BUSINESS - The African Mirror

Nov

26

2024

BRICS+ countries are determined to trade in their own currencies – but can it work?

BUSINESS, BRICS NEWS

BRICS+ countries are exploring how they can foster greater use of local currencies in their trade, instead of relying on a handful of major currencies, primarily the US dollar and the euro. The forum for cooperation among nine leading emerging economies – Brazil, China, Egypt, Ethiopia, India, Iran, Russian Federation, South Africa, United Arab Emirates – emphasised this determination at their 16th summit in October 2024. Economist Lauren Johnston recently wrote a paper on this development. The Conversation Africa asked her for her insights. Why do Brics+ countries want to trade in local currencies? There are economic and political reasons…

Nov

22

2024

By EMMANUEL KWAKU SIAW

Ghana’s economic diplomacy: how three presidents with different ideologies dealt with the IMF and World Bank

BUSINESS

SINCE independence in 1956, Ghana’s leaders have followed a variety of global ideologies, from centre-right to socialist. But the country has also blended these with local priorities, like anti-colonialism and economic independence while balancing the pressures from the IMF and World Bank. As a foreign policy researcher, I recently wrote a paper examining Ghana’s approach to the International Monetary Fund and the World Bank under three presidents: Kwame Nkrumah, Jerry Rawlings and John Kufuor. I examined these relationships through the lens of Ghana’s economic diplomacy. My analysis starts with the idea that ideologies guide leaders in addressing issues like security,…

Nov

21

2024

By SOPHIE VAN HUELLEN and FUAD MOHAMMED ABUBAKAR

Why Ghanaian farmers have been unable to capitalise on record cocoa prices

BUSINESS

INTERNATIONAL cocoa prices have experienced a historic price surge, rising by over 300% in the space of 12 months from £2,166 per tonne of cocoa in April 2023 to £9,980 by April 2024. Prices have fallen since then, and are currently hovering around the £6,400 mark at the time of writing. This rally, which is the highest on record for cocoa, was driven by poor harvests in the Ivory Coast and Ghana. Powerful El Niño weather events, coupled with years of underinvestment that left Ghana’s cocoa trees vulnerable to diseases, have decimated yields. In February 2024 Ghana’s cocoa board, Cocobod,…

Nov

20

2024

By CORNE VAN WALBEEK and TIM EVANS

Tobacco isn’t a good investment – study shows a decline in stock prices since 2016

BUSINESS

ENVIRONMENTAL, social and governance investing, also known as impact or socially responsible investing, has become a popular concept. It’s based on awareness of the impact that firms have on the environment and on human wellbeing. Socially responsible investing recognises that these factors increasingly influence financial performance and thus investor returns. Companies in the tobacco industry have some of the most serious impacts on well-being. Tobacco is a unique product in that it causes the premature death of about half of its users who don’t quit. Organisations such as Tobacco Free Portfolios urge institutions not to invest in or provide financial…

Nov

15

2024

By DIANE ELSON

Economic policies encourage the careless use of people and the planet. Creating caring economies is the answer

BUSINESS

THE United Nations Framework Convention on Climate Change includes a Gender Action Plan, adopted in 2017. The plan aims to “enhance the gender responsiveness” of climate policy and climate action. It outlines specific actions and strategies to promote gender equality and the participation of women in climate change mitigation. This is in line with the mainstream approach to gender and climate change, which focuses on “including women” in the: sectors that are the focus of the transition to carbon-neutral economies finance (public and private) allocated to investments in transition decision-making bodies (public and private) that focus on transition. But feminist…

Nov

13

2024

By ERIC MAGALE

Kenya’s Hustler Fund is a flop. Why president Ruto’s plan to loan money to entrepreneurs hasn’t worked

BUSINESS

IT’S two years since Kenyan president William Ruto, in what seemed like a political gamble, rolled out a government-run microcredit scheme popularised as the Hustler Fund. Worth 50 billion shillings (US$409 million) a year over a five-year period, the low-interest loans were touted as the “magic formula” to start or grow micro, small and medium businesses. Now the fund faces an uncertain future owing to a high default rate. Eric Magale, who studies the complex relationship between finance, livelihoods and development, explains what went wrong. What is the Hustler Fund? Kenya’s 2022 general election campaigns were held amid a severe…

Nov

12

2024

By ANDREW ROBERT DONALDSON

South Africa’s civil service should be restructured, but a plan to reward early retirement won’t solve the problem – economist

BUSINESS

SOUTH Africa’s finance minister, Enoch Godongwana, announced in his October mid-term budget policy statement that the cabinet had approved funding for an early retirement programme to reduce the public sector wage bill. R11 billion (about US$627 million) will be allocated over the next two years to pay for the exit costs of 30,000 civil servants while retaining critical skills and promoting the entry of younger talent. The statement states that this will assist in improving the structure and organisation of the state. But past initiatives of this kind have done little to reduce costs. In 2019 there was a similar…

Nov

09

2024

By SETH ONYANGO, BIRD STORY

Africa’s creator economy is heading towards six-fold growth and an $18bn market – by 2030

BUSINESS

AFRICAN creators are cashing in. The continent’s creator economy, now valued at US$3.08 billion, is projected to hit a hefty $17.84 billion by 2030, expanding at 28.5% annually. Estimates from TM Global’s latest report forecast the biggest growth to come from a combination of surging social media engagement and expanding mobile connectivity. Africa’s young, digital-savvy population will also fuel demand, with 385 million active social media users across the continent engaging on platforms like TikTok, Instagram, and YouTube. Forbes puts the number of social media users at 420 million. Leading platforms include Facebook, which has 170 million users; TikTok, which…

Nov

08

2024

By BONITA MEYERSFELD

Big companies profit from poverty but aren’t obliged to uphold human rights. International law must change – scholar

BUSINESS

THERE is some disagreement among legal practitioners and scholars about whether corporations have duties under international law. Many argue that only states are bound by international law, and it is those states which are obliged to regulate how businesses operate within their borders. Corporations have only a voluntary responsibility to avoid committing human rights violations through their operations. I have been doing research in the area of corporate accountability for human rights violations since 2006. My most recent paper looks at the role of multinational corporations (multinationals) in benefiting from and perpetuating structural poverty in the global south. I argue…

Nov

08

2024

By SAMUEL ADOMAKO

Financial skills like managing debt are key to success, but Ghana’s small businesses don’t have them

BUSINESS

FINANCIAL literacy is vital for individuals and households. Simply put, it’s the ability to understand and effectively use various financial skills: budgeting, managing debt, making sound investments, and understanding financial statements. These skills are crucial for businesses, too – especially small and medium enterprises. Small and medium enterprises are widely recognised as the backbone of many low-income countries’ economies. The World Bank estimates that these businesses account for between 60% and 70% of jobs in sub-Saharan Africa and approximately 40% of low-income countries’ GDPs globally. Ghana is one of the countries whose economy relies heavily on small and medium enterprises.…