming of age stories. The writer parallels his family tale with world history and current events. In the process, he neatly packages information that is hard to find. The book will make you laugh with pleasant tales and cry with cruel stories.

It is a shame how we humans continue to ignore ideas that unite and enlighten us in favor of the old dividing stories, as we kept losing forward thinking leaders before their time - such as Philippe Wamba. The book shows us what type of history we create when we function in this world based on suspicion and ignorance.

Trip to Africa 1

I just came back from visiting Ethiopia and Ghana after 15 years in the United States.

On my journey, I realized that the opportunities to succeed in Africa is as plenty as the starts on the African sky.

Ethiopia’s International Trade

During the Durg regime, Ethiopians heard a song that praised coffee every weekday mornings for being the backbone of the Ethiopian economy. Coffee was also called the “green gold.” While the songs are no longer broadcasted, coffee is still the number one Ethiopia’s export, accounting for about 47 percent of Ethiopia’s total exports, in 2005.

After relaying on raw materials such as coffee for more than 30 years, Ethiopia still faces the challenge to diversifying and increasing Ethiopian exports. Exports are important to a country for earning foreign currency, which could be used to buy products not manufactured in the country or pay debts.

Because it is difficult to find a trade data from Ethiopia, most of the numbers used in this article are from the United Nations and the Department of Commerce. The trade data does not include arms and ammunitions because those statistics are not readily available.

In 2005, Ethiopia’s total trade was $2.4 billion: exports - 656 million, imports - $1.8 billion. Ethiopia bought $1.9 million more than it sold in 2005.

Ethiopia’s Exports

Most of Ethiopia’s exports were coffee, spices, and tea worth $314 million (48 percent of the total exports); grain and seed, $133 million (20 percent); hides and skins, $75 million (11 percent), vegetables, $22 million (3 percent).

The profit Ethiopia earns from exports was negatively affected by the following three phenomena.

Firstly, while the demand is still high and growing for organic raw materials, prices for Ethiopia’s exports, in the past decades have consistently declined. Meaning even if more coffee is being exported out of Ethiopia the money coffee earns is lower than decades ago.

Secondly, reports indicate level of efficiency in production, management, and distribution in Ethiopia are still underdeveloped. Coffee alone provides income for approximately 25 percent of the population.

Thirdly, Ethiopia’s exports were negatively affected by the recent Ethio-Eritrea war. As shown in the graph, after seven years, Ethiopian exports to the United States have not yet reached the level in 1998, which was $70 million. In 2005, Ethiopia’s export to the U.S. was $62 million.

While most of the Ethiopian exports are extractive, one of the most damaging is the exports of trees, which was the sixth largest export in 2003. Ethiopia is currently facing a very high rate of deforestation.

The European Union bought $337 million (51 percent) of Ethiopian exports; China $86 million (13 percent); Japan $74 million (11 percent); and the United States $62 million (11 percent) in 2005.

Ethiopia’s Imports

The top three Ethiopian imports in 2005 were machineries and aircrafts $664 million (34 percent of total imports), vehicles and electronic equipments $398 million (20 percent); food and medicine $212 million (10%).

In the long run, the reliance on imported machineries, medicine, and food might suffocate domestic industries in Ethiopia.

Ethiopia imported $713 million worth items (36 percent of total imports in 2005) from the European Union; $515 million (26 percent) from the United States; and 285 million (15 percent) from China.

Ethiopia’s Regional Trade

The top Ethiopian export and import partners are the wealthiest countries in the world. Ethiopian trade with the rest of Africa and other developing regions are limited. Several trade experts’ advice African countries to increase regional and continental trade for economic growth.

Many regional organizations in Africa are attempting to negotiate the lowering of trade barriers among neighbor countries.

Ethiopia is member of several enter-regional trade organizations such as Common Market for Eastern and Southern Africa (COMESA). Under COMESA, 20 east African countries has agreed “to co-operate in developing their natural and human resources for the good of all their people'” and promote “peace and security in the region

On October 31, 2000, eleven out of the 20 COMESA member countries[1] created a Free Trade Agreement and “eliminated their tariffs on COMESA originating products, in accordance with the tariff reduction schedule adopted in 1992.”[2] Ethiopia has not yet other neighboring counties in creating a free trade area.

Joining the other African countries would provide Ethiopia with an economic opportunity. Several studies indicate if people are given the opportunity to trade, no ethnic differences or boarders will prevent them from improving their economy.

Ethiopia’s Trade with the United States

Ethiopia ranks number 78 in buying U.S. products and number 136 in selling to the United States.

To improve the trade relationship between the United States and some African countries, President Clinton signed the Africa Growth and Opportunity Act (AGOA) became a law in May 18, 2000. President Bush expanded and extended AGOA by amending the law twice. The latest amendment became a law on July 13, 2004.

AGOA received bipartisan support in Congress. Many individuals, lawmakers, and nongovernmental organization worked to create, expand and improve AGOA. Those individuals include Whitaker, the founder and CEO of Whitaker Group and Congressman Jim McDermott, a democrat from Seattle.

AGOA grants quota and duty free access to certain African exports to the United States from eligible African countries.

Counties must meet annual eligibility requirements in order to export some of their product to the United States duty free. The eligibility requirements include progress toward a market-based economy, free trade, the rule of law, political pluralism and support in fighting terrorism.

AGOA also provides an opportunity for African trade ministers and business people to meet with high U.S. government officials, annually. As of March 2006, four AGOA forums have taken place in Senegal, Washington D.C., and Mauritius.

Ethiopia has been AGOA eligible since AGOA become a law. Through AGOA, Ethiopia’s exports to the United States have somewhat increased and diversified. While it is a good start for diversification of Ethiopia’s export, relaying solely on apparel export is not good for Ethiopia because China and India are expected to dominate world’s textile and clothing market, especially after quotas for their exports of clothing was eliminated early in 2005.

Organizations such as the Ethio-American Trade & Investment Council have been attempting to improve trade by organizing events with the United States Trade and Development Agency for Ethiopian exporters to visit Washington DC to find buyers in the United States.

Many Ethiopian business owners need the help of the Ethiopian Diaspora to distribute Ethiopian products worldwide. The African Diaspora could take advantage of these programs to export and import goods and services that benefit Ethiopia.

United States also have export assistance programs for people who would like to ship goods and services to Ethiopia. Government agencies, such us the U.S. Import Export Bank and Export Administration under the Department of Commerce, offer such assistance.

In conclusion, while a well developed transportation system and high tariffs are barriers to Ethiopian trade, opportunities for prosperity through trade are immense.

Ethiopia must stop relaying on one backbone - coffee – and start building strong pillars of trade. Optimistically, Ethiopia will soon offer the world her blessings for a profitable return.

Stay tuned for an article on Ethiopian potential exports.

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[1] The Eleven member States that have set up a Free Trade area under COMESA are Burundi, Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius Rwanda, Sudan, Zambia and Zimbabwe.

[2] COMESA, “Over View of COMESA,” found at http://www.comesa.int/about/Overview/view, retrieved Mar. 20.

The Ethiopian Millennium

The Ethiopian Millennium: Time to Annex the Ethiopian Renaissance

“Awake! Awake! Put on your strength! Put on your new beautiful garments. Shake yourself from the dust: arise. Loose your bone from your neck....”

Dr. Ephraim Isaac echoed the above Prophet Isaiah’s 3,000 years old message to the Ethiostudy members and guests at a gathering, which took place on August 14, 2004 in Washington, DC at the Sankofa Bookstore.

During his speech, Dr. Isaac stressed the importance of mobilizing the African Diaspora to celebrate the Ethiopian millennium as a way to revive the Ethiopian Renaissance, which is a network of people devoted to sublimate the consciousness and living standards of Ethiopians. Purchasing Ethiopian products, such us the traditional clothing and jewelry, is important in asserting economic independence.

Sankofa, which means there are benefits in learning from ancestors, in Akan - a Ghanaian language, fits Dr. Isaac’s message that encourages Ethiopians to study their history to find solutions to the current problems Ethiopia faces.

Dr. Isaac is a peacemaker, visionary and teacher. He is the first professor of Afro-American Studies department at Harvard University. He directed the Institute of Semitic studies in Princeton. He received a Peacemaker Award from the Tanenbaum Center in 2002 for his effort to resolve the boarder conflict between Ethiopia and Eritrea. In July 2004, Dr. Isacc also received an honorary Doctor degree from Addis Ababa University. Currently, he is attempting to create peace amongst Ethiopian leaders and the political candidates.

Tigest Belachew, an active member of Ethiostudy and one of the committee members of the Ethiopia Renaissance, organized and introduced Dr. Isaac’s speaking event. The Ethiopian Renaissance recently revived the Committee for Ethiopian Literacy organization of the 1960’s. Ethiostudy is a free association of Ethiopians and friends of Ethiopia. The association’s goal is to understand Ethiopian history, politics, culture and economy by inviting different professionals to share their knowledge.

Dr. Ephraim Isaac began his speech by asking what language the audiences prefer him to use for his presentation. He speaks seventeen languages. The audiences chose English.

Dr. Isaac said it is crucial that more people pay attention to the study of the Ethiopian ancient languages, history and literature because we could learn how we could work together for the betterment of Ethiopia. “Ethiopia is like a combination of Kenya and Egypt,” where people could study history while they enjoy nature.

Dr. Isaac identified many research areas in Ethiopia that are helpful for the current generation. Specifically, he pointed out that there are many Ge’ez books about history, literature, music, religion, chronicles and hagiographies. <>

Millions of useful manuscripts can be found in churches and monasteries in Debre Bizen, Geshen Mariam, Debre Mariam, and many other places.

Out side of the country, Ethiopian historic manuscripts could be found in the Library of Congress, in Washington D.C., Biblioteque National in France; British Library in London; Vatican in Rome; and Ethnographic library in Russia.

<>Dr. Isaac identified four areas of researches that are important to the current generation.

First, Dr. Isaac emphasized that the ancient manuscripts provide examples of multiculturalism, which could remedy ills caused by ethnic division or economic segregation.

<>Many European visitors witnessed peaceful way of life in Ethiopia in the 15th century. For example, the humanist Damia da Goes, a disciple of Erasmus, reported Christians, Muslims, and Jews, and others lived peacefully in Ethiopia. The Pope prohibited Damia da Goes’s book.

Second, Ethiopia’s hidden manuscripts are important in the study of religion and philosophy. Beyond being a place where Judaism, Islam and Christianity coexisted harmoniously for centuries, these religions have a deep root in Ethiopia.

According to Dr. Isaac, Prophet Mohamed’s teachings and the Holy Quran reflect Ethiopian linguistic, literary, and conceptual influences. Three of the four early Muslim leaders are believed to be of Ethiopian or part Ethiopian origin, such as the Muezzen Bilal, the Khalif Omar, and the military leader Amru Ibn al.

Additionally, he pointed out because Ge’ez is one of the seven languages the bible was first translated into, a person who understand Ge’ez is a respected biblical scholar. <>

Third, Dr. Isaac shared there are plenty Ethiopian manuscripts that contain many role models that could enhance everybody’s life. For example, he discussed how several Ge’ez books record many influential women’s stories.

Dr. Isaac talked about some heroines, such as Meskel Kebra, Kerstos Semera, Zena Mariam, and Emmea Worete. Kerstos Semera, was a philosopher who always advocated peace, Dr. Isaac explained. In one of her priers, Dr. Isaac quoted her for saying “God why don’t you reconcile with Satan so we can also be friends with our enemies.” Perhaps now we should ask why don’t we become friends with our enemies so there would be a universal peace?

Fourth, the history of Ethiopians’ the Ethiopian Diaspora is also important for Ethiopians who live outside of the country.

Dr. Isaac recognizing the current Diaspora’s effort. He explained Ethiopians are currently having a positive influence to the point where their language has become one of the official languages in the world’s most powerful city, Washington, DC.

Historically, Ethiopians also had migrated to other regions of the world as merchants, sailors, and soldiers to influence their host country positively, he pointed out. For example, Dr. Joseph Harris, a professor at Howard University, who wrote “Africans in India,” and others documented that in India there was an Ethiopian Kingdom in the 13^th century. Dr. Isaac shared that the British faced the strongest resistance during their invasion in Janjira, one of the areas populated by Ethiopian descendants.

Dr. Isaac told while Ethiopian history in the past has influenced people positively, in the last 25 to 30 years’ our country has been depicted in a shameful way in the international media. He said now it is the time for Ethiopia to become an inspiration for economic freedom around the world, as Ethiopia was an inspiration to fight against colonialism and slavery.

He demonstrated how Ethiopian could rise from poverty through an old Ethiopian tongue-twister: “afean ba-malasie malasien ba-afea ka-lan-qoalanpalatakskut man yan-qoalapelataselegnal?” This proverb means, if I do not help my own tongue to speak, then who will? Dr. Isaac used this proverb to communicate if “Ethiopian are the once who could solve Ethiopian problems.”

His life is exemplary. He dedicated his life in learning and teaching since a very young age. As he eloquently communicated during his speech and through his work, he demonstrates the importance of revealing Ethiopians hidden treasury in the realms of humanities.

As a visionary, he actively advocates the idea of celebrating the coming Ethiopian millennium, which will commence in three years, in the Gregorian calendar 2006-07. Dr. Isaac advised the current Ethiopian government and various civic organizations to mobilize the country for the Millennium as a dawn and day break for an Ethiopian Renaissance.

Dr. Isaac is optimistic about Ethiopia’s near future. He shared his observation of many positive involvements of students in Eritrea and Ethiopia who yearn for peace. He talked about his personal experience with several law school students in Asmara University who denounce the separation.

On the Ethiopian side many new student organizations such as the Afro Flag group in Addis Ababa University, hope that some day the Ethiopian and Eritrean people will respect and work with each other. These groups reject divisions among Ethiopians and prepare themselves to work with anyone whose goal is to develop the country by working together.

He believes the whole Black world would support Ethiopians in African development. He has several African American who have studied Ge’ez literature under him and who admire Ethiopia for its contribution to fighting for freedom.

At a closing of his speech, Dr. Isaac introduced Tigist Belachew, Winta Tafferi, Mike Endale, and Sefanit Mesfin. He said they were “soldiers of the Renaissance.” They are also some of the active leaders the Ethiostudy group, which is a part of Ethiopian Students Association International.

For a long lasting peace in Ethiopia, Dr. Isaac suggested Ethiopian children have to be taught at least four languages: Amharic, Tigregna, Oromefa, and one other Ethiopia language they elect.

On his conclusion, Dr. Isaac emphasized, Ethiopia does not belong only to the leaders. A leader comes, a leader goes but Ethiopia is eternal. We could make the new Millennium work for us by uniting and working with and respecting each other. The solution is to use the coming Ethiopian Millennium as a way to revive the Ethiopian Renaissance: “the new beginning, a new dawn to bring solutions to starvation and diseases and make Ethiopia a strong leader in the world.”

"..me Introduce myself to me"

Africa is three times larger than the United States.

Weak up Africa

“Awake! Awake!
Put on your strength!
Put on your new beautiful garments.
Shake yourself from the dust:
arise.
Loose your bone from your neck....” Dr. Ephraim Isaac echos Prophet Isaiah’s 3,000 years old message.