The bad news

Oil prices plummeted from $100 a barrel to c.$30 (analysts at Standard Chartered believe prices could hit the $10 mark this year) which hit the oil exporters like Angola and Nigeria where it hurts prompting them to go cap in hand to the IMF. The FT reported that Ghana had an underwhelming cocoa harvest, the copper price did Zambia no favours and although inflation is falling pretty much everywhere else, it is rising in sub-Saharan Africa and is expected to hit 7 per cent this year and 7.25 per cent in 2015 sapping growth still further.

Nigeria, Africa’s largest economy, marks the one year mark of Buhari’s presidential succession (a relatively seamless transition albeit dogged by security concerns in the north of the country).  A slew of further elections, of varying democratic merit, in Chad, Central African Republic, Congo, Uganda and Ghana will also add to the volatility of the region with Patrick Smith, editor of Africa Confidential, calling South Africa’s vote the most significant event since the liberation election.

Oh… and China’s economy (one of the largest investors in Africa) is staggering toward the weakest growth in a generation.

The case for rational optimism

In 2000 The Economist ran a front cover calling Africa “the hopeless continent”. In 2016 John Ashbourne, African economist at Capital Economics, told the FT that people misunderstood the concept of Africa Rising and is critical of the “irrational optimism” surrounding the weight of expectation for African countries to become the next Denmark or Malaysia.

However while Mr Ashbourne is absolutely correct to be liberal with the cold water- particularly in overcrowded markets complacently over exposed to the petrochemical and extractive industries there are still great stories to be told if you know where to look.

Let’s just start with the cultural milestones-

Nigerian, Okwui Enwezor curated 2015’s Venice Biennale- he was the first African to do so and challenged the zeitgeist to bring African artists to the forefront. The exhibitions were lauded as some of the most exciting in recent years with Ghanaian filmmaker John Akomfrah’s three-screen film “Vertigo Sea,” described by Okeke-Agulu as “searingly beautiful.”

ShoMax, part of Naspers went head to head with Netflix to own the video on demand market across the continent. Africa’s biggest company is now not an extractive or petrochemical giant but a media company.

The application of technology in the Africa Rising story is well documented- the continent all but leap-frogged fixed line connectivity and smart phones are now driving everything from financial inclusion to election campaigns and yes there is an app for herding cattle you can download it here.

A low oil price is bad news for exporters but should be good news for manufacturers and consumers. With the commodities crutch kicked away, a young, aspirational, tech savvy and entrepreneurial population may see a generation, through necessity develop a genuinely diversified economy.

Judith Tyson from Overseas Development Institute, points out that the current situation (oil, China etc) was well telegraphed and that the growth story is now coming from a low base in Ethiopia, Sierra Leone, Democratic Republic of Congo, Madagascar and Ivory Coast.

The risk-reward ratio on doing business in some of these markets is not to everyone’s taste. The challenges are considerable- from corruption and governance to infrastructure and security but as international companies, backed by oversubscribed but under deployed PE funds, explore the opportunities they will discovering that necessity is the mother of invention.

Next in series….

Why education is key to Africa’s self-perpetuation

Image: lcswart / Shutterstock.com

Stick with me.

I was in Austin, for the first time, to attend SXSW Interactive this past week. An event, much like the Breakfast Taco in its ability to combine disparate ingredients- music, film, politics, science, marketing and technology – in such a way that it just tastes like they’ve always belonged together.

It is this “mixing” that, to my mind, makes it the most inspiring event I’ve attended. You could taste the creativity in the air, lingering like the chilli kick in a good Taco.

In our industry if Cannes is where you go to collect your award, SXSW is where you should go to get the creative idea that will win said award. Everyone I met and interacted with, had their neurons firing on full cylinders all eager and inspired to apply what they’d heard, or to follow up on the new connections they’d made.

As you might expect, discussions and presentations were wide ranging.

From the role of technology in civil rights, the rise of automation, smart cities and transportation, hacking the brain with VR through to the secret of happiness. With over 600 events on the Interactive part of the conference alone, I was walking around in a constant straight of FOMO. Had I gone to the right session! What was I missing?

So whilst I leave the event with pages of notes and much still to digest, here are five key lessons learnt:

• Our Robot overlords are nowhere near. Rodney Brooks, the godfather of modern Robotics, made it clear that the media is over hyping this technology. We are far away from Robots ever thinking like humans. It’s taken 30 years of engineering and the best consumer application has been a hoover (which he invented). So let’s all take a big organic sigh and relax.
• Self Driving Cars are close to magic, but a distant reality. The head of Google’s self-driving project Chris Urmson, demonstrated the progress with the technology. The technology behind it is magnificent. It is a feat of engineering unlike anything I’ve seen before. Yet, despite the sophistication of the solution there is still a long way to go before it’s fully commercialised and deployed. Why? Well programming for the randomness of human nature is a real challenge. He wouldn’t be drawn on timing but did say “sometime in the next 5 to 30 years”. So, probably nearer 30 than 5.
• The US will continue to build the future. Not just because they have events like SXSW where creativity is celebrated and fostered, or that they have a President so in tune with the role of technology in ensuring future prosperity, but because of their discipline and celebration of failure. An active encouragement to fail, fail often and to have the resiliency to keep going. The second day keynote was delivered by Brene Brown, author of Daring Greatly, who was sharing the methods to be courageous and resilient.
• VR is going to be much bigger than you think. This is not a fad, this is not the 3D of TV. The fact you can actively “hack” the brain due to the immersive nature of the experience means it will be industries like Education (what better way to learn than being there) or pharmaceutical (treat mental health issues like anxiety with VR) that will be disrupted in the short-term. You will soon be prescribed a VR video over Prozac.
• Snapchat is about to go truly mainstream. Every teenager today is probably using Snapchat, a lot. The average age of use is now also starting to trend up. You want to reach the 18-30 audience? Then this is the platform. One needs to also consider that, much like Facebook did when it became mainstream, it will also begin to have an impact in the B2B environment – as young staff join business and are used to communicating in this medium.

And, much like my first experience with the Breakfast Taco I leave wanting more. Until next year.

Image: Tricia Daniel / Shutterstock.com

The event brought together some of the most influential business decision-makers, government policymakers and innovative thinkers from around the world to examine topics ranging from the global outlook for LGBT rights to the role of legislation in shifting public opinion and a conversation on the next fronts in the battle for LGBT acceptance. Speakers included Benny Higgins, Chief Executive Officer of Tesco Bank; Ivan Gazidis, CEO of Arsenal FC; Sadiq Gilliani, Senior Vice-President of the Lufthansa Group; Omar Sharif, Jr., human rights and LGBT rights activist; and Adam Warby, CEO of one of our clients, Avanade.

Edelman secured media attendees including HR Magazine, Quartz, and Diginomica.

The event was trending on Twitter, and our hashtag #EconPride got a total of 11,751 mentions on Twitter alone within seven days. This was in addition to the 117 pieces of content on Instagram.

 Measuring from Tuesday 1^st March – Tuesday 8^th March, #EconPride received 11,751 mentions on Twitter and 117 posts on Instagram in total.

Images by The Economist Events, © All Rights Reserved

Of course, Budgets are highly political events and this year’s was no exception. The vote on whether Britain will remain part of the European Union is looming and the Chancellor had one eye on this, even as the upcoming Conservative leadership election intruded on the periphery of his vision. His Prime Minister instructed him to “play it safe” – advice he won’t have had any trouble heeding, lest he put his own backbenchers off supporting him when it comes to the succession.

But did he succeed? Simon Walker argued that business was a winner from the Budget – with measures like the cut in capital gains tax “more than we would have dared asked for” – and even Diane Abbott acknowledged that, for 48 hours at least, the Chancellor looked like a winner. But she anticipated the Budget quickly unravelling; and Jacob Rees-Mogg warned of trouble to come over the sugar tax on soft drinks companies – on which he threatened to rebel – as well as disquiet over cuts for benefits to the disabled.

George Parker related that one of Mr Osborne’s aides was heard to say “Job done”; but the devil of a Budget is often in the detail and the press and politicians will be picking over it in the days to come.

See highlights from the event below.

For a full analysis on George Osborne’s Budget announcement, please click here to view Edelman’s Budget Briefing.