Wednesday, 22 May 2013
Photo coutesy: southafrica.net
There has been a lot of doubt about Africa's economic boom. There are many sceptics but the evidence is overwhelming. Here is proof (without the numbers).
1. The resource boom.
2. The construction boom.
3. The emergence of a middle class, though, still very small but with potential for growth.
4. The boom in financial services.
5. The boom in education services.
6. Greater demand for fast moving consume goods (washing powder, fabric softener, etc).
7. Multinational companies entering Africa (e.g. Wal-Mart's acquisition of South Africa's Massmart and Barclays Bank's acquisition of South Africa's ABSA Group).
8. The rise i the number of Africa-focussed private equity firms.
9. New scramble for Africa by China. South Korea, India, Brazil and even Russia.
10. Africa entrepreneurs venturing into many businesses e.g. SoleRebels.
11. African companies crossing borders e.g. Zambia's Zambeef Products PLC is now in Ghana and Nigeria.
Of course Africa still has a long way to go. There are many risks like a commodities crash and political instability (Central African Republic , Nigeria, Mozambique etc).
Friday, 3 May 2013
Africa has a serious underemployment problem. This problem can be addressed by better use of YouTube and other related sites.
Africa's unemployment problem is mostly lack on an industrial base and lack of skills among mostly youths.
Each year Africa's schools churn out millions of youth with little or no skills of value to industry. Unfortunately there are very few trade schools and technical universities that can impact skills these youths need to survive in the real world.
What is YouTube?
YouTube is a video-sharing platform that allows people across the world to publish videos that can be seen by anyone with an Internet connection.
YouTube and Technical Skills
While YouTube has many videos, most of which are frivolous, there are many others that are technical. From these videos African youths can learn technical skills that can be used for self-employment.
Here are some examples;
Installing air conditioners
Making Bamboo Furniture
Anyone with time can learn these skills and start a business without expensive certifications.
YouTube and Business Models
YouTube has also lots of videos on certain business models that African youths can learn and start a business.
Here are some examples;
Making Corn Syrup
How to Download YouTube Videos
Unfortunately YouTube was not designed to allow users to download and store these videos.
However, you can download the videos with certain type on software. Find out more.
Alternatives to YouTube
There are other video-sharing sites like DailyMotion, Vimeos etc.
There are also many DIY sites that showcase skills like MadeHow, EHow, HowStuffIsMade and Instructables.
Reaching Out to Africa's Facebook Generation
Millions of African youth are on the Internet, mainly Facebook, wasting time.
YouTube is what they need to create their own jobs.
Friday, 26 April 2013
Africa is so blessed with natural resources but is losing billions, if not trillions, by failing to process these resources and instead exports raw commodities.
Instead of exporting raw cocoa beans Africa needs to start making finished products that have higher value.
Monday, 8 April 2013
It is amazing how much of Africa's wealth is offshore.
Tax Justice Network research shows an estimated $7.3tn-$9.3tn of offshore wealth is held by developing world residents – double their countries' $4tn external debt
This in my view offers huge opportunities for wealth management for African entrepreneurs. It seems only Mauritius is tapping into this dollar market on the Africa continent. Mauritius also serves the Indian high net worth market.
What is Wealth Management
1. Wealth management involves provision of financial services provided to wealthy clients, mainly individuals and their families, typically with $100,000+ investable assets.
2. Wealth management has a greater emphasis on financial advice and is concerned with gathering, maintaining, preserving, enhancing and transferring wealth.
What Services are Provided by a Wealth Manager
2. Core banking-type products
3. Lending products, such as margin lending, credit cards, mortgages and private jet finance.
4. Insurance and protection products, such as property and health insurance, life assurance and pensions.
5. Asset management in its broadest sense: discretionary and advisory, financial and non-financial assets (such as real estate, commodities, wine and art), conventional, structured and alternative investments.
6. General wealth ranging from asset allocation, wealth structuring, tax and trusts, various types of planning (financial, inheritance, pensions, philanthropic) and family trusts.
7. A wide range of caretaker-type services, including yacht broking, art storage, real estate location (castles, mansions, private islands etc), and hotel, restaurant and theater booking.
What is Offshore Wealth Management
1. Offshore wealth management is tailored to clients wishing to manage their wealth outside their main country of residence for reasons such as: financial confidentiality; legal-system flexibility; tax considerations; the lack of appropriate products and services onshore; a low level of trust in domestic financial markets and governments; and the need for safety and geographical diversification in response to domestic political and macroeconomic risks.
2. A Swiss bank catering to American clients is an example of offshore wealth management.
What is Onshore Wealth Management
1. Onshore wealth management is the provision of products and services within the client’s main country of residence.
2. An American private bank handling the wealth of US citizens is an example of onshore wealth management.
Wealth Management Fees
The wealth manager is generally paid on the basis of a flat-fee arrangement linked to the value of the assets under management.
What is a High Net Worth Individual
1. High net worth individuals (HNWI) are those people with $1 million or more in investable assets.
2. High net worth individuals can further be broken into three groups; high net worth (HNW), very high net worth and ultra high net worth.
How High Net Worth Individuals Invest
1. HNWIs usually entrust the management of their assets to wealth managers and private bankers. Wealth managers and private bankers provide HNWIs with other services such as estate and tax planning.
2. Some HNWIs have set up so-called family offices to manage their wealth and other people.
3. Some ultra high net worth individuals even manage their own wealth and of others. An example is Warren Buffet who runs the investment fund Berkshire Hathaway.
4. Unlike ordinary investors HNWIs are able to invest in a wider range of assets types like alternative investments that include art and hedge funds.
Global High Net Worth Trends
1. According to a 2011 report by the Swiss wealth manager Julius Baer the wealth of high net worth individuals (HNWI), those with $1 million or more in investable assets, would nearly triple to $15.8 trillion by 2015.
2. The report also states that Asia will add 1.66 million dollar-millionaires by 2015, taking the total number of wealthy to 2.82 million as the world’s fastest-growing major economies of China and India continue to mint millionaires.
3. China alone would be home to nearly half of the millionaires in Asia with a combined wealth of $8.8 trillion. The world’s most populous nation had 502,000 HNWIs with investable assets totaling $2.6 trillion, the report said. This number of HNWIs is forecast to rise to about 1.4 million. India would more than double the number of HNWIs to 403,000 by 2015.
Friday, 15 March 2013
"Empire of Debt" is a book written by financial authors Bill Bonner and Addison Wiggin subtitled "The Rise of an Epic Financial Crisis." The latest edition is titled "The New Empire of Debt."
"The New Empire of Debt" is the newly updated revision of Empire of Debt, by the internationally acclaimed author team of William Bonner and Addison Wiggin. In The New Empire of Debt, Bonner and Wiggin return to reveal how the epic financial bubble that is plaguing the United States will soon bring an end to this once-great empire.
Throughout the book, they offer a frightening look at the United States’ precarious position and discuss how government control of the economy and financial system— combined with unfettered deficit spending and gluttonous consumption—has ravaged the business environment, devastated consumer confidence, and pushed the global economy to the brink.
Along the way, Bonner and Wiggin warn of the dangers that lie ahead and offer practical advice to protect your financial well-being as the American empire collapses upon itself. You’ll discover that you don’t have to tie your own fate to the inevitable destruction of America’s system of imperial finance. Instead, you can take some simple steps to weather the crisis. Bonner and Wiggin have been studying the financial landscape for more than twenty years. With "The New Empire of Debt", they not only show you how we got into this mess, but how to get yourself out of it.
Empire of Debt - Lowdown
Among the many things the book looks at is debt - deficit spending to be more specific and how debt threatens the American Dream. The book is timely in light of recent developments mainly America's ballooning national debt and the standoff at Capitol Hill over spending and cuts. In simple language the American Dream financed by debt is becoming unaffordable at federal, state and individual level. Sooner or latter this is becoming more apparent with the Financial Crisis of 2007/2008 as well as the recent downgrade of America' sovereign rating from AAA to AA+ plus a negative outlook by Standard & Poor (S&P).
The debt problem is bipartisan. Democrats have traditionally favoured big government spending - from President Franklin Delano Roosevelt's New Deal to President Lyndon Baines Johnson's Big Society to President Barack Obama's Obamacare - all of which cost money. On the other hand Republican are for smaller government but big military spending like the massive arms buildup under President Ronald Reagan in the 1980s - that also cost money.
In addition America's trade deficits with other nations like China are another source of concern.
The book is a must-read for American leaders and the ordinary person. Simply put debt is unsustainable. For a nation founded by frugal Puritans it is amazing how America had developed an addiction for debt.
Empire of Debt - About Authors
Bill Bonner is President and CEO of Agora, Inc., one of the world’s largest financial newsletter companies. Agora has offices in several countries. Bonner is an international bestseller and his other book include Mobs, Messiahs and Markets, Financial Reckoning Day and Dice Have No Memory Big Bets and Bad Economics from Paris to the Pampas.
Addison Wiggin is the Editorial Director and Publisher of The Daily Reckoning - a newsletter now has more than 500,000 readers in the United States and Great Britain and is translated daily into French, German, and Spanish. Wiggin's other books are Financial Reckoning Day also co-authored with Bill Bonner and The Demise of the Dollar… and Why it’s Even Better for Your Investments. Wiggin has also co-authored a book that was turned into a film called I.O.U.S.A.: One Nation. Under Stress. In Debt. that looks at the rapidly growing national debt and its consequences for the United States and its citizens.
Saturday, 5 January 2013
Photo courtesy of gauteng.net.
Happy New Year everyone. It is so exciting to enter into 2013.
This is the year for the growing booming Middle Class. This is the driver for African growth this year. Despite the gloom and doom Africa's middle class is hungry for goods and services.
Above is a photo of Sandton City in Johannesburg South Africa, the four-storey cosmopolitan shopping centre situated in Africa’s “richest mile.” Sandton is home to South Africa's old and new money. Sandton is where the rest of major Africa cities are headed this year.
My tip for entrepreneurs this year is focus on what Africa's rising middle class are consuming - fast moving consumer goods. That's where the money.
Thursday, 13 December 2012
I wrote sometime back about the wealth of Singapore and how Africa can tap into this affluence for capital formation for development. Here is how.
Just follow the money trail and Singapore has lots of money and this could finance major projects. Here are a few sources.
High Net Worth Individuals
According to the Capgemini Merrill Lynch 2011 World Wealth Report Asia has 3.3 million high net worth individuals (HNWIs) with investible assets of $1 million and more are second in number to North America, and ahead of Europe for the first time. Some of these are based in Singapore and would be potential angel investors into African projects.
Singapore is a major financial centre that rivals London and New York plus is home to several commercial banks that many consider financing African projects.
Unlike commercial banks, development banks offer long-term finance and are ideal for mega projects.
Pension funds get more from pensioners and invest this into various investment vehicles like stocks, bonds are directly into a projects. These are managed by a fund manager who chooses the types of projects to invest into.
Property funds resemble pension funds except that these only invest into property either directly or indirectly.
Property developers are investors that specialise in developing properties that are later rented or sold.
Sovereign Wealth Funds
A sovereign wealth fund is like any other investment fund except it is owned by a government. Singapore has two sovereign wealth funds; Temesak Holdings and the Government of Singapore Investment Corporation (GIC). These has assets amounting to billions of dollars.
One way to raise finance is list shares on the Singapore Exchange. 200 international companies from over 20 different countries listed in Singapore since the early 1990s.
Singapore began life as a trading nation and today is at the centre of global trade. It is also home to commodity traders like Olam and Ning that invest into agriculture.
Singapore Business Federation
One way to linking with potential Singaporean business partners is through the Singapore Business Federation.