RSS

Tag Archives: World Economic Forum

Pessimism still surrounds the ‘Visa free travel in Africa’ initiative, by Chofor Che, 03 June 2014


Africans especially in the Central African region have always wished to travel visa free. Many argue that if this were possible, it would be a speedy panacea to regional integration. How possible and true is this assertion? I wonder.

The ‘Visa free travel Africa’ initiative was launched by Donald Kaberuka, President of the African Development Bank (ADB), Paul Kagame, President of Rwanda, Uhuru Kenyatta, President of Kenya and Nigerian businessman Aliko Dangote, during the World Economic Forum on Africa. According to an article by Biztechafrica of May 2014, the idea behind this initiative is to encourage travel across the continent by curbing on visa constraints.

The ADB’s Chief Executive remains optimistic about this initiative. According to him, the ‘Visa free travel Africa’ initiative will spearhead regional integration across Africa and speed up Africa’s economic development. Kaberuka however opines that African leaders need to take action to make this happen.

There have equally been panel discussions all over the continent to engineer the ‘Visa free travel in Africa’ initiative. During one of such panel discussions in Nigeria, the ADB’s Chief Economist, Mthuli Ncube, encouraged Kenya, Nigeria and South Africa to harness their developmental drive and make speedy growth on the continent a reality especially by ensuring that Africans are able to travel without visa constraints. According to Biztechafrica, this call was made during a panel discussion on ‘Forging Inclusive growth, Creating Jobs’. Ncube’s topic was on, ‘Driving Competitiveness through Cooperation, integration and Economic growth’.

The ‘Visa free travel Africa’ initiative is a very laudable idea but the continent still faces a lot of challenges especially governance issues. Lack of political will on the part of African leaders remains a gigantic hurdle. This explains why such an initiative is spearheaded by just two African leaders instead by all African leaders. In addition to this, continental bodies like the African Union have not strongly added their voice to the ‘Visa free travel Africa’ initiative. A scenario such as this makes one to wonder if this is not just brutum fulmen (an empty noise) on the part of Kaberuka, Kagame, Kenyatta and Dangote.

In as much as the ‘Visa free travel Africa’ initiative is a laudable one, African leaders are still to curb internal barriers in their various states especially barriers to trade and development. If circulating in various African states remain a nightmare, what more of travelling on the continent. Most states especially states in the Central African region cannot even boast of domestic air travel facilities especially infrastructure. Most of the personnel in African states are not trained with state of the art air travel measures especially ways of combating against terrorist activities. Citizens still have to pay exorbitant air port taxes despite having paid heavy visa fees and purchased expensive air tickets. Such impediments affect the ‘Visa free travel Africa’ initiative’ from transgressing from an ‘initiative stage’ to a ‘reality stage’.

It is thus important for African leaders to bring on board more private actors. True privatisation of the airport sector with minimal control from big governments on the continent can make the ‘Visa free travel Africa’ initiative a reality and thus speed up Africa’s development. African leaders need to curb internal barriers such as heavy taxes in their various states especially barriers to trade and development. Circulating in various African states should not be a nightmare. Most states especially states in the Central African region need to start rethinking their modus operandi on domestic air travel facilities especially infrastructure. Most airports in states especially in Cameroon, the Democratic Republic of Congo, Chad and the conflict ridden Central African Republic have been abandoned. It is time for most African states to revamp structures in these airports and begin with boasting domestic air travel before thinking of adding their voice to the ‘Visa free travel Africa’ initiative. Most of the personnel in African states need to be trained with state of the art air travel measures especially ways of combating against terrorist activities. Governments in African states need to also ensure that citizens do not have to pay exorbitant air port taxes especially having paid heavy visa fees and purchased expensive air tickets. If such measures are taken into consideration especially partnering with the private sector, then attaining the ‘Visa free travel Africa’ initiative’ would be possible.

 
 

Tags: , , , , , , , , , , , ,

Africa: The poor showing on the World Economic Freedom ranking – by Chofor Che, Published at Africanliberty.org, 2 October 2013


Chofor CheThe World Economic Freedom report was released on Wednesday, the 18 of September 2013. According to Mark Allix in a publication in BusinessDay Live, the report collects data from the World Bank, International Monetary Fund (IMF) and the World Economic Forum (WEF), among other institutions, to come out with country rankings. The WEF report measured variables across five areas: the legal structure and security of property rights in the state; the freedom to trade globally, the size of a nation’s government; the regulation of credit, labour and business and the states access to “sound” money.

According to a report by the South African based, Free Market Foundation, South Africa is ranked 88th out of 152 nations and territories in the latest WEF report. Hong Kong again topped the rankings of 151 countries and territories, followed by Singapore, New Zealand, and Switzerland in the Fraser Institute’s annual Economic Freedom of the World report. The United States, once regarded as a bastion of economic freedom, now ranks 17th in the world. Zambia, Rwanda, Botswana, Kenya, Tunisia and Uganda are ranked above South Africa, while not one of the other BRICs (Brazil, Russia, India and China) states was ranked in the top 100 states with a good economic freedom record in the world.

South Africa, which had not long ago been praised for its stock exchange regulation and auditing and reporting standards, performed poorly with respect to the top quartile of economic freedom indicators in all five categories. The weakest category was connected to the size of South Africa’s government, especially the sub-categories of state consumption and state enterprises and investment.

This means that the South African government consumed a higher proportion of national economic output than the world standard, and had “relatively heavy involvement” in the production of, and investment in, some of that output. Most disturbingly, the report adds that South Africa has been deteriorating according to these ratings since 2000, as government “drains” resources from the more productive private sector.

Mark Allix of BusinessDay Live opines that it is a pity that South Africa was found to be below the global average score. The WEF in collaboration with other organisations had earlier on warned South Africa of its education and labour market inefficiencies. WEF had therefore predicted the country’s poor ranking. According to WEF, coupled with the state’s remaining capital controls, centralised collective bargaining and business regulation, South Africa is plagued by the threat of fixed pricing, the compounded effects of infrastructure deficits and poor policy implementation.

According to Azar Jammine a South African Chief economist and Director of Econometrix (Pty) Ltd, is of the view that the South African economy had long suffered from apartheid. There were some hopes after the apartheid era, but now these hopes seem to be dashing away, especially with the crisis that recently hit the mining sector.

Despite the doubts portrayed by many pessimists about the methods utilised by the WEF in coming up with such rankings, there remain some truism in reports like the WEF report. Most African states, including South Africa have not given the private sector the chance to excel in economic freedom. A critical analysis of the economic atmosphere of most African states show that the legal structure and security of property rights in the states remains poorly developed. There is equally a porous promotion of the freedom to global trade. Most of the sizes of the central governments in Africa are humongous necessitating the use of a great chunk of tax payer’s money to cover unwarranted expenses. The gross regulation of credit, labour and business also adds to Africa’s poor economic ranking in the WEF report.

It is obvious that people living in states with high levels of economic freedom have greater prosperity, more political and civil liberties, better health and longer lifespans. This is based on personal choice, voluntary exchange, freedom to compete, and the security of private property. If African states want to turn things around, then it is imperative that they rethink various policy strategies with respect to economic freedom and liberty.

 
2 Comments

Posted by on October 4, 2013 in Africa Development

 

Tags: , , , , , , , ,

Examining the 2012 Financial Development index rankings of African States by the World Economic Forum , By Chofor Che, 31 October 2012


The Financial Development Report measures and examines the factors allowing the development of financial systems in a couple of economies around the world. It aims to furnish a comprehensive modus operandi for states to benchmark various aspects of their financial systems and put in place priorities for economic improvement. It is published annually so that states can benchmark themselves and track their progress over time. Since 2008, the year that the Financial Development Report was first launched, financial systems around the world have been hit with a couple of devastating crises. From crippling unemployment, serious housing bubbles, unsustainable debt levels and economic stagnation, few states have been spared. Even emerging economies, which showed relative strength during this period, have been unable to decouple successfully from Western markets.

The Report presents the rankings of the Financial Development Index, developed by the World Economic Forum in partnership with business leaders, public figures, the academic community, and multilateral organizations. It puts together an enormous amount of data to create an assessment of the various aspects of complex financial systems, including the business environment, the institutional environment, capital markets, financial stability, banks, and overall capital availability and access.

The Report appeals to a large audience such as policy-makers, business leaders, academics and different organizations of civil society. It aims to provide policy-makers with a balanced perspective on which aspects of their country’s financial system are most important and with the ability to empirically calibrate this view relative to other countries.

In the 2012 Report, Hong Kong is ranked first, with the United States of America coming in second place. Concerning African states, South Africa is ranked 28th, as compared to being ranked 29th in 2011. The next African state on the list is Egypt, which is ranked 53rd, as compared to being ranked 49th in 2011. Egypt is followed by Kenya, ranked 54th, Ghana ranked 56th Tanzania ranked 60th and Nigeria 61st. It is rather unfortunate that central African states like Cameroon, the Democratic Republic of Congo, Equatorial Guinea, Gabon and Congo Brazzaville, do not feature in the top 62 of this ranking.

Judging from Africa’s performance according to the rankings of the 2012 Report, it is obvious that there are still concerns with the business environment, the institutional environment, capital markets, financial stability, banks, and overall capital availability and access, in African states. This in effect means that African states need to address issues of corruption as well as poor financial management plaguing their economic and financial improvement. The key lies in the central governments of African states and most especially central African states to create a friendly business environment in their states, as well as an institutional environment, for capital markets to flourish.

 
Leave a comment

Posted by on October 31, 2012 in Uncategorized

 

Tags: , , ,

 
%d bloggers like this: