Unifying Africa's Data - The Worlds 8th Largest Economy
To start with, I needed a base from which to objectively analyze Africa. I just spent some time trying to understand Africa's global statistics and in the process, I discovered how difficult and completely disjointed the continents information is from the very start. Each country does it's own thing and measures by its own metrics. There is very little information from within Africa that measures African performance uniformly across the Continent. This is so disgraceful. Why must it be so complicated? Anyway, after reading several documents and an Excel sheet, it turns out that Africa's combined nominal GDP (based on IMF in 2016) is $2.2 trillion in 2016. Ranked against other world economies, that would rank Africa's economy as the 8th largest on earth, after India.
The combined population of Africa is 1.216 billion people, ranking it the 3rd most populous after India. As a non-economist, those two metrics alone say so much about the current and future prosperity of the African continent
Lack of Information Across Africa
My simple exercise highlighted a very interesting challenge Africa faces on information, that was succinctly presented by World Economics. There is very little quality information about unified Africa that is publicly available. The continent is simply far too disjointed and has embarrassingly poor global information. Government investment in central statistics and economic statistics within African nations is paltry and a by-the-way affair. Information is king in any negotiation, as anyone in an executive role would know. Yet, African nations negotiate on individual country basis asking for scraps, when an entire Continent could negotiate as one and strike totally different status in the negotiations and in our demands. Our lack of unified Continent information results in African nations always being short-changed in global trade deals. Divided and ruled.
My simple exercise highlighted a very interesting challenge Africa faces on information, that was succinctly presented by World Economics. There is very little quality information about unified Africa that is publicly available. The continent is simply far too disjointed and has embarrassingly poor global information. Government investment in central statistics and economic statistics within African nations is paltry and a by-the-way affair. Information is king in any negotiation, as anyone in an executive role would know. Yet, African nations negotiate on individual country basis asking for scraps, when an entire Continent could negotiate as one and strike totally different status in the negotiations and in our demands. Our lack of unified Continent information results in African nations always being short-changed in global trade deals. Divided and ruled.
What Are We Losing?
It's worth noting that Africa contributes an estimated 2% of world International trade. Over 90% of international trading consists of currency futures, of which Africa is almost non-existent. Africa trades in "real commodities", where it contributes about 70% of the world strategic minerals like gold, aluminium and lately agriculture. Then again, Africa notoriously sells raw materials to only buy it back at super premium rates, therefore losing again to the currency futures.
Inter Africa trade is dismal. African countries would rather trade with Western and Eastern nations than their neighbours. Police harassment within African borders and checkpoints, expensive inter-continent travel costs (example: it's cheaper to fly from Kenya to China than from Kenya to Zimbabwe) and dire inter-country road and rail infrastructure all contribute to it being cheaper and easier to trade internationally than within the continent.
It's worth noting that Africa contributes an estimated 2% of world International trade. Over 90% of international trading consists of currency futures, of which Africa is almost non-existent. Africa trades in "real commodities", where it contributes about 70% of the world strategic minerals like gold, aluminium and lately agriculture. Then again, Africa notoriously sells raw materials to only buy it back at super premium rates, therefore losing again to the currency futures.
Inter Africa trade is dismal. African countries would rather trade with Western and Eastern nations than their neighbours. Police harassment within African borders and checkpoints, expensive inter-continent travel costs (example: it's cheaper to fly from Kenya to China than from Kenya to Zimbabwe) and dire inter-country road and rail infrastructure all contribute to it being cheaper and easier to trade internationally than within the continent.
The Effects of Un-Unified Information
I’m convinced that the lack of unified information is intentionally designed. Divide and Rule! Focus is on African economies operating as individual countries. Keeping them dark on their global advantages. Keeping their leaders focused on their own individual myopic country situations. Keeping politics and economics at village mentality. A coup or two and insurgency would also help.
Sadly, most of our African political and entrepreneurial leaders have a caveman "me-eat-first" mentality. Corrupt, inept and nepotistic, they take the most self-profitable route first, before Country and peoples prosperity. Governance is largely a joke with most anti-corruption agencies either party to the game or destroyed if they stick their necks up. That is the stereotype we have to eradicate - and we shall.
I’m convinced that the lack of unified information is intentionally designed. Divide and Rule! Focus is on African economies operating as individual countries. Keeping them dark on their global advantages. Keeping their leaders focused on their own individual myopic country situations. Keeping politics and economics at village mentality. A coup or two and insurgency would also help.
Sadly, most of our African political and entrepreneurial leaders have a caveman "me-eat-first" mentality. Corrupt, inept and nepotistic, they take the most self-profitable route first, before Country and peoples prosperity. Governance is largely a joke with most anti-corruption agencies either party to the game or destroyed if they stick their necks up. That is the stereotype we have to eradicate - and we shall.
The Price for Unrecorded Incomes
Too much unrecorded trade happens in Africa. In Sub-Saharan Africa, small family shops, makeshift kiosks and table tops still contribute about 90% of our retail trading space. In this micro-trade, you will rarely find till-points or digital performance tracking systems. Minerals like gold and diamonds are mined and leave the country with limited recording of the value added into the economy. The tax revenue loss is immeasurable. There again are limited statistics and big data on their sales. New entrepreneurs come and fold within 2 years because of lack of mentoring and information; with even less records maintained. Can you imagine the loss of government revenue, the loss of country resources, the loss on tax revenue, the loss on big data information, the losses caused by disunity, the additional infrastructure and wastage in supply chain and the loss on industries and jobs?
Too much unrecorded trade happens in Africa. In Sub-Saharan Africa, small family shops, makeshift kiosks and table tops still contribute about 90% of our retail trading space. In this micro-trade, you will rarely find till-points or digital performance tracking systems. Minerals like gold and diamonds are mined and leave the country with limited recording of the value added into the economy. The tax revenue loss is immeasurable. There again are limited statistics and big data on their sales. New entrepreneurs come and fold within 2 years because of lack of mentoring and information; with even less records maintained. Can you imagine the loss of government revenue, the loss of country resources, the loss on tax revenue, the loss on big data information, the losses caused by disunity, the additional infrastructure and wastage in supply chain and the loss on industries and jobs?
As African countries wake up to the realization of this gap, it is no wonder that they continue to rebase their GDP. They “discover” new income streams from already existing industries in their countries. They are introducing E-Citizen and E-Collection systems for Government transacting and reducing opportunities for Corruption and finance leakages. Governments across Africa today spend thousands of hours investing in infrastructure projects that are important, but overpriced due to correuption. Cirital value contracts are l given to foreign countries and mainly China. These foreign nations enter with their resources and labour, then build or extract resources at cost. They charge for the services with a markup or interest and repatriate the revenue back to their country. It's good business for them, Africa's infrastructure and quality of life improves, but Africa is left with a financial deficit every time.
I get why Trump won. Or why Brexit happened. Their low income populations are fed up with seeing the "mining" of their resources, repatriation of opportunities, loss of jobs and limited returns at the lowest tiers of the society. As Africans, we wish for the same election outcomes, but we know we won't see so many of those free, fair and smooth election transitions. Smooth election expectations would be naive considering the relationship of African politics to personal wealth creation
The Role Of For-Profit Enterprises In Gathering Africa Information
Africa must unite. This is not a call to governments or the African Union, (while acknowledging that they still have an important role). This is a call to private for-profit African companies. We already have a proliferation of proudly African innovations that are revolutionising how the world works, like Mpesa that is launching and gaining popularity around the world. Innovative African apps for farming. A Kenyan app Ushahidi was recently used in the Indian and American elections.
Africa must unite. This is not a call to governments or the African Union, (while acknowledging that they still have an important role). This is a call to private for-profit African companies. We already have a proliferation of proudly African innovations that are revolutionising how the world works, like Mpesa that is launching and gaining popularity around the world. Innovative African apps for farming. A Kenyan app Ushahidi was recently used in the Indian and American elections.
Why can't we combine for-profit infrastructure and apps, that can measure real-time information of what's happening in Africa. Information that we can buy or sell to make business decisions, to negotiate with international agencies on a global scale and to present to the world economies. Why can't we have African and World News agencies announce Total African Economic Results like Quarterly Africa Jobs data, Africa GDP growth data, Africa Currency Average Floats and Africa Stock Volume Traded, Africa Mineral Pricing and Africa Mineral Volumes traded, Africa Retail Data. Match that data versus World Trade comparisons. We can start small. More innovation will come from that. Combining African information commercially, would then build an African Union Market; as powerful as the Dow Jones, London Mineral Market (who ironically don't extract any minerals), New York Stock market etc.
Governments won't do this. The disjointed IMF and World Bank statistics I Googled won't help. It is up to African smart entrepreneurs and industry to take the initiative, start building the data and influence the currently only-politics-focused AU to realize that quality global and readily available Economic information is the first key to winning any international negotiation.
Africa is stronger and more respectable with readily available world class unified information
Farayi Ziswa is a consultant on retail trade and route-to-market retail strategies within Eastern and Southern Africa. Get in touch...
Farayi Ziswa is a consultant on retail trade and route-to-market retail strategies within Eastern and Southern Africa. Get in touch...
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