MENU

Featured
Category

Africa, the Middle East, and the Future of Football

9 November 2015 Comments (0) Africa, Featured, Middle East, Politics

fifa

In 2010 South Africa hosted the first World Cup to be held on the African continent. Following ex-President Sepp Blatter’s scandal of corruption and vote-rigging this summer, FIFA is once again turning to the Middle East and Africa for solutions and a new vision for the organization’s future.

Since the founding of FIFA in 1904 all but one President has been European, with the exception of Brazilian João Havelange. But the candidate list confirmed by FIFA last week boasts a truly 21st century roster; four out of the seven candidates hail from the Middle East and Africa, signaling not only the globalization of football but also the millions of fans represented in this region.

The Untapped Potential

Andrew Walsh of the sports research group SPORT+MARKT, notes an “increasing awareness of the scope for growth in Africa’s key football markets”. And it’s not just FIFA that is gaining interest in the region, but all of football leadership. “Africa is a hot-bed of untapped potential for clubs due to the sheer numbers of fans there. No other continent on earth harbors such a high ratio of football interest,” Walsh added.

And he’s not exaggerating. In a 2011 study, SPORT+MARKT revealed that 72 per cent of Africa’s 1.12 billion people, aged between 16-69, have an interest in football, roughly 800 million football fans. The study shows that 55 per cent of them are interested in the Premiership, while 39 per cent actively support an English top flight team.

In comparison, Europe’s entire population is 742.5 million people- the fact that there are millions more African football fans than the entire population of Europe illustrates why FIFA’s newly diverse potential presidential candidates mirror the future of football.

south africa worldcup

The Odds

Despite the numbers, many sport bookies seem to favor Frenchman Michel Platini as the likely winner of the upcoming elections. But as a long-time FIFA executive currently on suspension alongside Blatter, many Union of European Football Associations (UEFA) members doubt that he will be able to oversee the far-reaching reform needed following Blatter’s regime- especially since he’s trying to hold onto his UEFA presidency at the same time.

The FIFA presidency requires full attention to achieve necessary reform, so it’s likely that when it comes to the vote UEFA members will swing behind a candidate that will bring a fresh-start to the organization.

The Candidates

Likely candidate Jordanian Prince Ali bin al-Hussein ran against Blatter in this summer’s elections and nearly won, with UEFA’s backing as well as the support of Asian and African regional football associations. A former FIFA Vice President, veteran politician, and current President of the West Asian Football Federation, Prince Ali seems like a worthy contender to Platini. However in the last Vice Presidential election, Prince Ali lost to Sheikh Salman bin Ebrahim, another candidate with a strong running for the presidency.

Sheikh Salman also has an impressive track record and a proven ability to consolidate votes. A Bahraini FIFA Vice President, Salman is on the task force to untangle football disputes between Israel and Palestine, and has targeted match-fixing, grassroots development, and women’s involvement during his time as President of the Asian Football Confederation, an organization mired by historic corruption and transparency issues.

“Turn FIFA around really quickly”

Salman currently denies allegations of human rights abuse concerning the violent suppression of pro-democracy campaigns in Bahrain in 2011, where over 150 athletes were imprisoned. Salman is a historic Blatter fan and a backer of the controversial Qatari and Russian World Cup bids, but he reckons he’ll “turn FIFA around really quickly”

Musa Bility, Liberian Football Association President and oil mogul, is also plagued by a controversial history concerning his 6-month football ban in 2013 and allegations that he won his presidency by buying votes for $500 a piece.

Among all the candidates, Tokyo Sexwale has the most divergent CV: a millionaire mining tycoon and anti-apartheid activist, Sexwale was imprisoned for 13 years in Robben Island alongside Nelson Mandela. A former FIFA Vice President, Sexwale was also key member of South Africa’s winning World Cup bidding team, and a chief organizer of the competition. Though the bid has drawn allegations for bribery, Sexwale has not been accused of any wrongdoing and has publicly criticized the payments, calling it “worrisome” for the future of football in a BBC interview.

Despite FIFA’s need for a fresh-start, many candidates have a history of wrongdoing to address. Currently embroiled by scandal, FIFA needs a new figurehead fast to clean up the mess and criminal reputation Blatter left behind. Recovering from collapse will be tricky without strong leadership, but it’s undoing offers a once-in-a-lifetime chance to build an international governing body fit for it’s purpose. It would be a true crime to waste it.

Read more

An Untapped Resource: Emerging Fields of Employment for Women in the Middle East

6 November 2015 Comments (0) Business, Featured, Middle East

middle east women in tech

Echoing global trends, in the Middle East the number of women pursuing a university degree is equal to, or higher than the number of men. In Kuwait, Qatar, Saudi Arabia, and Jordan women constitute respectively 67%, 63%, 57%, and 51% of university graduates. Arab women outnumber men in even the hard sciences. Indeed, the number of female STEM graduates is higher in the Middle East than it is in Western Europe. But as of yet, these advances in education have not translated into jobs. The number of women in paid employment in the MENA region is the world’s lowest, at 32%. In Jordan that figure is 16%. And women are more than three times as likely to be unemployed as men in Saudi Arabia and Qatar. In Kuwait, nearly 80% of the unemployed are women.

Persistent social and economic barriers – both perceived and real – are standing in the way. How will women travel to work when they’re not allowed to drive? Who will escort them? Who will look after their children? And what happens if they become pregnant? Comprehensive female employment will require governments to enact new laws. And it will require companies to create separate offices, bathrooms, entrances, and more.

However, representing a highly educated talent pool and an untapped resource that could offer the region a competitive advantage, women are perfectly qualified to play a productive role in the workforce. And indeed, there are now some positive signs that fields of female employment are starting to emerge and that businesses are starting to capitalize on the potential of Middle Eastern women.

More female Internet entrepreneurs in the Middle East than in the West

Technology is playing a significant role. In a region where nearly a third of the 355 million population are aged 15 to 25, Internet and social media penetration is very high. Nearly 90% access the web from home (except in Jordan and Egypt where the figure is 44%-50%). And nearly nine in ten Internet users log in to social media every day. Nowhere in the world does Twitter have more active users in proportion to the population than in Saudi Arabia. Unsurprisingly, the region is also the world’s fastest-growing e-commerce market.

The combination is creating opportunities for women, allowing them to set up small businesses from home where they can at once conform to traditional social norms and work. Indeed, where only 10% of Internet entrepreneurs across the world are women, in the MENA region that figure is 35%.

sheburgerJust a few examples: Emirati Shaikha Eissa has built a successful burger company, She Burger, on Instagram utilizing her 25,000 followers. Mona Ataya has launched a baby product retail site, Mumzworld, targeting female shoppers, which employs 40 people and sells more than 100,000 products. And prominent Palestinian Instagrammers Ruba Abdulhadi and Badea Jaber, have brought luxury western fashion to the Middle East with an e-shop, ElMuda.com, which leverages social content.

ElMuda.com was supported by Oasis500, the first early stage and seed investment company in Jordan and the MENA region. And there are many other bodies similarly investing in the region’s female entrepreneurs. The Gaza Sky Geeks accelerator is actively working to increase women’s leadership in the Gaza start-up sector. Girls in Tech is working to inform women in urban and rural communities around the world about the possibilities that tech can open up. And the US State Department has a TechWomen initiative which pairs MENA female tech entrepreneurs with American counterparts in Silicon Valley.

Fetchr is revolutionizing Middle Eastern delivery with a female workforce

E-commerce is also creating further employment opportunities for women. For example, GPS delivery app Fetchr has developed a female workforce to revolutionize delivery in the region. Currently, much of e-commerce is paid for cash on delivery (60%), but if a woman is home alone she won’t answer the door for a male driver. This results in returned products, lag times in payment, and repeat delivery trips. In solution, Fetchr, operating in Saudi Arabia, Dubai, and Bahrain, has employed women to make the deliveries.

Co-founders Joy Ajlouny and Idriss al-Rifai say: “In Saudi Arabia, women are not allowed to drive. Our deliverywomen will not be driving, they’ll just be knocking on doors. And because Saudi law dictates that all women must be accompanied in public spaces by a mahram, a male-relative or in-law escort, Fetchr employs family teams. Father-daughter, brother-sister, uncle-niece.” The company is also actively hiring female drivers in the UAE where women are allowed to drive.

Creating new business spaces for women

Fetchr is not the only company capitalizing on the business benefits of a female workforce. In Saudi Arabia, the Olayan Group, a 30-company conglomerate led by Lubna Olayan, is similarly committed to female employment. The Group, which deals in investing, real estate, manufacturing and distribution for foreign brands including Coca-Cola, Ritz Crackers, and Oreos, currently employs some 400 women (3% of its 12,000 Saudi-based employees). It has set a target to have 1,000 female employees in roles at all levels, from the factory floor to sales and management, by 2016.

Lubna Olayan

Lubna Olayan

The Group’s first female employees, mostly disadvantaged women, made history when they became Saudi Arabia’s first ever female factory workers, sewing surgical gowns at Enayah. Coca-Cola bottling now has an all-female bottling line. And Nabisco Arabia has a woman-only production line. Olayan companies have installed female prayer rooms and created partitions in offices, canteens, and factory floors to give their women workers privacy in line with regulations. There are also women-only buses to and from work.

Because yes, in the short term female employment in the MENA region will take some investment. But in the long term, capitalizing on the potential of a whole sector of society will also come with benefits.

Read more

Ivory Coast Re-elects Alassane Ouattara in Landslide

4 November 2015 Comments (0) Africa, Featured, Politics

Alassane Ouattara

In a tightly monitored and relatively peaceful election, the people of the Ivory Coast have re-elected Alassane Ouattara, former Prime Minister and former deputy managing director of the International Monetary Fund, as President of their country in a landslide. Fifty-five percent of eligible voters participated in the election casting 84 percent of their votes for Ouattara, keeping him in power until 2020 in the cocoa-rich country.

Voter turnout was decidedly lower than the 80 percent rate for the hotly contested 2010 vote, but it was substantially above that of the previous presidential elections in 2000 and 1995.

Pascal Affi N’Guessan, his closest rival and also a former Prime Minister, won 9 percent of the vote. N’Guessan is the head of ex-president Laurent Gbagbo’s Ivorian Popular Front (FPI) party. N’Guessan’s presidential run attempted to bring FPI back into political relevance after sitting out the parliamentary and local elections after Gbagbo’s arrest during the 2010 post-election crisis.

Laurent Gbagbo and the 2010 Election

Ouattara finds himself in a very different position than he did after the disputed 2010 election which resulted in the ousting of two-term president Laurent Gbagbo. In 2010, Gbagbo received 38% of the vote in the initial election but faced a run-off with second-place Ouattara because of the country’s election rules requiring the winner to have 50% of the vote. In the run-off, Ouattara received 54% to Gbagbo’s 46%, according to the Independent Electoral Commission (IEC), but that vote was disputed by the Constitutional Council, which then determined that Gbagbo had won 51% of the vote after citing evidence of irregularities. Both candidates declared victory, and both took the presidential oath of office.

The United Nations, the ECOWAS, the African Union, the European Union, the United States, and former colonial power France declared support for Ouattara. They determined that the election was not compromised with former Prime Minister Ouattara winning a fair and free election at the ballot box. Gbagbo was told to abdicate the presidency by most of the international community. The body charged by the Ivory Coast Constitution with determining electoral disputes, however, declared Gbagbo to be the winner.

An ugly, bloody post-election civil war ensued pitting Gbagbo’s military against rebel forces supporting Ouattara with help from French troupes and UN peace-keeping forces. Four months of fighting, causing over 3,000 deaths and a deeper divide within the country, ended with Ouattara’s soldiers capturing and arresting Laurent Gbagbo. Ouattara then took power and the International Criminal Court indicted and arrested Gbagbo for crimes against humanity during the post-election civil war. Gbagbo is imprisoned in The Hague, Netherlands and is facing trial two weeks after the 2015 elections. Hardline members of his party, the Ivorian Popular Front (FPI), disavowed their latest candidate N’Guessan, however, and requested supporters to boycott the polls. Voter turnout was markedly lower in areas considered Gbagbo’s traditional strongholds.

Division in the Ivory Coast

The outcome of Laurent Gbagbo’s ICC trial will have a substantial impact on the course of the next five years in the political climate of the Ivory Coast. The verdict, resulting in either an acquittal or conviction, will affect the balance of power in the FPI and its political support in the opposition. Most are expecting that Gbagbo will be convicted, but an acquittal would be a game changer. It could unite the opposition to Ouatarra and have a substantial impact on current political sympathies and the election in 2020.

The opposition parties in the Ivory Coast are currently deeply divided and in a state of disarray. Despite a few claims of voter intimidation and unequal access to state media, this election is universally considered valid, and there will be no civil war to determine who will be President. Over 10,000 police officers and soldiers were deployed all over the country to keep the peace during this year’s election.

All is still not well in the country with a continuing north-south divide, but progress is apparent, and Ouattara cites a growing economy based on its cocoa exports. Investors are flooding into the world’s top cocoa grower and their fears of upheaval are, temporarily, alleviated. Official observers considered the election peaceful and transparent. The President congratulated all Ivorians for their maturity and exemplary behavior.

ouattara celebrationsEconomic Growth and Optimism for the Future

Ouattara has presided over an unprecedented economic turnaround during his time in office. He is a noted economist known for transforming his country into one of the largest economies among its peers in West Africa after being decimated by civil war. The Ivory Coast economy is expected to expand about 10% this year, after averaging close to 8% the previous three years. The gain is greater and more rapid than most of its West African peers. Critics of the President believe he needs to do a better job of alleviating overall poverty and encourage further reconciliation after decades of violence and division within the country.

President Ouattara is optimistic about the future of his country. He believes that the people of the Ivory Coast are committed to a path of stability and reinforcement of democracy that his government is trying to foster. Hope is that the country continues its development and that peace will accompany it. Citizens must engage with their government and with their fellow citizens in peaceful political discussion and debate for progress to continue.

Mr. Ouattara believes that continued healthy growth in the economy will ease tensions that have divided the country in the past. An important element of reconciliation is improving living conditions, and this is already happening with investment in power infrastructure and the increasing availability of potable water. There is new hope in the country, and President Ouattara believes it will continue during his time as its leader.

Read more

Souq.com CEO Ronaldo Mouchawar: Empowering the Middle East through E-commerce

30 October 2015 Comments (0) Featured, Leaders, Middle East

RONALDO-MOUCHAWAR

Born and raised in Aleppo, Syria, Ronaldo Mouchawar is the co-founder and CEO of the Arab world’s largest online shopping site and a pioneer of e-commerce in the region. He is also an eloquent symbol of a rising trend that’s seeing entrepreneurs reject the, if not saturated then busy, Western market, so long seen as the choice, in favor of using their expertise and innovative spirit to revolutionize and empower the market at home.

Originally trained in the West, Mouchawar was educated at Northeastern University, Boston, where he obtained a Bachelors in Electrical and Computer Engineering, and a Masters in Digital Communications. He also spent the early years of his career in the US working in technology and business management, including a role as technical and systems consultant at Electronic Data Systems (EDS).

But in 2000, he returned to the Middle East with a belief he could improve the Arab world by exploiting the empowering possibilities of technology. He first launched a consulting company managing web and e-commerce projects for the local Arab market, before in 2005 joining forces with Maktoob’s Samih Toukan and Hussam Khoury to launch online retail site and marketplace for third party sellers, Souq.com, just as the Arab world began to embrace technology and mobile.

A decade on, Dubai headquartered Souq.com, known as the Amazon of the Middle East, now operates in the UAE, Egypt, Saudi Arabia, and Kuwait, and ships to Oman, Qatar, and Bahrain, selling more than 400,000 products from consumer electronics, to fashion, household items, and babywear. And it is growing fast: in the last two years, Souq has expanded ten times over; and in 2014 it saw an annual growth of over 100%. The site sees 30 million unique visitors per month, of which more than 10 million are on mobile. And an app, launched in 2014, has now been downloaded around two million times. There are rumors that Souq is fundraising at a valuation of $1 billion.

It’s some success story. But Mouchawar still considers his company a startup. While in financial terms this cannot be considered true, he says: “If continuing to think of Souq as a startup helps us innovate, then great.”

Innovating the e-commerce model for Arab markets

Certainly, Mouchawar’s ability to innovate has been key to Souq’s success. Originally launched as an auction site modeled on eBay, he quickly redirected the company into a fixed price model, recognizing its potential in the Middle East. And while Souq.com may now superficially seem like a copycat-Amazon, Mouchawar has transformed that business model for the market: he has localized and arabized e-commerce.

For example, Souq.com has gone some ways to rebalance the disparity between the availability of Arabic content online (currently just 3% of all content) and the number of Arabic speakers around the world (around half a billion). Arabic content has become a Souq forte, as are localized promotions, partnerships, and exclusive products. Mouchawar has also adapted operations for Middle Eastern challenges. For instance, in Egypt, only about 10% of the population have credit cards, and in countries like Bahrain and Saudi Arabia, 60% of online purchases are still paid for via cash on delivery. Mouchawar has developed prepaid cards which can be purchased in real life (IRL) and used online. He has also overcome an underdeveloped logistics infrastructure by developing a Souq-owned local delivery system offering “last mile” deliveries to places with no mail service or postal address, along with investing in local logistics companies and building relationships with local couriers. Souq teams are also in place in the majority of Souq’s operating countries, to continually innovate local solutions for area-specific problems.

Job creation in the Middle East

But Mouchawar believes his e-commerce solutions can have even further reaching impacts: he believes that e-commerce can empower.

“We believed the Internet and e-commerce specifically could be an empowering tool to support SMEs, and help create a knowledge base economy where we employ as many people and create jobs, as our region needed it,” he says. “It could create badly needed jobs for young people and boost the businesses that are the backbone of Arab economies.” “Imagine the access a merchant can have from a street in Cairo to a customer base in Saudi Arabia, to the UAE. If we can connect all these dots, you will have an incredible customer base.”

The Souq.com website proudly reveals that it employs 1,000 people directly and has provided jobs for another 6,000 people indirectly through its networks of partners, suppliers, and couriers, “not to mention the 75,000+ sellers, many of whom have built their livelihood via the website”.

Unsurprisingly, Mouchawar has become one of the Middle East’s most prominent entrepreneurs, visible and accessible on the startup circuit, speaking at conferences, and looking to inspire where he can.

Read more

Freeman Osonuga: To Space and Beyond

27 October 2015 Comments (0) Africa, Featured, Leaders

Freeman Osonuga wired

31-year old Nigerian Doctor, Freeman Osonuga, has 927 followers on Twitter. That number is minuscule compared to 44,700 who follow fellow countryman, and former NBA star, Hakeem Olajuwon. That could change quickly. A man of many hats, Osonuga may have a larger global impact than the basketball player when all is said and done. In 2014, TIME Magazine pegged him as a “Person of the Year” with other Ebola fighters, joining the likes of Mahatma Gandhi, Martin Luther King Jr., and Pope Francis in an elite club of world changers. What will he do for an encore? Freeman Osonuga may become Spaceman Osonuga, exchanging his Ebola suit for a spacesuit as part of his mission to save the world.

Born the youngest of six children, Freeman grew up in Ogun State, an impoverished area of Nigeria that was once a part of the short-lived Republic of Biafra. He lost his father in his youth, and his mother struggled to send him and his siblings to public schools. At the Olabisi Onabanjo University, he studied medicine and surgery. Osonuga started an NGO as an undergraduate student called Heal the World Foundation Nigeria. The foundation’s objectives are to care for children with disabilities, orphans, and the less-privileged. So far, they’ve helped over 550 children with disabilities and orphans in Nigeria: a good start for a man who strives to save the world.

One of Ten Outstanding Young People in Nigeria

Freeman OsonugaIn his writings, Osonuga has stated that the Heal the World Foundation Nigeria aspires to be the leading organization working with global organizations to guarantee that poverty in Africa is eradicated and becomes an informative display in a museum where it belongs. His work with the group has garnered attention locally and internationally. In 2013, he was named by Junior Chambers International (JCI) Nigeria as one of ten outstanding young persons in Nigeria and was selected by MTN Group Ltd (South Africa) to be one of their 23 delegates to 2013 One Young World Summit in Johannesburg. One Young World is the preeminent global forum for young leaders aged 18-30. It brings together the most promising young leaders from around the world, empowering them to make lasting connections and develop solutions to some of the world’s most pressing issues.

The Kruger Cowne Rising Star programme selected Osonuga as a One Young World Ambassador for the One Young World Summit 2014 in Dublin. Outstanding members of the public and Ambassadors, aged 18-35, were invited to nominate themselves to go on a once in a lifetime trip. Young people from 90 nations cast their vote in Kroger Crowne and One Young World’s global search for an icon of the future to catapult onto the international stage and into space – upon the XCOR Lynx® Spacecraft. Freeman Osonuga put himself in a position to be that icon.

The Meritorious Service Award from President Bai Ernest Koroma of Sierra Leone for Osoguna

Soon after the Summit, Osonuga embarked on the most dangerous journey of his short life; he volunteered to battle the Ebola virus at its peak in West Africa for six months with 835 African Union Ebola responders. Over 28,000 people have contracted the virus, and over 11,000 have died during the epidemic, including 230 medical care workers battling it. Freeman worked with a medical team in Magbenteh Ebola Treatment Unit, a 100-bed facility, in northern Sierra Leone. Fortunately, he did not contract the Ebola virus while treating the disease. In his walk through this valley of the shadow of death, he gave hope and comfort to fellow Africans fighting the disease, both those afflicted and the medical team. The Magbenteh Unit had a 65% survival rate with patients and a zero percent infection rate among the medical staff. For his efforts, Osoguna received the Meritorious Service Award from President Bai Ernest Koroma of Sierra Leone as well as the recognition by TIME magazine.

Life has not slowed down for the Nigerian doctor. He is a WIRED 2015 Innovation Fellow and recently spoke at their 2015 event with 11 other featured speakers. He has also been named an Associate Fellow of the Royal Commonwealth Society. On October 2, 2015, he was shortlisted as one of three finalists for the space trip sponsored by Kruger Cowne, One Young World, and Xcor Space Expeditions. Freeman will deliver a keynote speech to thousands of delegates and a panel of global business trailblazers at the One Young World Summit in Bangkok in November. After the three finalists give their speeches on topics of their choice, a winner will be announced. If selected, Freeman Osonuga may make history as the first black African to venture into space.

The trip will last about one hour and will blast off in 2016. G-Force training is scheduled for the trip, in the Netherlands, to prepare passengers for their travel outside of the Earth’s atmosphere. Osonuga told Quartz Africa that the overall objective of the project is not just going to space; it is to raise global conversations on issues that affect all inhabitants of Earth such as climate change, global peace, and poverty. Godspeed, Freeman Osonuga!

Read more

Egyptian Parliamentary Elections: The Path to Prosperity?

23 October 2015 Comments (1) Featured, Middle East, Politics

Egypt-elections

 

This week, more than 27 million Egyptians in 14 of the country’s 27 provinces began voting in the first round of long-delayed elections to choose a new parliament. The country has been without one since Egypt’s Supreme Constitutional Court dissolved the People’s Assembly in 2012, a body which was dominated by the Muslim Brotherhood. In place, current President Abdel Fattah el-Sisi – former head of the Egyptian Armed Forces who helped oust the Brotherhood’s President Mohamed Morsi in 2013 – has held all legislative powers, ever since he was overwhelmingly elected in 2014 with 96.6% of the vote.

But where Sisi has hailed this election a milestone in the country’s path to prosperity, and the final stage in the country’s three-step transition to stability (step one being the vote on a new constitution, step two, the election that made him president), Egyptian voters appear less interested and critics have called it a sham.

Low turnout in the first round of Egyptian parliamentary elections

Turnout has been low. On Wednesday, the head of the Electoral Commission reported that voter participation was 26.56%, even after the government declared a half-day holiday on Monday to encourage more to vote. Reuters put that figure at 10% on Sunday.

Egypt’s foreign ministry spokesman has strongly rebuffed claims that the low turnout represents a failed political environment. He insists the country is moving toward stability. “Anyone with a basic knowledge of Egypt’s political landscape should know that this year’s parliamentary elections are subject to many complex factors,” he said, citing, for example, Egypt’s continuing development of stable political opposition parties.

But whether low turnout can be called evidence of voter fatigue (Egyptians have voted seven times since the removal of President Hosni Mubarak in 2011), or disenchantment (most of the more than 5,000 candidates are perceived to support Sisi who has cracked-down on opposition groups and extremism), it seems that Sisi is losing some of his cult-like adoration.

What will the new parliament look like?

Held under heavy security – reportedly 185,000 soldiers and 180,000 police were deployed as a result of ISIS militant attacks over the past year -, this is the first phase of a two phase vote to select 596 MPs. The second round is set for November. 448 will be voted in as independents, 120 on party lists, and 28 as presidential appointees. There are quotas for women, Christians, youth, farmers, workers, and Egyptians abroad.

The independents list – which will form 75% of the assembly – tends to favor wealthy, well-connected, pro-government candidates. And the liberal, pro-market Free Egyptians Party, founded by telecoms tycoon Naguib Sawiris, who famously offered to buy an island for people fleeing Syria, has already seen 65 of its candidates qualify for the runoffs in 51 constituencies. Pro-Sisi coalition, For the Love of Egypt, an alliance of businessmen, politicians, and former NDP members, is also doing well, having secured all 60 party seats on offer in this first round.

Slow signs of reform

Many of these businessmen – who strongly supported Sisi’s rise to power – believe he can deliver the stability needed, and open up investment opportunities. But relations are also strained.

On election, Sisi – widely seen as a friend of economic reform – promised a rebalancing of government finances, a reduction of state debt and energy subsidies, reforms of the investment environment, a broadened tax base, the introduction of a value-added tax, labor reforms, and more. It is a commitment he repeated at the World Economic Forum in Davos, stating his intent to remove obstacles to private-sector development and resolve disputes between investors and the government.

But evidence of actual significant reform is slow. And in a country where half the population is under 25, average per capita yearly income growth has sat at around 2% since 1980. Unemployment has increased to 12.7%. Inflation is just under 10%. The economy is only projected to grow 5% in 2015-2016 (roughly the same as in 2009-2010 under Mubarak). And the main stock index is down 23% this year, more than twice the decline of the MSCI Emerging Market Index.

Sisi has focused his efforts on using the military (his preferred approach to achieving stability) to oversee huge infrastructure projects, such as the expansion of the Suez Canal area. Many think this strategy does little for long-term economic growth and reveals a suspicion of the private sector.

Courting foreign investment

Courting foreign investment should be essential for Sisi, if he is to fulfil his promises. Foreign direct investment is currently at $6.4 billion (year ending June 2015), compared with an average of almost $10 billion in the four years preceding 2011. Government debts to foreign oil and gas companies – who provide the essential fuel for industry and power stations – have grown to $5.7 billion, so many of them have pulled back or exited altogether. And the foreigners who once held around $10 billion of domestic bonds have left, and not yet returned.

But there are positives to be drawn. With Sisi holding a tight grip on the security and safety of Egypt, many believe that financial and economic policies will be the only area in which a parliament will be able to play. Particularly one with its own interests in business. And these elections are also a signal that Egypt is committed to creating stability – both political and economic – whether or not there is still a long way to go. Good news, perhaps, for future foreign investment.

Read more

12 African Countries In Top 20 Affordable Luxury Real Estate Markets

21 October 2015 Comments (0) Africa, Economy, Featured

luxury africa real estate

According to a September study by the German real estate portal Lamudi, twelve African countries are among the Top 20 emerging markets where luxury real estate is most affordable. Ethiopia topped the ranking in a total of 32 emerging markets in the recent Lamudi results. Luxury real estate in Ethiopia now costs an average of 396.58 € per square meter. To put this in perspective, luxury Paris property such as the Place Vendôme, Tuileries, and Palais Royal real estate commands 13,000 € per square meter, according to This Paris Life. To extend the frame of reference, Global Property Guide reports an average cost of over 6,000 € per square meter for “affordable luxury” land throughout France. Amazingly, therefore affordable luxury real estate in France is roughly 15 times more expensive than luxury real estate in Ethiopia!

Out of phase with the Lamudi study, however, Global Property Guide reports that all land in Ethiopia is owned by the government of the country, and can only be leased. With continuing border disputes, and weak enforcement of property rights, it is not clear how investors can securely exploit this appealing valuation of real estate for commercial purposes in Ethiopia. And recent drops in currency values of many African countries already discourage investment. However, the broader picture is more appealing in some of the other countries featured in the Lamudi report.

Côte d’Ivoire’s real estate market has grown rapidly since 2011

Côte d’Ivoire is now in full economic takeoff following a political and military crisis. Luxury real estate here is at an average price of 427.65 € per square meter, according to the Lamudi classification, which was made on the basis of average prices gathered from several thousand real estate sales advertisements. After ten years of sluggish economic growth, Côte d’Ivoire’s construction industry now claims double-digit growth in the most recent three years, according to the Oxford Business Group. Côte d’Ivoire’s real estate market has grown rapidly since 2011. Private initiatives thrive and the market is seeing significant development. A number of unique sources contribute to these especially attractive property prices. Substantial support by international donors in Côte d’Ivoire has artificially subsidized the markets and the country is now open to global construction firms, and boasts diversified investment sources.

Tanzania took third place in the Lamudi ranking with prices at 486.03 € per square meter. With an average price of 850.54 € per square meter, Kenya claimed sixth place on the list, following Mexico and Colombia. These figures are meticulously mined by Lamudi, a portal launched in 2013. The clearinghouse is a global property portal focusing exclusively on emerging markets. The Lamudi platform is available in 34 countries in Asia, the Middle East, Africa and Latin America, and includes in excess of 900,000 real estate listings throughout its global network.

Nigeria, with a per square meter price of 856.29 €, was followed closely by Kenya, according to Lamudi. Meanwhile Tunisia at 885.52 € appeared in the ninth slot, just ahead of Ghana (1,035.75 €), and Morocco (1,144.25 €). Rounding out the African countries featured, Uganda (1,597.22 €) occupied 15th place, ahead of Algeria (1,766.53 €), while Angola (3,965.52 €) closed the top 20 list.

Marrakech a top investment choice

Target cities to watch in the emerging luxury real estate market include Marrakech, Morocco. Marrakech holds strong growth prospects, favorable political stability, and an enticing environment for foreigners. Marrakech was recently named by Financial Times property experts as a top investment choice for 2014.

Lamudi’s focus on raw price may not be a representation of true property values. While luxury real estate property values in Morocco may be nearly four times those of Ethiopia, both are relatively cheap on a global scale, especially with regard to developed countries. For this reason, other criteria such as governmental and economic stability, environmental quality, and effectiveness of law enforcement may be more important determining factors than the price of land when comparing the featured countries for the purpose of luxury real estate investment. Furthermore, the unpredictable political climate and economic instability in these areas guarantees that these prices will fluctuate dramatically in relatively short periods of time.

Read more

African Currencies in Decline

15 October 2015 Comments (0) Africa, Business, Featured

african currencies

As currencies across the African continent fall against the dollar, the International Monetary Fund stated that the financial sector should brace itself for additional volatility. The IMF warned Wednesday in a semiannual assessment of risks to the global financial system, that the fallout from the end of “easy-money policies” by central banks could decelerate global economic expansion, reveal inflated asset prices, and further strain overextended lenders. Several factors contribute to the decline, including a trend by international investors to abandon emerging markets.

MSCI’s primary emerging equity fell 1.4 percent, declining to a one-month low, and Asian shares with the exception of Japan lost 1.6 percent. China led with a 2.75 percent rout on stocks. India, among the best equity performers this past year, realized its lowest daily fund outflow as of Wednesday. Resultant currency declines included record lows in several countries, including South Africa’s rand, Zambia’s kwacha, Uganda’s shilling, Tanzania’s shilling and Ghana’s cedi. The zloty and forint also fell sharply against the rising euro. China, by far the leading investor in African frontier markets, led this trend due to predicted increases in US interest rates which have yet to materialize.

Symptoms of global decline observed in more volatile emerging markets


Neil Shearing, head of emerging markets research at Capital Economics, stated that, “It is a bit of a bloodbath in equity markets. There are several things going on … the rise in oil prices, inflation expectations. Bond yields globally, including in emerging markets, have gone up and equity markets have come off the boil.” In some countries economic indexes are below the crisis levels set in 2008. Symptoms of global decline have been first observed in more volatile emerging markets.

China’s influence cannot be exaggerated. China’s decelerating growth struck fear among investors in emerging markets, from South Africa all the way to Malaysia. Equal with the fortunes of the world’s second-largest economic force, China’s financial grumbling reaches into pockets around the globe. Following an Asian recession and market meltdown, the Beijing government supported its own economy and stock market with a liquidity injection, but emerging market currencies cannot rely on such support. As a result, African markets now feel the domino effect.

Compliance failure could further jeopardize economic stability

African governments are taking stopgap measures to stem collapses. Nigeria, Africa’s top economy, froze its foreign exchange market, but this had the repercussion that it’s Naira was excluded from the influential JP Morgan bond index. The new currency crisis is increasing government debts as well, which reduces ability to comply with debt forgiveness specifications. Compliance failure could further jeopardize economic stability in many countries. Bond issues reveal yet another hedging mechanism already in play.

Bonds, commodities, and currencies are all near 16 year low figures. Stephen Bailey-Smith of Standard Bank Group Ltd. said, “Everyone’s putting on a helmet and just hoping to get through the day. African Eurobonds have been hit harder than average because they’re perceived as being more commodity-dependent.” Kenya’s shilling dropped 0.3 percent to 103.7 per dollar, the lowest closing since October 2011. And finance ministers claim that selling dollars on the currency market to compensate is not effective because speculators will quickly respond. African markets may have an opportunity to rally if the US Federal Reserve holds interest rates steady. Without a specific catalyst, African currency markets may be headed for a very long decline.

Read more

Energy Subsidy Reform In Gulf Nations

7 October 2015 Comments (0) Featured, Middle East, Politics

opec-oil-energy1

Gas price subsidies originally intended to level the playing field for the major oil producing nations now fall under heavy scrutiny for a variety of reasons. Reduction of fuel prices resulting from these subsidies leads to increased wasteful consumption and pollution. Reform policies now meet resistance from residential consumers and commercial interests. 

The six primary Gulf state producers all figure among the top 10 per capita energy consumers worldwide. While awareness is high among the producers that the subsidies desperately require reform, steps toward actual reform are gradual. Qatar, where gasoline and electricity subsidies are highest, is number one on the list, with 18,500 kg oil-energy-equivalence per capita, a level of consumption almost three times that of the USA or England.

Gas is so heavily subsidized in the Gulf States that consumers in Europe and America must find the prices shocking. Qatar, Bahrain, and Kuwait are all under $0.30 per liter as of the time of this writing. Although low fuel prices obviously bring about a trend of excessive and wasteful consumption, the big six producers’ lethargic reforms are not driven by a sense of urgency. Starting mid-2014, Qatar, Bahrain, and Kuwait raised diesel fuel prices by 50% with no fixed index, but rather with prices remaining a function of world market prices. Saudi Arabia has yet to establish any price reforms. 

GCC governments could once afford to subsidize energy prices and this works against reform today. When a falling oil price reduces profit there is additional resistance to subsidy reform. While in theory reducing subsidies should serve to diversify the industrial base of a country, it is not clear that this is a strong motivational force among the actual producers. After all it is a competitive force at work against reform. Awareness of other important factors is high, such as depletion of energy resources, damage to the environment, and slowed economic growth. But awareness does not lead to discipline, and energy consumption in the big six is higher than ever.

Less than $0.01 per kilowatt hour in Kuwait

Energy consumptionApproximately half of the subsidies are for electricity, and the growth rate in consumption of electricity here is approaching 10%. In Kuwait for example, the price of electricity is fixed at less than $0.01 per kilowatt hour. According to energy think tanks such levels of subsidisation and consumption are absolutely unsustainable. However with electricity consumption divided almost equally among commercial and residential interests, there is stalwart resistance to reform these programs which cap prices and keep consumers happy.

In countries like Saudi Arabia and Iran, subsidies for energy consumption are up to two to three times their expenditures for education and health care. Tempting though it may be to view this as a window on the way a society prioritizes its use of valuable resources, it is instead a residential consumer base of individuals devouring 58% of available electricity. Reduced air quality and other forms of environmental impact do not as yet serve to dissuade individual consumers from excessive use. 

UAE the first GCC country to eliminate price controls

Perhaps the most substantial step forward is United Arab Emirates’ announcement to deregulate transportation fuel prices in 2015. This makes UAE the first to eliminate price controls, and to take an extraordinary measure toward subsidy reform. This year with falling oil prices all of the GCC nations are under new pressure to institute subsidy reforms, especially in Saudi Arabia, where pre-tax energy subsidies to fiscal expenditure were more than 10% last year. 
As OPEC and IMF predict oil prices to remain below 2014 levels for at least the next five years, subsidy reform is clearly the mandate among the GCC nations. With consumption accelerating, the depletion of oil reserves and an inflationary rise in the cost of living may leave these energy-rich nations no alternative.

Read more

Africa and the Middle East: Going Mobile

1 October 2015 Comments (0) Business, Featured, Middle East

ME mobile

By Enu Afolayan, Contributor

Going mobile. That’s the tune businesses, and marketers, are singing in the Middle East and Africa as the end of 2015 nears. If you don’t have a plan or haven’t started one, for the mobile marketplace, then you are at risk at being a generation behind the competition. You’re still driving a moped while everyone else is passing you by in their sleek, new electric cars that are almost driving themselves. Moreover, they are working on an app for that.

The people of the MEA market are snatching up mobile devices at a rapid rate and are second only to the Asia-Pacific market as the largest users of mobile phones. According to eMarketer, an independent market research company, 606 million people in the region have at least one mobile phone. They expect an increase to over 789 million in 2019. That’s a lot of phones. That’s a lot of people with phones who use mobile services and are increasingly buying goods and other services with them.

(more…)

Read more