Ethiopia and Mauritius show there is no single formula for putting a country on the road to progress.
Both Ethiopia and Mauritius are members of the African Union (AU) and the Common Market for Eastern and Southern Africa (COMESA). Apart from these links, it’s difficult to see much similarity between the landlocked Ethiopia which stretches over more than a million square kilometers and the small island nation of Mauritius.
What they have in common is that they have found a way to improve their economies. To do that, both nations’ politics needed to be less fractious. Mauritius has achieved that. Ethiopia shows signs that it is on the way to stability.
The other common denominator is textile manufacturing, although the two countries approached the opportunity from opposite ends. Mauritius chose to focus on the high-end market and has developed the skills and quality-control protocols needed to supply that niche. Ethiopia is building a sector which can handle huge volumes. A Bangladeshi garment manufacturer has set up a factory in Ethiopia which supplies H&M and a Sri Lankan company, Hela Clothing, has produced and shipped its one-millionth garment from its factory in Ethiopia. This is part of a drive by Ethiopia to increase its annual export earnings in clothing from $145-million to $30-billion (CNN).
In terms of a financial market index published by Absa in 2019, the two countries are at opposite ends of the scale. The survey concluded that Mauritius ranked second in Africa (behind South Africa) in a set of indicators including market depth, access to foreign exchange and transparency. Ethiopia placed 20th but – crucially and typically in the current environment – Ethiopia was sure to improve its position in 2020 because it is about to establish a stock exchange.
Reforms in Ethiopia are just beginning, Mauritius has been a work in progress for several decades.
Ethiopia
The Nobel Peace Prize winner for 2019 was Ethiopian Prime Minister Abiy Ahmed. He won the award primarily for unblocking a post-war stalemate between his country and Eritrea and calming other regional conflicts, but he has also made big changes domestically since taking office in 2018.
In the words of the Director of the Institute for Pan-African Thought and Conversation Adekeye Adebajo, Ahmed has been a “reformist new broom unleashing political freedoms, encouraging foreign investment and promoting reconciliation”.
The peace dividend has allowed the construction of a vital rail link to Djibouti and encouraged a number of new investors to visit Ethiopia, mostly notably from Turkey. Chinese companies have long been present in the country, with the previous rulers of Ethiopia having been close to China.
Ethiopian Airways has used the country’s strategic location between Asia and Europe to build Addis Ababa’s position as a freight and passenger hub. So successful has it been that in 2018 it replaced Dubai as the top transit hub for long-haul passengers to Africa.
The country’s population of about 94-million is young (about 50% are younger than 15 and 70% are younger than 30) and the state is focused on education. Science and technology are emphasised and the number of Ethiopians in higher education in 2017 was five times what it was in 2005 (World Bank).
Spending on public infrastructure has focussed on transport, energy and industrial parks. The percentage of public spending is due to come down, but it will be replaced by the private sector as a vigorous privatisation process begins. Manufacturing currently accounts for 10% of GDP so there is huge scope for growth. Other state-owned assets which will become available to private investors are in the following sectors: maritime, aviation, electricity, logistics and railways. Exports in renewable energy are expected to generate up to $1-billion annually.
Mauritius
Although Mauritius ranked second to South Africa in the Absa Financial Market Index, in almost every other index the island country is ranked number one in Africa.
For “Doing Business in Africa: Sub Saharan Africa 2018”, the World Bank places Mauritius 25th in the world, and first in Africa. The Heritage Foundation’s 2019 “Index of Economic Freedom” has exactly the same result. This trend is repeated across a range of measures; a global competitive index rates the country 45th and 1st, the WEF’s enabling trade report gives scores of 39th and 1st.
Where the country’s GDP per capita was around $400 at independence in 1968, it’s now above $10 000. Between 1977 and 2008, the country’s growth rate performed well above the Sub-Saharan average of 2.9%, at 4.6%.
As a colony Mauritius was a sugar-based mono-culture. Sugar accounted for 20% of GDP and 60% of exports. Today sugar cane is still in the export basket but there are also textiles, clothing, processed fish and cut flowers. Services exports such as financial services and tourism are rising, and medical tourism and higher education are seen as a high-value sectors worth investing in.
The African Development Bank (AfDB) expects growth of more than 5% in several sectors including information and communications technology, retail and wholesale, food processing and financial services. In 2016 the Kenyan economy received $50-million of investment from Mauritius-based banks and financial institutions (AfDB).
Mauritian post-independence politics was not always stable, but a parliamentary system and strong institutions have helped the country move forward. Property rights and an independent judiciary are factors that promote foreign investment. Shrewd investment in an Export Processing Zone helped to turn the economy away from a single commodity. Personal and corporate tax rates are a flat 15% and in 2018 property transfers were simplified and other reforms were introduced to encourage entrepreneurs.
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.
Sources: [1], [2]. Image sources: [1], [2].
South African Government’s Statement on COVID-19
The first case of COVID-19 in South Africa has been officially confirmed.
In a statement, the Department of Health said:
“Fellow South Africans, this morning, Thursday March 5, the National Institute for Communicable Diseases (NICD) confirmed that a suspected case of COVID-19 has tested positive. The patient is a 38-year-old male who travelled to Italy with his wife. They were part of a group of 10 people and they arrived back in South Africa on March 1, 2020.
The patient consulted a private general practitioner on March 3, with symptoms of fever, headache, malaise, a sore throat and a cough. The practice nurse took swabs and delivered it to the lab. The patient has been self-isolating since March 3. The couple also has two children.
The Emergency Operating Centre (EOC) has identified the contacts by interviewing the patient and doctor. The tracer team has been deployed to KwaZulu-Natal with epidemiologists and clinicians from NICD. The doctor has been self-isolated as well”.
The South African Parliament is busy debating South Africa’s preparedness for COVID-19.
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.
Sources: [1], [2]. Image sources: [1], [2].
Invest Cape Town: This is Africa’s Tech Hub
This article is the opinion of Invest Cape Town, and was published by Global Africa Network.
Welcome to a wealth of opportunities in Africa’s DigiTech hub.
Cape Town is the undisputed DigiTech hub of Africa and a leading location for technology start-ups, venture capital deals and software companies. The city of Cape Town, including Stellenbosch, is now home to approximately 550 entrepreneurial enterprises that work in software development, e-commerce, information technology and many other DigiTech sectors.
In fact, the Cape Town DigiTech industry employs between 40–50 000 people. This is significantly more than the tech sectors in Lagos and Nairobi, which employ 9000 and 7000 people respectively (Evaluation and Network Analysis of the Cape Town-Stellenbosch Tech Sector Report, 2018).
This part of South Africa also boasts the privilege of being home to the headquarters of global internet giant, Naspers. As Africa’s highest-valued tech company, it is a massive tech investor on an international scale buying into companies like Tencent and many others.
The DigiTech Ecosystem in Cape Town
It’s interesting to note that Cape Town does actually have fewer DigiTech companies, including fewer software start-ups, when compared to either Nairobi or Lagos.
However, even with fewer enterprises, the entrepreneurial and DigiTech ecosystems here have worked in hand-in-hand to accelerate meaningful job creation in Cape Town. Companies in the city generate an objectively higher level of productivity than their African counterparts combined.
“While only 1% of companies founded in the past decade have reached 100 employees or more in Lagos, and less than 1% in Nairobi and Johannesburg. 11, 3% of the companies founded in the past decade have reached this level of scale in Cape Town. This is a critical indicator of the dynamism of the sector, (Endeavor 2019).”
Cape Town’s Competitive Advantages in DigiTech
The dynamism, productivity and high-impact companies of Cape Town’s information technology sector make it stand out as one of the most successful models in Sub-Saharan Africa. Competitive advantages in this industry include:
Competitive advantages of Cape Town as an IT location
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.
Sources: [1], [2]. Image sources: [1], [2].
Mauritius and Ethiopia: Success Comes in Many Guises
Ethiopia and Mauritius show there is no single formula for putting a country on the road to progress.
Both Ethiopia and Mauritius are members of the African Union (AU) and the Common Market for Eastern and Southern Africa (COMESA). Apart from these links, it’s difficult to see much similarity between the landlocked Ethiopia which stretches over more than a million square kilometers and the small island nation of Mauritius.
What they have in common is that they have found a way to improve their economies. To do that, both nations’ politics needed to be less fractious. Mauritius has achieved that. Ethiopia shows signs that it is on the way to stability.
The other common denominator is textile manufacturing, although the two countries approached the opportunity from opposite ends. Mauritius chose to focus on the high-end market and has developed the skills and quality-control protocols needed to supply that niche. Ethiopia is building a sector which can handle huge volumes. A Bangladeshi garment manufacturer has set up a factory in Ethiopia which supplies H&M and a Sri Lankan company, Hela Clothing, has produced and shipped its one-millionth garment from its factory in Ethiopia. This is part of a drive by Ethiopia to increase its annual export earnings in clothing from $145-million to $30-billion (CNN).
In terms of a financial market index published by Absa in 2019, the two countries are at opposite ends of the scale. The survey concluded that Mauritius ranked second in Africa (behind South Africa) in a set of indicators including market depth, access to foreign exchange and transparency. Ethiopia placed 20th but – crucially and typically in the current environment – Ethiopia was sure to improve its position in 2020 because it is about to establish a stock exchange.
Reforms in Ethiopia are just beginning, Mauritius has been a work in progress for several decades.
Ethiopia
The Nobel Peace Prize winner for 2019 was Ethiopian Prime Minister Abiy Ahmed. He won the award primarily for unblocking a post-war stalemate between his country and Eritrea and calming other regional conflicts, but he has also made big changes domestically since taking office in 2018.
In the words of the Director of the Institute for Pan-African Thought and Conversation Adekeye Adebajo, Ahmed has been a “reformist new broom unleashing political freedoms, encouraging foreign investment and promoting reconciliation”.
The peace dividend has allowed the construction of a vital rail link to Djibouti and encouraged a number of new investors to visit Ethiopia, mostly notably from Turkey. Chinese companies have long been present in the country, with the previous rulers of Ethiopia having been close to China.
Ethiopian Airways has used the country’s strategic location between Asia and Europe to build Addis Ababa’s position as a freight and passenger hub. So successful has it been that in 2018 it replaced Dubai as the top transit hub for long-haul passengers to Africa.
The country’s population of about 94-million is young (about 50% are younger than 15 and 70% are younger than 30) and the state is focused on education. Science and technology are emphasised and the number of Ethiopians in higher education in 2017 was five times what it was in 2005 (World Bank).
Spending on public infrastructure has focussed on transport, energy and industrial parks. The percentage of public spending is due to come down, but it will be replaced by the private sector as a vigorous privatisation process begins. Manufacturing currently accounts for 10% of GDP so there is huge scope for growth. Other state-owned assets which will become available to private investors are in the following sectors: maritime, aviation, electricity, logistics and railways. Exports in renewable energy are expected to generate up to $1-billion annually.
Mauritius
Although Mauritius ranked second to South Africa in the Absa Financial Market Index, in almost every other index the island country is ranked number one in Africa.
For “Doing Business in Africa: Sub Saharan Africa 2018”, the World Bank places Mauritius 25th in the world, and first in Africa. The Heritage Foundation’s 2019 “Index of Economic Freedom” has exactly the same result. This trend is repeated across a range of measures; a global competitive index rates the country 45th and 1st, the WEF’s enabling trade report gives scores of 39th and 1st.
Where the country’s GDP per capita was around $400 at independence in 1968, it’s now above $10 000. Between 1977 and 2008, the country’s growth rate performed well above the Sub-Saharan average of 2.9%, at 4.6%.
As a colony Mauritius was a sugar-based mono-culture. Sugar accounted for 20% of GDP and 60% of exports. Today sugar cane is still in the export basket but there are also textiles, clothing, processed fish and cut flowers. Services exports such as financial services and tourism are rising, and medical tourism and higher education are seen as a high-value sectors worth investing in.
The African Development Bank (AfDB) expects growth of more than 5% in several sectors including information and communications technology, retail and wholesale, food processing and financial services. In 2016 the Kenyan economy received $50-million of investment from Mauritius-based banks and financial institutions (AfDB).
Mauritian post-independence politics was not always stable, but a parliamentary system and strong institutions have helped the country move forward. Property rights and an independent judiciary are factors that promote foreign investment. Shrewd investment in an Export Processing Zone helped to turn the economy away from a single commodity. Personal and corporate tax rates are a flat 15% and in 2018 property transfers were simplified and other reforms were introduced to encourage entrepreneurs.
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.
Sources: [1], [2]. Image sources: [1], [2].
Plans for East African Single Currency 2024 Launch Well Underway
The East African Community Partner States are in the process of harmonizing critical policies and putting in place the requisite institutions to attain a single currency for the region by 2024 as outlined in the EAC Monetary Union Protocol.
EAC Secretary General Amb. Liberat Mfumukeko said that the Bill for the establishment of the East African Monetary Institute (EAMI) had already been assented to by the Summit of Heads of State, adding that the EAMI would later be transformed into the East African Central Bank that would issue the single currency.
“The establishment of this institute will help to provide impetus towards the formation of the East African Monetary Union, which is the third pillar of our integration,” said Amb. Mfumukeko.
Amb. Mfumukeko disclosed that the Council of Ministers had approved the EAC Domestic Tax Harmonization Policy, adding that proper implementation of the policy would reduce tax competition thereby enhancing cross-border trade and investment in the region.
On the Financial Sector, the SG said that the Community had developed requisite legal instruments (Bills) for the insurance and micro-finance sub-sector and strategies for implementation of financial education and insurance certification.
“Further, we implemented the financial market infrastructure for payment and settlement systems as well as finalized regional regulations for portability of pension benefits and consumer protection,” he added.
Amb. Mfumukeko was giving his New Year’s Address to the Staff of EAC Organs and Institutions spread across East Africa from the EAC Headquarters in Arusha, Tanzania. He said that Community would have in place an EAC Investment Helpdesk and a Buyer-Seller Online Platform by June 2020.
“Both facilities will increase intra-EAC trade by creating awareness and markets for products manufactured within the EAC region.”
The Community, with US$20 million support spread over five years the World Bank, had also operationalized an EAC Statistics Development and Harmonization Regional Project.
“The project will support production of quality and harmonized statistics in the region through capacity building in the National Statistical Offices of the Partner States and the EAC Secretariat as well as support the establishment of the EAC Bureau of Statistics,” said Amb. Mfumukeko.
On the East African Court of Justice, the SG disclosed that sub-registries opened in the Partner States’ capital cities had elevated the visibility of the Court and reduced the costs of litigation and access to justice to the citizens of the Community.
“The residents can now easily take advantage of the Court and have their disputes resolved. In addition, the finalization of the review of the EACJ Rules of Procedure in 2019 will now provide seamless procedures to the benefit of the litigants,” said Amb. Mfumukeko.
On fisheries, the SG revealed that the Lake Victoria Fisheries Organization (LVFO) updated the status of fish stocks on the lake registering a 21% increase in total biomass to 2.68 million metric tonnes between 2018 and 2019.
“The Nile Perch population increased by 48%, from 0.55 million to 0.82 million metric tonnes over the same period. LVFO also revised Co-Management Guidelines for Lake Victoria, which provide for enhanced participation of stakeholders in fisheries management as well as capacity of fish traders and inspectors to promote market access, improved revenue collection and enhanced fish quality and safety assurance.”
LVFO received funds from the EU for a Start-up Phase of ECOFISH Project to enable consultations with key stakeholders to facilitate development of the detailed program for enhancing regional policies and institutional frameworks.
The SG urged all EAC Staff to rededicate themselves to serving the region, a task he described as a privilege, adding that they had been recruited competitively based on their unique skills and expertise.
For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.
Sources: [1], [2]. Image sources: [1], Michael Longmire [2].