Quote: (07-11-2012 12:28 AM)46. Wrote:
Quote: (07-10-2012 02:58 AM)Hooligan Harry Wrote:
Quote: (07-09-2012 01:18 PM)46. Wrote:
http://www.ibm.com/ibm/gio/media/pdf/gio...e_page.pdf
Nah its wishful thinking bud.
There is a ton of opportunity there, but unless you have worked there and have some sort of experience there, you are playing with fire. You need contacts on the ground or you need to know the place.
No its not wishful thinking. Its already happening. You realize that many of the markets in Africa have been outperforming the US and Europe, right?
"The IMF projects that seven African economies will grow faster than 8% this year, and six of the top ten fastest-growers economies in the world will come from the continent."
That's not wishful thinking, that's reality. Very few people realize it, which is why I brought it to attention.
Yes, it is wishful thinking. Like wish 3 times on my heart of hearts that this is real life, wishful thinking. Im not trying to be nasty, just provide a realistic perspective, so I say that tongue in cheek
You need to put what you are reading into context dude, and I am not quite sure how much time you have spent there to have come to the conclusions you did. 8% growth sounds like a lot when we spectate from our developed economies, but its nothing when the base is so low to start with. Steve Jobs was worth more than Rwandas entire annual GDP for example, which means minimal investment creates spikes, but it does not really touch sides given the sheer extent of poverty and under development.
They need to see high double digit growth rates as a minimum for decades, and even if that growth seems high, its not even taking into account the problems with stability that make it unsustainable over the long term. Then there are issues with the stats themselves, which are often cooked to attract foreign aid and investment and cover wide spread corruption.
So 8% is really nothing in the greater scheme of things, although it makes for pretty reading if you compare it to developed economies and take it completely out of context
There is no African economic revolution coming or happening. What you are seeing is historical boom/bust during periods of peace. Its business as usual, although its getting a bit better in some places and they seem to be hanging on a bit more. You will not see an African Singapore, Malaysia or even Brazil in our lifetime though, and South Africa is declining rapidly now as investment and liquidity flees.
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"World output, forecasted by the International Monetary Fund in its recently published “World Economic Outlook”, is projected to fall from 3.9% to 3.5% for 2012, but Sub-Saharan Africa is expected to grow from 5.1% to 5.4%, exceeded only by China, India, and other emerging Asian economies.
http://investinginafrica.net/2012/06/imf...an-growth/
See above.
Does not mean anything if its not sustainable, and the other thing you dont seem to understand is that the growth is coming from large resources and infrastructure projects predominantly, along with foreign imports for staples. These are not small business warriors, you are talking banks and big resource/construction companies that produce locally, BUT PROCURE ABROAD.
For you, as a small business warrior, its a shut shop unless you are actually on the ground there, have a lot of contacts and understand the local business culture. Which is why if you want to do business in Africa, you typically start outside Africa and work your way in through those companies, or you go there and hope you dont get killed.
Any westerner who thinks this is going to happen just by pitching up is deluding himself though. Jesus, half the places dont even have functioning government and you go to some sites under armed escort. These are not the slums of Brazil, its hardcore poverty, crime and violence that flares up over the smallest thing.
We finance projects on shorter life cycles because insurance over 7 years becomes impossible to secure for many projects in Africa. No one knows what the fuck is going to happen tomorrow half the time, so we cant even build basic risk models.
You also need to understand that the IMF and global central banks pour money into Africa knowing its a sinkhole. This inflates their GDP further, although its mostly about tax write offs, currency and buying favour to keep the resources companies and construction projects going.
Africa is a gamble because its so unpredictable.
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I mentioned cell phones and technology to exemplify the infrastructure growth being driven in Africa, again under the radar. These indicators set the stage for more. IBM and other companies are moving into Africa because conditions turned favorable; even with high corruption (that's why you have local partners). Read the IBM report. And, again, they're working with African companies.
http://www.itnewsafrica.com/2011/07/ibm-...structure/
Nigeria is one of the most developed economies on the continent and is an oil producer. IBM have been in Africa for years, this is not a new thing. Who do you think supplies all the comms equipment and infrastructure those companies need to run their ops since the 70's?
They say they are working with African companies, but you dont take the politics into account either. There are government mandates in most of these places that force all company ownership and management to be a certain percentage locally owned. They dont deal with them because they see opportunity with African companies, they deal with them because its part of the bureaucratic process in many of these places. Its almost like tithes that they pay. Not in all cases, but in most.
Big business will spin their investment into these regions because its good publicity and important for shareholders, but most of the time big business is winning contracts in these places by bribing people, towing the political line by siphoning money off to "african business partners" to be kept in the deal, or they are going through procurement that is managed outside that country like everyone else.
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There's a reason certain companies stay ahead of the curve and open up new markets before others. They own globalization. If you recall, IBM was way ahead of the China curve, selling their PC division to Lenovo, and moving an important divsion HQ to China. Now they're doing it again.
What new markets? You make out as if IBM in Africa or Nigeria is a new thing. Look well done for lapping up a bit of IBM publicity, but you seem to think that Africa is China for some reason. I really wish that was the case, but it wont be another China until the Chinese have completed their current colonisation of the place.
Not in our lifetime Im afraid to say.
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And why would anyone start a business anywhere- China, India, Turkmenistan, Russia?? without due diligence or local partnership? Sure its got high levels of corruption. Like there's none in China. Sure it not a "Consumer" market, but who cares? The returns are there for people willing to read tea leaves and dig deeper than conventional wisdom. Ground floors don't come around often.
Jesus, what sort of business are you talking about? You think you are going to hop on the plane, find local partners in a small business, draw up a contract, open a bank account together after completing your shareholders agreement, and then ride the unicorn to the end of the rainbow of African riches?
Try it an let us know how you go please. The only reason why there is any business in these places is because there are resources there. That takes big business there, and everyone supplies to them. There is little to no real trade IN Africa, and there are very few systems in place to administer it. Its done by handshakes, bribes, threats and force.
There are two ways you make money in Africa
1) Big business who invests in massive projects at massive margins to offset risk. Multi million and billion dollar projects. So large they build their own labour camps, airports and bring in private armed security to protect it. You sell to them and you supply to them. They are your gateway in.
2) You live there, learn to understand the culture and you manage everything hands on. Or you get people you can trust with your kids lives to do it. You then focus on essentials and imports, because the big companies will procure outside of Africa anyway, so its local consumers only for the most part.
Im not being nasty, just trying to keep everyone realistic here. Unless you are representing shareholders (doubtful) and unless you understand it means living there and managing everything yourself (doubtful) then all the noise about African potential for small business people is a waste of your energy and everyone elses.
Unless you are prepared to live there, there is not much on the go for people. The only places where you could do something are South Africa, Namibia and Botswana. The rest of the place is fucked beyond belief.
And certainly no high level consumer technology lol.
