Hi, Quartz Africa readers!
Complexifier
We often talk in our editorial meetings about answering big questions on African business and innovation. It’s our way of trying to sharpen our focus when covering an economically and politically diverse continent with 55 countries.
To be frank, it helps journalists to know how to answer big, simple questions, because many of our readers are busy and want help in explaining the world—particularly regions and sectors with which they’re less familiar. One typical query we get is, “Where would you invest in Africa right now?”
Of course, there is no simple or straightforward way to answer that question and journalists probably want to avoid seeming to be investment experts. One of the reasons it’s difficult to answer is the metrics which are most relevant vary from investor to investor. In our fast-evolving world even established broad measures like gross domestic product are being challenged, particularly in the African context where the informal market often gets underestimated or overlooked.
From a corporate perspective the ‘where do I invest now’ question is often about where to expand operations and how to navigate past the pitfalls of unfamiliar markets—this is particularly important for African countries keen to attract foreign direct investment. While the World Bank’s Ease of Doing Business index has become a useful tool to help manage corporate expectations, a new metric takes a different global approach by grouping countries based on the complexities of their business environments.
The first Global Markets Complexity Index (GMCI), developed by Wilson Peruma, assesses 83 countries across 31 measures of market, operational, and regulatory complexity, and places them into eight country groups with “distinct complexity profiles.”
“One thing we’ve seen is a lot of large companies really struggle as they expand to new geographies so they end up creating more costs risks and not growing the top line as much as they intended,” says Stephen Wilson, whose firm specializes in advising private equity firms and corporates.
So in Group 1 (“MVPs”) they have countries like the United States and Australia, while India, Kenya and South Africa are in Group 6 (“The Builders”) but Nigeria, Zimbabwe, Pakistan and Bangladesh are in Group 8 (“Only the Brave”).
Perhaps unsurprisingly, the sub-Saharan African countries on the list are in the most complex markets, Groups 5 to 8. The key challenge in many of these more complex countries is regulatory say the authors, both having too much and too little regulation in an unpredictable environment vulnerable to corruption and bias.
Though it’s the first edition of the report it already provides additional nuance in helping to answer that question for investors and corporates trying to find their way in less developed markets where size and market potential isn’t as simple as it looks on paper.
— Yinka Adegoke, Quartz Africa editor
Stories from this week
Nigeria’s delayed presidential elections get underway. After a one week delay, Nigeria’s presidential elections finally kicked off amid hitches in parts of the country. The decision to delay the vote over logistical problems has had significant impact over the past week disrupting economic activities, even hobbling wedding plans. But the consensus among observers is it’s become much harder to rig the polls thanks to new technology.
Amazon is targeting Kenyan shoppers who want to pay in cash. The e-commerce giant has rolled out a service in Kenya which enables customers to buy goods with cash through Western Union. The move is similar to ventures undertaken by Google and Uber in Africa, which prioritize cash over card payments.
Kenya’s plan to store its citizens’ DNA is facing massive resistance. The Kenyan government launched a program aimed at collecting the biometric data of its nearly 50-million people, including storing their DNA data. As Abdi Latif Dahir reports, the secrecy and confusion surrounding the central population register have been criticized by civil libertarians and human rights lawyers.
Burkina Faso’s influential film festival has survived DVDs and now terrorism. Held in Ouagadougou, a city that practically exalts African cinema, Fespaco is a truly Pan-African festival that celebrates independent cinema in a struggling industry. Now, even as Burkina Faso faces increasing terrorist attacks, as Lynsey Chutel writes the biennial festival is determined to celebrate 50 years of African cinema.
How two Eritrean brothers built a solar power business in some of Africa’s riskiest markets. Metkel and Ghirmay have bootstrapped their way across countries including South Sudan, DR Congo and Central African Republic, building a solar power startup that now employs over 50 full time employees. Their dream is to one day soon open their business back home in Eritrea, they tell James Courtright.
Sudan’s president isn’t going anywhere just yet. For more than two months now, Sudan has blocked social media access and clamped down on street protests calling for the end of president Omar al-Bashir’s three-decade rule. On Friday night (Feb. 23), Bashir responded by instituting a state of emergency and dissolving both central and federal governments.
Chart of the Week
Uganda’s social media tax is keeping its citizens offline. Last year, Uganda’s government introduced a daily tax on 60 websites and social media platforms including popular messaging apps like WhatsApp and Facebook. State data now shows the ad hoc fees, along with levies on mobile money use, led to a decline in internet use along with decreased financial inclusion.
Other Things We Liked
How foreign aid fuels African media’s payola problem. In many African countries, a dirty secret of journalism is some reporters earn most of their income from payments by their sources. But what is rarely covered is that the international aid community is among the most prolific payers, writes Prue Clarke for Project Syndicate.
The door-to-door strategy to mainstream family planning in northern Nigeria. Over 90% of partnered women in northern Nigeria do not use any form of contraception making the country’s population boom more prominent in the region than anywhere else. But that might be slowing changing as, in The Christian Science Monitor, Ryan Lenora Brown highlights the growing impact of contraceptive saleswomen going door-to-door across the region.
ICYMI
Boosting West African entrepreneurs. The Young African Leadership Initiative will provide seed capital and mentoring to young businesspeople to innovate and expand their start-ups and business ventures. (Apr. 5)
Scholarships at Makerere University. The Ugandan university will provide 455 undergraduate scholarships to African students from disadvantaged backgrounds. (May 10)
Keep an eye on
Senegal elections (Feb. 24). More than 6.6 million voters will vote in a presidential election where the incumbent leader Macky Sall is favored to win.
Nigeria election results (Feb. 25-26). The electoral body is expected to start announcing the first results of Saturday’s contested general elections.
*This brief was produced while listening to Khauleza by Dorothy Masuka (Zimbabwe/South Africa). Rest in Peace.
Our best wishes for a productive and thought-filled week ahead. Please send any news, comments, suggestions, Fespaco tickets and Kenya DNA banks to africa@qz.com. You can follow us on Twitter at @qzafrica for updates throughout the day.
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