With saturated markets in Europe and North America, industrial firms are turning to other parts of the world to bring their craft and technology, and to maintain their growth. And right in the middle of their scope lies Africa. The size and magnitude of industrial and infrastructural project in Africa have been on the steady rise over the past years, enough to turn the continent into a new business hunting ground.
Both because of the cliché of African poverty and because of higher-economic profile countries such as China or Brazil, uninformed readers may believe that Africa’s growth is sluggish, or even dormant. Nothing could be further from the truth, with some African countries posting growth rates neighboring 10%, far beyond the champions of Asia or Latin America. In fact, even when factoring in the sluggish or war-ridden areas of the continent, Sub-Saharan Africa is the fastest developing area in the world. Some of this growth is due to post-conflict reconstruction, some due to renewed political governance. But with the vastest natural resources in a ever-hungrier world, the road is open for Africa to maintain its steady growth and attract increasing attention from foreign investors. Economic expert Krispinana Shirima Krispinana explains (1): “Although concerns exist regarding the negative effects of foreign capital inflows, including Foreign Direct Investment (FDI) and portfolio equity and debt flows, a variety of empirical studies have demonstrated that the inflows stimulate economic growth with the transfer of new technologies and innovations, human capital formation, and integration in global markets.”
With wanting areas of development, and stabilized conditions foreign investors will be the key to unlocking projects. The Ethiopian Herald reports the effectiveness of foreign funds investment (2): “Ethiopia has continued becoming investors’ choice. It is attracting more Foreign Direct Investment (FDI) from time to time. Particularly, textile and garment manufacturing industries, as the sectors are labour intensive, they create millions of job opportunities, and help transfer technology.” Even with the period of peace and stability, little or nothing will happen without FDIs, due to lack of available native funds from the African private sector. A playground is a necessary condition to play, but not sufficient to launch the game.
Business day highlighted this dilemma (3) in its February 2017 analysis : “Between 2010-2016, Africa recorded $22.7billion in private equity transactions, reports the Financial Times (FT), representing only about 1% of global PE investments despite a contribution of roughly 3% to global GDP. Furthermore, the majority of the transaction capital came from a few big investment firms targeting a limited number of deals.” This entails that a vast majority of investments are injected by the public sector, with often reduced efficiency, exposure to graft and dependence upon international aid.
Africa has succeeded in turning its difficulties into opportunities. With less than half the continent electrified, save Northern Africa, lack of access to reliable power has plagued economic development for years. Today, numerous projects are coming out of the ground with off-grid powering solutions. Expansion of water networks or transportation networks, which suffer years of belated maintenance, is currently picking up. “A doubling of Ethiopia’s road network in two decades, has allowed more farmers to bring their produce to market”, the Overseas development Institute published in a recent report (4), stressing the impact on the general economy of the country “On average, Ethiopia’s economy is growing at 10% a year and it is expected to double within the next seven years. This means that by 2025, it will have grown to a middle-income nation. This is as reported by World Bank.” In fact, off-grid power solutions are on the rise in Europe also, where households seek to take part in environmental progress by producing their own power; so, Africa may prove to be the test lab and launching pad of the nascent technology, which Europe will then absorb with its high purchasing power.
Moreover, an increasing number of reforming and corruption-fighting leaders are at work in Africa and getting traction, according to many experts. Patrick Couzinet, director of Veolia Water Technology for Africa, gives great importance to the link between governance and economic perspectives: “In terms of development, economics and politics are one. And we are at the beginning of a new phase of stability, development and growth, with projects ready for every industry to strive on; from communications to transport, and from energy to tourism”. Throughout African 20th century, there has been many examples of development eras snapped short by revolts and instability sparked off by one political group. And when stability was assured, it has often been the silver lining of locked political interests, with a high cost to economic development. The political layer within countries often has more nuisance power than added value: it is difficult for the political establishment to develop by itself, but it can hamper development by itself. According to Patrick Couzinet, this threat is slowly drifting away from Africa, through reforms and structuration.
If anything is to confirm that the African continent is sizzling, it is the increase in foreign investments from China and from Western countries. Several post-crisis reconstruction phases are currently in progress, which yield high growth rates, just as the post-war reconstruction efforts pushed Germany and Japan to the top of the world’s economic ranking. And because the project under way are basic infrastructural equipment, it is very likely that it will bear further economic growth. There will therefore be many business opportunities for British and European businesses, due to Africa’s need for technological transfer.
Ridiculous Tariffs on Wines – China Australia Trade War Explicated
Earlier in November 2020, Communist China slapped Ridiculously high tariffs up to 212.1% on Australian wines. These tariffs were in the response of ongoing trade war between Communist Party of China and Australia. China is the biggest importer of Australian wines making up a whopping 39% of Australia’s total wine export. Australia has already raised concerns at a WTO meeting about China taking measures against its barley, wine, meat, dairy, live seafood, logs, timber, coal and cotton, according to a reuters report.
How did China – Australia trade war begin?
China and Australia shared one of the best times in their relationship after Kevin Rudd from the centre-left Labour party came to the power in Dec 2007. During his leadership Australia decided to pursue appease China policy which included steps such as:
- Chastising Taiwan for its renewed push for independence and reiterating support for a one-China policy in favor of People’s Republic of China. (Source: The Age)
- Signing a A$50 billion deal with PetroChina in 2009 (largest contract ever signed between the two countries) that ensures China a steady supply of LPG fuel until 2029.
- Unilaterally announcing departure from Quadrilateral Security Dialogue to appease China.
Nosediving of China – Australia Relationship
The course of this partnership changed when Julia Gillard from the centre-left Labour Party took over the leadership and initiated closer partnership with United States. This included revival of interest in Joining Quadrilateral Security Dialogue and stationing of US troops near Darwin, Australia.
In 2013, Tony Abbott from centre-right Liberal Party took over the leadership. During his term Australia saw some confusion in its China Policy. His Defence Minister Senator David Johnston told in a statement that Australia is seeking to balance their relationship between China and the United States. It was during his term when Australia and China established a Free Trade Agreement.
However, the relationship between Australia and China took a downturn in 2015 when Malcolm Bligh Turnbull from the centre-right Liberal Party came into power. This is the point in history which has led to current trade war situation between Australia and China.
- Australia became the strongest opponent of China’s territorial claim in South China Sea.
- Banned foreign donations to Australian political parties and activist groups in a move to target Chinese interference in Australian democracy.
- Revived Quadrilateral Security Dialogue with United States (Donald Trump), India (Narendra Modi) and Japan (Shinzo Abe). This was the time when Quadrilateral Security Dialogue saw hope of becoming something bigger as all four countries had centre-right governments who had a clear China Policy.
2019 Onwards: China – Australia Trade War
In 2019, relationship between the two countries further took a dip with Scott Morison from centre-right Liberal party becoming the Prime Minister. During his leadership:
- Australia signed a letter condemning China’s mistreatment of Uyghurs and other minorities.
- Suggested investigating the cause of Covid 19 in April 2020, which resulted into an angry response from China threatening to reduce Tourism and Trade.
- Opposed the Hong Kong National Security Law in June 2020.
- Reiterated its support for ethnic minorities in China and freedom in Hong Kong in October 2020
- Demanded a formal apology from China for posting a fake image of an Australian soldier holding a bloodied knife against the throat of an Afghan child
In conclusion, these continuous attack on China made China so angry that they deliberately leaked a list of 14 points suggesting why China is angry at Australia
China’s attempt at “buying” left wing politicians around the world
Recent trend is suggesting China’s attempt at “buying” influential left-wing politician around the world. In November, 2017 Australia’s Labour Party’s MP Sam Dastyari went against his own party on South China Sea. He later quit his party after he was found of taking financial favours from China.
In 2008, India’s Centre-left party – Indian National Congress signed a Memorandum of Understanding with Communist Party of China. Its contents are still hidden from the Government of India and the people of India.
Recent US Report has shown concern on President Elect Joe Biden not clearing doubts on his China policy.
How Can we Help Australia Post Ridiculous Tariffs on Australian Wines?
In 2020 China has directly or indirectly impacted many of our lives. Some of us have lost our jobs, some of us are taking a reduced salary. In fact, some of us are sitting at home instead of travelling; while some of us have lost our loved ones only because of communist party was incapable of controlling a virus outbreak.
As the entire world is struggling with this virus, Chinese economy continues to be on path of surpassing the US. Therefore, we should pledge to minimize buying Chinese products. It might be impossible to completely boycott Chinese products, but we can at least minimize it.
Install Cultivate Chrome Extension (non sponsored/affiliate link – We are not getting paid to post this). This plugin works on both Google Chrome and the new Microsoft Edge. It helps you understand the origin and seller location of a product on Amazon. It is a great tool to minimize your dependence on Chinese products. If you are lucky, this extension will also suggest some Made in USA alternatives
Buy Australian Wines – Australia desperately needs a new market for its wine and other products. This New Year and Christmas season, we should pledge to celebrate with at least one Australian wine!
Seasif’s Franco Favilla discusses the post-Covid economy and the price of gold
Although the Covid-19 pandemic isn’t over yet, there has been much discussion on the idea of a “post-Covid” economy, especially with the beginning of vaccination efforts in some countries. With markets throughout the world suffering the economic effects of the virus, experts have been looking towards the future –– and one of the topics that often comes up is the price of gold.
In August, the price of gold exceeded US$ 2,000 an ounce for the first time, driven by multiple factors. However, in November, advancements in Covid-19 vaccines led to a decrease in this trend, a result of the turbulent period we are going through.
“Regardless of the market volatility and the price changes that could occur over a given period of time, the fundamental fact is that the price of gold over the course of 2020 has reached an all-time high, and this, in my opinion, is very good news for the world economy,” explains Franco Favilla, founder and CEO of Seasif, a multinational company active in the extraction and trading of gold and oil.
According to Mr. Favilla, the main problem of the pre-Covid economy was the completely arbitrary nature of international finance. At one time, a ton of gold corresponded to a ton of currency, but since the 1980s, and at an impressive rate since 2000, the gap has widened enormously, so much so that today the relationship between the world’s currencies and gold is enormously unbalanced.
Total gold reserves around the world cover only 30% of currencies. This means there is nothing to cover and guarantee the value of money. In short, money has turned into a pure convention, a pure agreement between parties acting outside the market. Gold, on the contrary, guarantees democracy, because it protects savers and the market, offering an objective value for parameterizing every transaction.
“My hope, therefore, is that the crisis caused by Covid-19 will help to change finance, making it less ‘phantom’ and more linked to an objective dimension, based on gold, with obvious advantages for the real economy. Gold protects consumers, the most important component in any economic system: if you don’t have a market made up of consumers with a certain level of wealth, how can you sell? To whom? Consumer protection must come first, and gold is one of the main ways of protecting them,” states the CEO of Seasif.
Sustainability has also been at the forefront in discussions about the post-Covid world, as countries look towards establishing a more resilient global economy, one able to better withstand such events in the future –– and “green gold” may well be a part of that future. Green gold, in a sense, can be considered the “gold of the future” due to its ethical and sustainable extraction process. Seasif produces green gold, with a department entirely dedicated to green, and has allocated economic incentives to its continued production.
Even as 2020 draws to a close, the future may still look uncertain. But for those searching for greater security, gold may be one of the few certainties left.
How to Trade Shares for Beginners
Although expectations had been modest for 2019, the stock markets around the world had been active in 2019 and the positive returns seen so far have exceeded even the most optimistic expectations. Supported by easy monetary policies around the world, as well as by positive economic expectations for 2020, stocks continue to move, which makes a significant number of people deciding to start investing. Since stock trading is much harder than most of them think, let’s see some of the most important things beginners must consider in order to accelerate their learning curve.
Stick with the most liquid shares
Finding “the next big thing” is one of the illusions that seduces most of the beginners. They spend a significant amount of time looking for those companies that will have huge returns over the next months of years. Not even the most-skilled stock traders are able to do that, so why do you think you will?
Instead of looking for those shares, stick with the companies that already have a leading position in the industry. Google, Facebook, Microsoft, Apple, and Boeing are just some of the names that are popular at the time of writing, and looking at their performance in the long run, so far, they’ve managed to impress.
Study educational materials
Beginners fail to understand that share trading is a skill-based endeavor and study is one of the most important parts of the process. Study as many educational materials as you can and gain as much knowledge as possible because you’ll definitely need it. This guide and other similar ones will introduce you to share trading and help you understand the basic concepts. Remember this axiom: “Around 90% of the traders lose 90% of their capital in their first 90 days of trading”. Education is one of the main factors why beginners stumble into the same mistakes over and over again. You don’t want to be in the same position as most of the people who don’t learn and spend time to sharpen their skills.
Build a portfolio
Closely linked to our first tip, building a portfolio of uncorrelated assets is one of the most important things to consider, if you want to limit the damages of your mistakes. No matter how good you are, in trading, you won’t make money all the time. Diversification will help you minimize the effects of some losing trades. Don’t concentrate all the risk in a single stock and instead pick at least three or four names that might perform positively in the near-term.
Economy7 months ago
Seasif’s Franco Favilla discusses the post-Covid economy and the price of gold
China7 months ago
Nepal Hindu Rashtra: Time to Wrap Up Communism?
China7 months ago
Ridiculous Tariffs on Wines – China Australia Trade War Explicated
India7 months ago
Government Changing Syllabus to Include Sikh History in India
Business11 months ago
3 Easy Ways to Upgrade Your Company Culture
Travel6 months ago
7 Travel Safety Tips You Should Know
Europe11 months ago
How much money do you need to live comfortably in Spain?
Uncategorized5 months ago
The Right Sportswear Is Proving Critical For Performance