Here’s your Daily Brief for September 9th:

African Entrepreneurs – (via Freakonomics Blog / NYT) – A cool write-up featuring Appfrica’s John Gosier and Magatte Wade of “Adina for Life” beverage company (which is AWESOME!). This blog post profiles three innovators in Africa introducing new solutions to their countries’ and continent’s unique challenges. They all seek to depart from the traditional foreign assistance paradigm and move towards a new approach to development.

John Gosier, Appfrica

John is well known on the Internet and in ICT4dev circles, as he does awesome work incubating tech. ventures through his company Appfrica Labs and his blog posts add a very interesting African perspective on the tech. industry. Appfrica allows budding tech. entrepreneurs a steady salary, an inspiring environment, and the mentorship that is needed to follow their passions and get projects out the door. Gosier has positioned Appfrica to be a leader in African tech. innovation.

Magatte Wade, Adina for Life

“Adina for Life” is an awesome beverage company that was featured at SOCAP09 this year. It’s a seriously tasty lineup of drinks! The story behind the company is equally as awesome. Adina was started by a Senegalese entrepreneur who was, “disdainful for foreign aid, skeptical of the viability of the technology industry in Africa in the near term, and placing no faith in the ability of microfinance to transform lives on a large scale.” Magatte Wade focused on the labor-intensive manufacturing sector (with a social conscience) to bring about societal change in her country.

“Wade acknowledges that African manufacturers will be unable to compete with countries like China and India on cost, but she believes the continent can transform itself into the producer of the world’s high-end, organic, socially responsible brands.”

Bicycles For All Occasions (via Beyond Profit) – I posted an article a while back on the Bambulance, here’s a similar article by Beyond Profit magazine featuring a company called Zambikes which is working in Zambia. What I like about this article is that it features the “business model” approach that I was looking for in Bambulance.

“Zambikes not only supplies new bikes to communities, but also has spawned a local industry by training workers to fabricate parts locally, assemble bikes, and provide maintenance.”

Here’s some more cool information on their business model.

Government Accountability Office (GAO) Report Recommends Extending AGOA Trade Preferences to Boost African Apparel (via The Whitaker Group) – I love the content that comes through Whitaker Group – Here’s an interesting report on AGOA released by the GAO. Also, check out Rosa Whitaker’s piece on“Debunking Myths About AGOA”.

Here’s your Daily Brief for August 20th:

AGOA Nations Frustrated By Administration’s Adherence To Status Quo (via The Whitaker Group) – I wrote a post a few weeks ago about the African Growth and Opportunity Act that was being promoted at the AGOA Forum by several high ranking US officials including Secretary Clinton. This excellent post from Whitaker Group outlines the disappointment of the private sector and African governments in the Obama Administration’s lack AGOA reform, despite its very public “commitment” to promote trade and investment in Africa.

In my previous post, I wrote about some of these concerns — a major one being the number of products covered under AGOA. Another being the US possible extending AGOA benefits to non-African countries like Cambodia or Bangladesh (two countries that would easily out-compete and drown out African markets).

Despite African countries being quite vocal in local media outlets about what THEY wanted from AGOA, it appears that the Obama Administration intends to maintain the “status quo”

Nuclear Power for Energy Security in Africa (via The Whitaker Group) – Another gem from the Whitaker Group, this time on Energy Security in Africa. Reliable electricity throughout Africa has always been a problem – and a serious one when you consider the income lost by businesses during blackout. It is an all to common occurrence, and that combined with the high costs of electricity have been a major impediment to investment.

With SEACOM and TEAMS coming online in the months to come — dramatically decreasing the costs on internet and connectivity — African governments need to focus on the next big infrastructure challenge: electricity.

African countries are looking to nuclear power as the solution. The coolest part about this is detailed at the end of the post and includes seriously import research benefits that could come about and help across multiple sectors. Also nuclear power creates and maintains high-paying and high-skilled jobs that cannot be offshored.

Patient capital, markets that work and ending the endless emergency of poverty (via Seth Godin) – Here’s a nice post from Seth Godin explaining in very concise terms the importance of “patient capital”.

The Microfinance Debate:

As Muhammad Yunus, founder of microfinance and Grameen Bank, was awarded the Presidential Medal of Freedom, critics assailed the very institution he was being awarded for. Microfinance has revolutionized development and blazed the path for social entrepreneurship. But the model has its flaws — including high overhead costs barely covered by interest payments, that it’s largely subsidized credit, and the lack of a long-term financing option. Here are a few articles to help you follow the debate:

• The backlash against microfinance (via Duncan Green) – A good breakdown of the arguments at hand over microfinance
• A $9 Trillion Question: Did the World Get Muhammad Yunus Wrong? (via Foreign Policy) – Peter Schaefer argues in this Foreign Policy article that the work of de Soto (integrating the poor into formal markets) and Yunnus (delivering micro-loans to the poor) must be built upon and combined “in order to develop a more viable way to realize their [the poor's] inherent promise.”
• Economics focus: A partial marvel (via The Economist) – The Economist weighs-in to the discussion

And here are posts I’ve already included in previous briefs:

• A Global Surge in Tiny Loans Spurs Credit Bubble in a Slum (via WSJ Subscription Req.)
• A Response to the WSJ Micro-Credit Crisis Article
• Is There a Mortgage Boom in Sub-Saharan Africa?

Here’s your Daily Brief for August 6th:

There has been a lot of buzz surrounding AGOA for the last week or so, and I’ve included a few articles in my daily briefs the last couple of days. I figured today I would dedicate the entire DB to AGOA and flush out some of the concerns and issues on all sides.

First of all, I’m very disappointed in the US Media for completely ignoring this story all together. I was watching NBC Nightly News the other night and Brian Williams cut to a reporter traveling with Hillary Clinton, they were in Nairobi, and all they talked about was North Korea! A cursory Google News query for “AGOA” yields nominal US reports. But some wildly important issues are being raised!

So, I hereby take it upon myself to be your guide through AGOA 2009:

Brief Background on AGOA

The African Growth and Opportunity Act (AGOA) was initially passed by Congress and signed into law by President Clinton in May 2000. Four years later, President Bush signed the AGOA Acceleration Act of 2004. AGOA expands on the Generalized System of Preferences (GSP) and gives eligible African Countries trade preferences for quota and duty-free entry into the US on certain goods.

But what would US Trade Policy be without political stipulations? AGOA allows the President to determine a country’s annual eligibility (of course, this responsibility lies more in the hands of the USTR). To date, there are about 41 countries eligible for AGOA preferences.

While AGOA acknowledged the need for eased integration of African economies into the core global economy, it has had some significant shortcomings. It is these shortcomings that have dominated the discussion among scholars and the African media the last couple of weeks.

The theme of this year’s AGOA Forum was “Realizing the Full Potential of AGOA Through Expansion of Trade and Investment”. It’s interesting this comes a year after the original legislation was set to expire (the 2004 Acceleration Act extended it through 2015). But given this theme, it makes these shortcomings essential to address and discuss.

AGOA Shortcomings

The first of the major shortcomings is the political stipulations mentioned above, whereby the US reserves the right to pick and choose eligible recipients. Bill Easterly wrote a great post yesterday on this (linked below), so I’ll keep my remarks short here. Whenever politics and economics come together, the outcome is rarely/never good. And when we’re speaking about developing nations, sometimes the stick/carrot game really hurts us more politically. (This could lead into an entire discussion on the role of China in Africa!)

The second major shortcoming is the US’ still-burdensome import standards, regulations, and policies. From Kenyan exporters to the US that I’ve spoken with, this is a big non-tariff barrier in itself. If we want AGOA to succeed we need to work on assisting African exporters in meeting US-Import Standards.

A third shortcoming is that of little capacity building and technical assistance. While a provision for this was written into the original legislation, it remains a significant issue. This is discussed further below in the “African Countries Call on US Reform” section.

The final shortcoming, and probably most important, is the disproportionate consistency of US-Africa trade under AGOA. While last year’s trade numbers reached $67.5 billion, about a 30% increase year-on-year, 97.2% of that went to oil producers in only six countries. This means that all other countries only brought in $1.9 billion total. And that number is predominantly textile and apparel exports. (Download US-African Trade Profile 2009)

US Calls on African Reform

Aside from calls for political reform throughout Africa (notably in Madagascar, Liberia, and Kenya), the US Trade Representative to Kenya Ron Kirk offered his suggestions for economic reform in an Op/Ed piece for the Business Daily newspaper.

He called for a diversification of trade in order to generate and sustain economic growth. Furthermore, he suggested African Countries improve their local business environments and foster entrepreneurial initiative.

Secretary Hillary Clinton notably announced, “Today, Africa counts for two percent of global trade. If Sub-Saharan Africa were to increase that share by only one percent, it would generate additional export revenues each year greater than the total amount of annual assistance that African currently receives.” Hopefully this signals a shift is State Department / USAID thinking away from the traditional aid model and more toward a business/trade approach to Africa. (Her full remarks are embedded below)

African Countries Look Inwards

African ministers have acknowledged the role they play internally in making AGOA work. They have called on regional economic blocs like the EAC, SADC, ECOWAS to lead the way in increasing global competitiveness.

African Countries Call on US Reform

President Kibaki called on the US to assist in removing obstacles to trade such as those mentioned above. “The US should help Africa build trade capacity because some of the set quality standards demand that we import specialized equipment, materials and parts from the developed world,” he said.

Other African ministers called on the US to enhance the goals of AGOA through the transfer of skills and technology to improve the quality of exports.

One request include the establishment of a low-cost credit facility for start-up businesses in Africa willing to participate in AGOA, coupled with US-provided technical training and assistance.

African entrepreneurs have requested that product inspection be done in the country of origin, helping lower costs and other technical barriers to trade.

Concluding Remarks

Overall, the discussion is an important one. Integrating Africa into the global economic core is an essential task, but a task of which responsibility does not solely lie on the shoulders of the United States. There is a lot to be done in African Countries with respect to capacity building that does not require US assistance. Additionally, there needs to be a discussion among business leaders, both American and African, to lead toward greater cooperation and increased access to mutually beneficial opportunities.

Here’s Secretary Clinton’s Keynote Remarks at the AGOA Forum in Kenya:

And Here is a Joint Press Conference with Kenya’s Foreign Minister:

And As a Little Treat, Here’s a Sneak Peak Into The Night’s Activities @ Carnivore:

Note: It’s not like the nights at Carnivore I remember!

Here’s the Bill Easterly article I mentioned above:

Hilary offers trade opportunities to Africa – except when we don’t feel like it (via Bill Easterly) – Bill Easterly expresses concern in this blog post over the USTR’s ability to revoke AGOA status from any country for “political” reasons like poor governance. He points to Madagascar, an exemplar country for the success AGOA has had in promoting its textile industry; but political unease in the country has led to the USTR threatening to revoke AGOA eligibility (effectively destroying the local textile industry comprising 6.5-8% of GDP and 50,000 jobs).

Updated:

Here’s some good articles on AGOA:

The New Global Reality: Africans Lead the Way at the AGOA Forum

Will Global Recession Damage US-Africa Trade Ties? (via Paul Collier and Rosa Whitaker)

Here’s your Daily Brief for August 5th:

Paul Farmer out for USAID? (via Foreign Policy) – It appears as if Paul Farmer, the man recently rumored to be appointed head of USAID, is no longer in the running. The culprit seems to be the daunting vetting process itself, including a form requiring the candidate to list every foreign national he/she has come into contact with of the past several years.

How is AID-reform supposed to take place if nobody can get in to reform it???

In the works: Major social enterprise rating and reporting systems – It looks like some big changes to the social capital markets world may be in the works. The first is the “Impact Reporting and Investment Standards” — an initiative toward creating a common language for assessing social and environmental impact. The second is the “Global Impact Investment Rating System”, a B-Lab-like system for rating global private equity and investment portfolios. I could see the latter being a huge success — leading to increased private investment in such funds/portfolios.

Interview with Marie Konaté, CEO of a leading producer of fortified infant cereal products in Côte d’Ivoire – Protein Kisèe-La is a company delivering cereal-based foods designed to fight malnutrition while promoting the production of local food crops.

Quote of the Day:

Clinton Re-Affirms US Commitment to Africa Partnership (via VOA) – “Today, Africa counts for two percent of global trade,” she said. “If Sub-Saharan Africa were to increase that share by only one percent, it would generate additional export revenues each year greater than the total amount of annual assistance that Africa currently receives.” – Hillary Clinton

What do you think about the Daily Brief? Let me know!

Here’s your Daily Brief for August 4th:

Investment Into Rwanda to Rise 10% in 2009 (via Reuters) – Hat tip to @whitakergroup for this gem: A more positive outlook than the NYT piece; This Reuters article reports a 10% increase in investment to Rwanda. The growth is attributed to an honest and disciplined government, though there is still red tape to be cut for investors.

Just When Africa’s Luck Was Changing (via NYT) – This article from the New York Times takes a look at the impact of the global credit crisis on investment in Africa. Just as major investment projects were on the rise throughout the continent, companies have had to scale back due to the current economic climate. What I like about this article is that it makes the argument FOR business in Africa. Quoted in the article is M Nathaniel Barnes, Liberia’s ambassador to the United States and the country’s former finance minister:

““Instead of talking to Usaid, I’d rather be talking to a company like Nike,” Mr. Barnes said. “Having a partner like that means jobs and economic growth, and you just don’t get that from aid.”

The article further illustrates examples of business investments throughout the African continent. This is something that is rare and much needed in the US Media – painting a more accurate picture of Africa and its numerous investment opportunities.

Trade a powerful development tool (via Business Daily Africa) – Ron Kirk, a US Trade Representative in Kenya, wrote this Op/Ed piece in the Business Daily Africa. He stresses the need for African countries to expand and diversify trade in order to achieve sustained economic growth. Additionally, he calls on African Countries to improve their own business environments by nurturing entrepreneurial initiative and simplifying/modernizing border procedures.

Diary of a Social Venture Start-up (via GOOD) – This is a series of blog posts over on the GOOD Magazine website that looks pretty intriguing

Here’s your Daily Brief for August 3rd:

US Africa Trade on Exhibition at 8th Annual AGOA Forum (via Africa Business Source) – A nice overview of this weeks AGOA forum. Makes the good point that the issue needing MOST focus is no longer market access, but rather building up the competitiveness of African Countries by addressing infrastructure, information sharing, and capacity building.

Coca-Cola Enterprises Joins Carbon Footprint-Cutting Race (via Triple Pundit) – Coca-Cola, one of my favorite companies, has pledged to reduce its carbon footprint by 15% by 2020.

What Western Executives Should Learn About Design Thinking in Emerging Markets – This is an article from back in March by John Hagel and John Seely Brown, both from the Center for Edge Innovation at Deloitte. They look at the case of Tata Motors, which released a car called the Nano which was a “disruptive innovation” in the developing world car market. It’s a great piece, and at the end they list four key points (or “broader lessons”) to be learnt.

Maker Faire Africa in 2 Weeks (via WhiteAfrican) – Erik Hersman posted a preview of what to expect at the upcoming Maker Faire Africa – “a celebration of African ingenuity, innovation and invention” – in Accra. Check it out!

Kiva.org: July: 2nd biggest month of lending ever! – Despite (or maybe IN spite of) the global economic recession, Kiva announced today that July posted the second highest lending numbers EVER through their site! The highest month EVER you ask? JUNE! This comes off the back of five (5) very strong months of lending ranging from $3.8 Million in February 2009 to June’s record $4.9 Million. This is awesome, congrats KIVA!