Nairobi (Kenya) – The third wave of the global crisis is about to hit East Africa, with potentially devastating effects.

There’s a tsunami coming, warned industrialist Vimal Shah, CEO of the Bidco Group, addressing a special forum organised in Nairobi by the Central Bank of Kenya and the Kenya Bankers Association to assess Keya’s preparedness on all fronts  finance, capital markets, manufacturing, agriculture, especially horticulture, tourism, construction and property.

That Kenya’s private sector and economic managers are alive to the enormity of the coming crisis became clear as presenters representing various sectors confirmed African Development Banks chief economist Dr Louis Kasekende’s view that Africa’s economies are as vulnerable to the global economic recession as they were presumed to be insulated from the global financial crisis that forced the slowdown in the first place.

According to the chairman of the Fresh Produce Exporters of East Africa, Hasit Shah, the sharp fall in the euro and pound sterling against the dollar in the country’s primary Northern Hemisphere markets for flowers, vegetables and other produce has severely reduced the competitiveness of exports to those regions.

With dollar-denominated air freight costs still at the high levels triggered by the oil price surge of last year, the profitability of this valuable sector had fallen sharply. By Mr Shah’s estimate, there has been a 75 per cent reduction in net value terms during the 2008/9 period.

What is worse, flower sales have plummeted as belt-tightening Europeans cutback on discretionary spending, resulting this year in what Mr Shah described as the worst Valentine’s Day sales in recent memory. Although the fresh vegetables sector has proved to be more resilient, revenues have not been strong enough to offset the reduction in other segments.

Similar tales of woe were narrated by Kenya Tea Development Agency boss Lerionka Tiampati. Tea exports to the UK and Pakistani markets have been largely flat since 2007, with robust growth exhibited only in the Egyptian markets — leading to substantial reductions in returns to industry stakeholders.

Vimal Shah, who is also the Kenya Association of Manufacturers chairman, highlighted a different dimension however. Although this slowdown has indeed resulted in several unique challenges, he exhorted the gathered delegates to see the opportunities the chaos presented. He highlighted the growing threat of dumping of cheap goods from non-traditional markets such as Iran, as well as existing exporters such as China and India as these nations seek new markets outside the recession-hit Western economies.

Moreover, the protectionist rhetoric that has accompanied bailout initiatives by the EU and US governments suggests that trade opportunities in these markets will become ever more limited. But in fact, this also represents the country’s biggest opportunity. As Mr Shah told the gathered guests, 63 per cent of Kenya’s exports already go to the East African Community, with trade with Africa on a continuous 10-year growth trend. So far, intra-Africa trade has proved resilient to the global recession as oil products, cement, alcoholic beverages, steel products, tyres, edible oils, vehicles and paper products dominate trade between the EAC and the rest of the continent.

In contrast, despite the Agoa initiative facilitating access to the US market, the textile industry has been in steady decline over the past decade.
According to Mr Shah, from as many as 47 textile manufacturing entities that had set up shop in Kenya’s EPZs, less than 25 remain today. Employment in the sector is also down from a high of 45,000 to about 12,000 today.

But as Vimal and Hashit Shah, as well as Mr Tiampati and others from the sector confirmed, Kenya’s more fundamental problem is the high cost of doing business. Well before the global financial crisis hit, our region was suffering from inefficient air and sea freight processes, while poor port clearance statistics from Mombasa, high cost of electricity and poor roads had severely dented the ability of East Africa to be competitive in export markets.

Add to this the unique sectoral challenges, such as high cost of fertilisers, poor VAT refund administration by the Kenya Revenue Authority, over-reliance on single traditional markets, poor export marketing co-ordination and weak product diversification; and you have sectors that were in trouble, well before the global crisis became a household word.

According to Vimal Shah, the global recession has forced the region’s exporting sectors to look at their industries critically and has starkly exposed their fundamental inefficiencies. Mr Shah did not mince his words when he suggested that to extract the best value from the opportunity the crisis presented, we need to trim the waste and focus on competiveness.

Unfortunately, at a time when everyone needs to be worried about operating costs, a profligate coalition government has seen its budget deficit widening” creating a genuine fear of rising interest rates ” the last thing the country needs in a deflationary situation. Taking the cue from Finance Minister Uhuru Kenyatta, delegates said the need to look keenly for efficiency gains could prove a major positive from the global downturn. With this mindset, delegates’ attention then turned to inefficiencies and weaknesses in the capital markets sector.

Nairobi Stock Exchange chairman Peter Mwangi told the forum that the bourse index had fallen by more than 35 per cent in 2008, which he argued was in the same ball park with reductions in the Ugandan, Nigerian and South African bourses. Not all of the attending delegates agreed with this argument however. Well before foreign and local investments in the capital markets started their gradual exit, the NSE had been suffering from inescapable investor uncertainties and worries.

CFC Stanbic Bank director John Ngumi insisted that this was because there were serious governance challenges in the stockbroking and investment banking activities in the industry. Without demutualisation and stronger oversight from sector’s regulator, the Capital Market Authority, this sector cannot realise its full potential.

As another delegate suggested, perhaps the investment banks should not be called banks ” ostensibly to distinguish better in the minds of Kenyans the different roles and practices of these entities; but more likely so as to prevent commercial banks suffering from the increasingly strained reputations of the investment banks.

The head of banking supervision at the CBK, Rose Detho, agreed that the Capital Markets Authority and the NSE need to get their collective act together to restore confidence and stability to the sector. She echoed a comment from Mr Ngumi that a critical lesson from the global financial crisis is the need for regulators to work together, saying that there is very little co-ordination between the banking regulator and the regulators of the insurance industry, capital markets and retirement benefits sector.

source.The East African (Kenya)

Banjul (Gambia) – Amnesty International today revealed that up to 1,000 people in The Gambia have been kidnapped from their villages by witch doctors, taken to secret detention centres and forced to drink hallucinogenic concoctions. The incidents are occurring in the context of a witch- hunting campaign that is spreading terror throughout the country.

Amnesty International called on The Gambian government to put an immediate stop to the campaign, investigate the incidents and bring those responsible to justice.

Eyewitnesses and victims told Amnesty International that the witch doctors, who they say are from neighbouring Guinea, are accompanied by police, army and national intelligence agents. They are also accompanied by “green boys” “ Gambian President Yahya Jammeh’s personal protection guards

According to information provided to Amnesty International by victims and their relatives, witch doctors have been visiting villages with armed security and taking villagers they accuse of being witches“ many of them elderly by force, sometimes at gunpoint. They are then taken to secret detention centres.

At the secret detentions centres, where some have been held for up to five days, they are forced to drink unknown substances that cause them to hallucinate and behave erratically. Many are then forced to confess to being a witch. In some cases, they are also severely beaten, almost to the point of death. The liquid they are forced to drink has led many to have serious kidney problems. Two people are known to have died of kidney failure after having been subjected to the ordeal.

The most recent incident took place on the 9 March 2009 in Sintet village in the Foni Jarrol district, where up to 300 people were forced to go to the President’s farm in Kanilai. According to one eyewitness:

At 5:00 am the paramilitary police armed with guns and shovels surrounded our village and threatened the villagers that anyone who tries to escape will be buried 6 feet under:

Fear gripped the village¦

children were crying and traumatised. They randomly identified over 300 men and women who were forced at gunpoint into waiting buses and ferried to the President’s hometown. Once there, they were stripped and forced to drink dirty water from herbs and were also bathed with these dirty herbs. A lot of these people who were forced to drink these poisonous herbs developed instant diarrhoea and vomiting whilst they lay helpless. I stayed there for five days. I experienced and witnessed such abuse and humiliation. I can not believe that this type of treatment is taking place in Gambia. It is from the dark ages.

The incidents have taken place in the Foni Kansala district, an area near to President Jammeh’s farm of Kanilai. However, many people are telling Amnesty International that the witch hunting campaign will spread throughout the rest of the country. Hundreds of Gambians have already fled to the Casamance region in Senegal after their villages were attacked.

The witch-doctors were invited to The Gambia early in the year, soon after the death of President Jammeh’s aunt. The President reportedly believes that witchcraft was used in her death.

On 8 March, Halifa Sallah, a prominent opposition figure who has written for the main opposition newspaper, Foroyya, about the activities of the witch-doctors, was arrested at his home. He has since been charged with sedition and spying, and is currently in Mile II, the Central Prison in the Gambia. His next court date is set for 25 March. Amnesty International is concerned that he is at risk of being tortured or ill-treated and that his trial will be unfair.

Halifa Sallah is former member of the Pan African Parliament and minority leader of the National Assembly. He is Secretary General of the People’s Democratic Organization of Independence and Socialism and coordinator of the National Alliance for Democracy and Development. He stood as a presidential candidate in the Gambia in 2006.

source.Amnesty International Press Release – March 19, 2009.

London (UK) – Once upon a time everyone knew what television and radio were and they played a key role in people’s lives. Particularly for urban Africans they were the soundtrack to life, the sports match in the bar and the common conversations about television programmes.

Nowadays in the more liberalised of African countries there are more television and radio stations than you can remember the names of and for the smaller group of the more well-off, there are pay TV channels, time-shifting and DVDs. And all that’s before you take into account SMS information services and the Internet which are eating away at the edges of the audiences. Russell Southwood looks at the fault-lines.

Dakar will shortly have 7 television stations, not including the three Pay-TV channels you can get if you can afford them or can pirate a service. Lagos has 13 television stations and perhaps three main Pay-TV channels. Kinshasa has over 40 television stations, many of which simply show pirated television content. In this circumstance, no channel will get more than 20-30% of audience share on a regular basis.

Pay-TV may seem a very modest presence in most countries but because it is widely watched in public places, it audience reach is understated by its subscriber numbers. Furthermore, piracy means that a large number of additional subscribers (sometimes double the number) are watching without paying for content.

Vernacular radio has exploded and the number of radio stations is exponentially larger than for television stations as many of them are much more local. Uganda has 150 stations and Kenya over 90. But whilst radio might have a wider and deeper audience reach than television, the fragmentation makes it difficult for advertisers to reach their audiences.

The standard broadcasting formats that seemed to serve so well in less competitive times are now being taken apart and put back together by the viewers and listeners themselves. Legitimate and pirated DVDs provide a steady stream of relatively cheap entertainment, particularly of films. Recent releases may command a better price but three relatively old action action movies (Bruce Lee, Stephen Seagal, that kind of thing) can be bought for around US$2. PVRs, streaming and catch-up downloads will all become a reality as part of the dividend of cheaper bandwidth in 2009.

Middle class Africans are using a growing array of devices. Laptop use is growing as sales of this kind of computer begin to equal those of desktop PCs. High-end smart phones like Blackberries and iPhones are increasingly visible. One African carrier has 800,000 high-end phones on its network.

These devices are not just for doing work or making phone calls. They have become media in their own right. Recent surveys show that in North Africa 3-7% of the population cited SMS as one of their most used daily information sources. Likewise the Internet is set to have a much greater impact with the spread of broadband subscriptions.

According to Alexa.com, Facebook and You Tube are already amongst the Top 10 sites in the African countries that it analyses. Again based on survey work, between 1-8% of the population used the Internet daily across a range of very different countries. With cheaper international bandwidth, these figures will increase slowly but surely. Mobile Internet will become cheaper and play an increasingly large role in people’s lives.

Current ad spend on the Internet and SMS is tiny but ad money will migrate as it gets larger. This is money that will most likely be lost to newspapers which seem the most vulnerable as the media landscape’s tectonic plates begin to shift.

So what can the African broadcaster do faced with all of this? There are two ways to stay in the game: by using new media to extend the appeal of interesting content across all platforms and by stealing new media’s best ideas and using them to survive. Unfortunately too few TV stations have invested in convincingly local TV content that might well provide the adhesive that would keep viewers eyeballs glued to the their channel.

This article is a summary of a more detailed analysis in the recently published African Film and TV Yearbook.

 

source.Balancing Act (UK) – March 19, 2009.