African Industry & Business

African Industry & BusinessThe 'African Industry and Business' series focuses on the present developments and the future potential of the myriad industries and businesses operating across the continent. These include, but are not limited to, minerals and mining, extraction and manufacturing and research innovation. 'African Industry and Business' also deals with issues related to the ease and regulation of business practices, and the changing environment of inter-African and global competition, as it impacts upon industry.


Africa’s cursed black gold: Analysing Nigeria’s oil industry Print E-mail
Written by Denine Walters(1)   
Thursday, 02 September 2010 08:20

Oil fouls everything in southern Nigeria. It spills from the pipelines, poisoning oil and water. It stains the hands of politicians and generals, who siphon off its profits. It taints the ambitions of the young, who will try to scoop u a share of liquid riches - fire a gun, sabotage a pipeline, kidnap a foreigner.” This epitomises the oil industry in Nigeria, which is a textbook example of the curse of natural resources - meaning that an abundance in natural resources, such as oil, often leads to lower economic growth through what is known as the Dutch Disease syndrome as countries are often over-dependent on the “easy” money accruing from natural resources. Furthermore, the oil industry has been central to the ongoing civil unrest in the country, which gained worldwide publicity with the trial and execution of Ken Saro-Wiwa and eight other political activists in 1995.

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Examining Zambia’s copper industry Print E-mail
Written by Denine Walters (1)   
Monday, 02 August 2010 08:07

Zambia , a developing country in Southern Africa has been ranked as the 11th largest producer of copper in the world with an excess of 2 billion tonnes of copper that still needs to be extracted. Currently, copper production in Zambia also accounts for 10% of its gross domestic product (GDP) and 80% of its foreign exchange earnings. Moreover, Zambia’s copper wealth is one of the most discussed and analysed sectors in Africa, especially with regards to international (mostly Chinese) involvement. As such, this article will examine Zambia’s copper industry in terms of its wealth, international involvement, and actual benefits the copper sector has provided for the African country.

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Death in the name of profit: South Africa’s mine safety scourge Print E-mail
Written by Shona Kohler (1)   
Monday, 02 August 2010 08:01

In July 2010, a rockfall accident at the Marikana mine, a joint venture between Anglo Platinum and Aquarius Platinum, resulted in the death of six mineworkers. In the wake of the accident, the South African Government responded boldly, and the principal inspector of mines in the country’s North West province, where Marikana is situated, issued a directive relating to all operations in the province using bord-and-pillar mining methods. While the concerns of the mining companies and analysts may have been correct and, indeed, it seems likely that the directive would have had a significant impact on the affected mines and possibly on the economy more broadly, the incident serves to highlight several important characteristics of the mine-safety challenge that South Africa faces.

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The trade in counterfeit goods: What is it, why is it a problem and what is its impact on Africa? Print E-mail
Written by Richard Meissner (1)   
Thursday, 15 July 2010 16:23

A highly visible influx of counterfeit goods, of various types, is occurring across the African continent.(2) Most of these goods, including clothing, digital video discs (DVDs), compact discs (CDs), Play Station games, designer labels, computer software and pharmaceuticals, are sold across the continent.

It might seem harmless to buy a knock-off item; after all, the originals are out of reach for most who are longing for a real designer label. This is, however, only the visible side of the illicit trade in fake goods.

There is however, a more sinister side to this illegal industry, with counterfeiting being far more harmful than it appears. By purchasing such goods, one could, for example, be financing organised crime or even international terrorism. In fact, the global counterfeit or pirate products market is more lucrative than the global trade in illegal drugs. The Organisation for Economic Cooperation and Development (OECD) estimated that, in 2005, the global trade in fake or pirated goods was worth around US$ 200 billion. This was a very conservative approximation, since it did not include pirated digital products or internal OECD counterfeit production and trade.(3) In 2007, the International Chamber of Trade’s (ICT) estimation of the total global value of fake goods was more than US$ 600 billion. This represented between 5% and 7% of world trade.(4)  This CAI brief aims to explore this lucrative, albeit illegal, industry a little further, examining the reality of counterfeiting and discussing its current and potential impact on the African continent?

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The indigenisation of Zimbabwean business: A threat to economic recovery? Print E-mail
Written by Shona Kohler (1)   
Friday, 02 July 2010 08:11

In February 2010, Zimbabwe published indigenisation regulations aimed at ensuring a higher level of participation of 'indigenous' Zimbabweans in the country’s economy. One of the risks of these regulations is that they threaten to undermine confidence in the Government’s willingness to implement policies that will facilitate private sector development. As a result, these regulations have the potential to derail the partial economic stabilisation that the country has achieved in recent months.

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The Water Security and Business Nexus on the African Continent Print E-mail
Written by Richard Meissner (1)   
Tuesday, 15 June 2010 16:00

The current debate over South Africa’s looming water crisis has brought to the fore the issue of water security.(2,3) Water is vital not only to sustain life itself but also for economic development.(4) In order to develop a country’s or region’s economy, water must be available in quantity and drinkable quality. Water must be captured, stored and purified before it can be used. Infrastructure, as well as administrative and bureaucratic institutions to manage the day-to-day allocation and use of water resources among competing users, is necessary. This is, in short, the essence of water security, which is the capacity of a population to ensure continued access to potable water now and into the future. Since South Africa is the largest economy on the African continent, its pending water crisis makes one wonder about the situation in the rest of Africa.

Across Africa and the globe, water security is declining since it relates to population growth, climatic variability, urbanisation, pollution, over-allocation and use as well the sharing of international river basins for competing uses. As water is vital for economic development, what risks and opportunities are businesses, operating throughout Africa, facing in light of poor water security?

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Powering South Africa: The implications of Eskom’s tariff increases Print E-mail
Written by Shona Kohler(1)   
Tuesday, 01 June 2010 17:45

In February 2010, the National Energy Regulator of South Africa approved a tariff increase of 24.8% for the country’s electricity utility Eskom for the year starting 1 April 2010, to be followed by increases of 25.5% and 25.9% in 2011 and 2012 respectively.(2) These increases are significantly less than the 146% increase in 2010, followed by 12% each year in 2011 and 2012, proposed by Eskom initially, or the alternative smoothed increase of 45% a year for three years. They are also less than the utility’s later revised request of 35% a year for three years.  However, the approved increases remain substantial and their announcement has, for the most part, been greeted by responses ranging from concern to outrage.

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Grappling with the questions: The debate on the nationalisation of South Africa’s mines Print E-mail
Written by Shona Kohler (1)   
Monday, 10 May 2010 11:19

Since mid-2009, a cacophony of voices has weighed in on the debate around the nationalisation of South Africa's mineral wealth. Leading the one side of the debate is the African National Congress Youth League (ANCYL) – an arm of the country's ruling African National Congress (ANC) – which is vocally in favour of nationalising the mines. However, various actors in the ANC-led Government have flatly denied that nationalisation is a policy option. The country's president, Jacob Zuma, for example, has unequivocally stated that the nationalisation of South Africa's mining sector is neither the policy of the ANC nor the Government (2).

However, between the ANCYL's enthusiasm for nationalisation and the president's denial that this is a prospect, lies a “complex web of allegiances, loyalties and naked self interest” (3) which has produced a debate that, thus far, has been characterised by much hot air, but little substance.

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