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Creating Capital for Development













AfroInvestors Dreams: The Science of Leadership Can Africa get on the global radar again ? This is the question from most analysts who wonder how huge infrastructure, economic, governance, inter and intra trade deficits could swing to surpluses in Africa… AfroInvestors brings you its 2017 summer edition with a focus on how private sector businesses can re-invent Africa’s New Economy; how developmental capital can buoy the private sector, and how stakeholders in government and business can dream again and push capital into the right hands. AfroInvestors summer 2017 examines how the giant Nations across Africa can address issues relating to gaps in vision or outright visionlessness and short-termism? The article Why Africa needs to Think Big again makes an interesting read for professionals, economists, public and private sector practitioners, Startups, and Entrepreneurs that aim to redefine the state of Africa’s Economy. The article re-lives days of African greatness and ponders the question of Africa’s significance, impact, and relevance in the comity of Nations, particularly when compared to other strugglers of the 1960s independence era such as Malaysia, Indonesia, and Singapore…Further, Ayo Teriba, Nigeria’s Chief of Economics, provides insights on a Different Nigeria… why policy action must be favorable to facilitate investment flow, and why an urgent need arises to mitigate headline risks that could limit investors confidence. Although, 2017 continues with speed in what is now confirmed a most significant year, marked by policy somersaults in the US, the trigger of UK Article 50, the ouster of Italy’s Prime Minister (by a no-vote Ref?), the recent spate of devastation in the Caribbean, and Africa’s lagging economy, AfroInvestors is optimistic that some light would emerge from these situations... and cites positive indicators from Canada. In her chat with Brad Duguid, ON; Canada’s Minister of Economic Development, AfroInvestors features government’s strategy to create financing options for new and emerging businesses as a solution to the lull in the job markets and an opportunity to creating thousands of employment, upholding families, and covering government deficits. On a last note, yours truly researched into long standing barriers that have limited women in their career journey over the years and the next steps to advance women, which include scholarship, partnership, mentorship, and sponsorship. Do get a copy on Amazon, Kindle, GooglePlay etc. Your comments are welcome. I look forward to sharing and reading AfroInvestors summer edition with you at Yours Truly,

Editorial Team: Publisher Olutoyin Oyelade Supervising Editor Rizalyn Vale Editorial Assistants Amanda Armstrong; Emily Vanderburg, Graphic Designer Ife Oyelade Graphic Consultant: Joe Figliola JR Graphics Researchers Earlyn Etienne Kunle Akingboju Editorial Board: Olusola Oyelade Rizalyn Vale Adekunle Adegbulu Olutoyin Oyelade Ayo Teriba (Advisor) Contributors: Ade Akintayo Amanda Armstrong Brad Duguid Kelly Brian Murray Olutoyin Oyelade Rizalyn Vale Earlyn Etienne Kunle Akingboju

Advertise With Us: 10 Four Seasons Place, 1061 | Toronto, ON | M9B 6H7 | t: 1.866.431.4838 | f: 416.649.5701| 2017 AfroInvestors© No statement in this magazine is to be construed as a recommendation for or against any particular investment. Neither this publication nor any part of it may be reproduced in any form or by any means without prior consent of AfroInvestors

Olutoyin Oyelade Publisher SUMMER 2017 | |





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SUMMER 2017 | |




“Thirdly is the poor “Mr Corruption” and his close cousin “Ms Nepotism” who are blamed for every vice across Africa from poor health to failing crops and poor air safety standards.”

I am sure you have read that article, the one about how civilization started in Africa. The pyramids in Egypt, civilization in Ethiopia and the sophistication with which the Mahdi in Sudan resisted the British, the Songhai Empire, etc. It got me thinking, how did Africans of ages past dream big dreams but we cannot today. How come there was a train line connecting Mombasa to the Cape in the 19th century but nothing links Lagos to Johannesburg today? Whatever happened to the bridge that was supposed to connect through horn of Africa to the mid-East via Djibouti or the Trans-Sahara gas lines linking the gas fields of Nigeria, Algeria and Libya, bringing gas to Europe? Across other developing nations of Latin American and Asia, what we see is development. The tallest buildings competing for records, high speed trains, factories, shopping malls and glittering hotels. Twenty years ago, only Saudi Arabia could be reckoned with in the Gulf States. Although, the GCC countries all had Oil & Gas, they needed a vision to transform themselves. Step forward; HRH Al Nahyan of the UAE brought leadership and vision to change the UAE, Emir Al Thani quickly followed in tow. I think back to the devastation of Lebanon and efforts of then Prime Minister Hafik Hariri to re-build the “Paris of the Mid East”, Beirut.

Understanding the Problem Ask the average person on the street on why Africa is still under-developed in the 21st Century and there will be good, rational excuses provided. Slavery took the best Africans away for the best part of five centuries, then came years of colonization and the plague years of dictatorships and “big-man” African leaders. Then there is the common scapegoat called “Corruption”. However, these good excuses do not explain why Nigeria had better GNP numbers than South Korea in the late 1960s. Africans cannot really say that Malaysia, Indonesia, Thailand or Singapore had a better head start up at independence

8 | | SUMMER 2017

from their colonial masters. These Asia Tigers and most

chance of a Clinton vs Bush election in the US in 2016; it is

independent African countries started on equal footing in

the ‘old boys’ network everywhere but this has not stopped

the 1960s as they rubbed shoulders at the Non-Aligned

these countries from working.

Movement conferences. What was different was that the

What am I saying? It is possible to develop in the midst

Asia Tigers had long-term planning and stuck to it whereas

of “corruption”. As far as I am concerned, corruption and

Africa nations changed one poor dictator for another on

nepotism is yet another excuse that people give for the

an ongoing basis for about 35 years.

under-development of Africa. It is not all dark and gloom

I have deciphered that the first problem militating against African development is a lack of long term goals, a defining

Yet it is not all darkness and gloom. I am quoting copiously

vision. Dubai has set up to be a global aviation hub, tour-

from Mehdi Hasan of Al-Jezeera here: On gender equity

ism destination and financial centre. Qatar is the leading

Africa is doing great. Rwanda has the highest proportion of

producer of LNG gas supplying liquefied gas to the ener-

female parliamentarians in the world; purportedly 64% of

gy-hungry markets of Japan, China, India and South Korea.

the legislators are women. There have been 7 female pres-

African nations have no such dreams or at least refuse to

idents across the continent in the last 5 years and a strong

articulate such a dream.

female Vice president in Zimbabwe while Nigeria recently

Richard Branson’s efforts to make Lagos an aviation hub

appointed 3 women to head some of their largest banks.

between Europe and America failed. Nigeria was the larg-

The GDP ratios are also very good, it is said that four (4)

est producer of LNG at some point, with the NLNG plant

of the ten (10) fastest growing economies in the world are

at Bonny in the Niger Delta supplying 10% of global output

African economies, that one (1) of three (3) Africans are

as recently as 2003/4. Since then, both Qatar at 80MTPA

middle class. It is also one of the fastest growing markets

and Australia at 81MTPA have overtaken Nigeria who still

for telecoms and mobile telephony.

produces at a capacity of 30MTPA it had achieved almost

Contrary to general perception, Western aid represents

20 years ago.

only 2% of GDP across Africa whereas African in Diaspora

Closely associated to lack of vision is a short-termism that

sent in a whopping $52billion back home in 2014.

is unparalleled across the globe. They use to say “…and Asians can’t play football”. Then came the J-league with a

Forward Plans

100-year plan to revamp football in Japan. In less than 20

Thus, the building blocks are already in place to move the

years, they had achieved their goals. South Korea’s three

Nations of Africa forward. I ask myself often, what will it

ship builders, HHI, SHI and DSME were conceived in the

cost to build a decent train service direct from Lagos to

1970s to compete with European and American builders in

Port Harcourt, $2 billion? Well a minister in Nigeria was

20 years. These Korean companies have now obliterated

said to have stolen or misappropriated $6 billion. A train

the competition.

from Lagos to Port Harcourt will pay for itself in a year in

Most African nations used to have the 5-year develop-

revenues generated and in life-saving of one of the most

ment plans; these 5-year plans were discarded in the early

dangerous motoring routes in the world.

1980s because they were inadequate but the plans were

Think bigger, how about linking Lagos to Johannesburg, the

not replaced by anything at all. We replaced “the inade-

2 largest economies in Sub-Saharan Africa. Business can

quate” with “the NOTHING”.

open between Lagos, Luanda, Libreville, Lusaka and Johannesburg. Such a train service can be built in stages and by

Thirdly is the poor “Mr Corruption” and his close cousin

concession to private businesses in each country along the

“Ms Nepotism” who are blamed for every vice across Af-

line. This line can bring Oil from Nigeria, Equatorial Guinea,

rica from poor health to failing crops and poor air safety

Cabinda, Angola & the Congos to the huge market of South

standards. I dare say that Africans are not any more cor-

Africa. It can bring all the minerals of Congo to the various

rupt than other people. There is huge corruption in China,

markets and take Copper from Zambia up north to Nige-

in Brazil, in Russia and in India, yet we celebrate the BRICS.

ria. Manufacturers between these countries can source

Nepotism is very strong amongst the Korea Chaebol com-

raw materials amongst themselves but most importantly,

panies, Saudi, UAE and Qatar royal establishments. All

food shortages, shortage of workers and immigration can

British Prime Ministers are said to have graduated from

be solved in one single move.

Oxford except one, who went to Cambridge while almost

How about a simple flight service between Dakar and

all French leaders and captains of industries graduated

Lagos? There are no direct flights between the 2 biggest

from the Ecole de Polytechnic de Paris and there is a good

economies in West Africa. Why do I need to go to Paris first

SUMMER 2017 | |


Contrary to general perception, Western aid represents only 2% of GDP across Africa whereas African in Diaspora sent in a whopping $52billion back home in 2014. About The Author:

rather than go directly to Dakar from Lagos or Accra? No other people can help African right their history. The

Ade holds an MBA from Manchester Business School, an M.Sc. in

Arabs, Asians, Latin Americans took their destinies in their

Mechatronics, Kings College, London, and a B.Eng. in Mechanical

hands and re-wrote their stories. Today, the leading air-

Engineering from University of Lagos. He was part of the team

lines are in the Middle-east, the biggest heavy industries

that executed the Gordon LNG A$50b project in Western Australia

in Japan and Korea, the Asian Tigers revamped their econ-

gathering even greater experience in procurements, contracts and

omies. African nations similarly need bold ideas again in

supply chain management. He joined Global E&P company total

health, education, military, agriculture, industrialization,

Upstream (TUPNI) for the Egina Project offshore West Africa and

transport and logistics among other endeavours of life.

is now at Total, South Korea where he holds package management responsibilities for LLI and Engineering functions.

Think Africa, think big again!

10 | | SUMMER 2017

SUMMER 2017 | |


“East Africa’s economy is a mixed picture. Inflation is at low

and poor. Yet daily life remains a struggle for many. An-

to moderate levels, economies are growing, and tourism

other challenge in the region is HIV/AIDS, which, although

is a major money earnerG however, Tanzania, Uganda,

declining in many areas, has left over two million children

Kenya, Rwanda, and Burundi are all ranked in the bottom

orphans. Malaria also claims the lives of countless East Af-

fourth of the global UN Human Development Index. Life

ricans daily. Rates of secondary school attendance remain

expectancy averages around 53 years for the region as a

low throughout the region (the highest attendance rate by

whole. Annual perRcapita income levels are just a fraction

far is in Kenya, at 40%), and corruption is rampant.” R Lone-

of what they are in most Western countries. Reliable bank-

ly Planet R East Africa (2012)

ing services and savings accounts remain inaccessible for

Africa is known by most of the world as a continent plagued

most people, especially rural dwellers, and its a common

by poverty, disease, violence, and corruption. It is known

scenario for those few students who make it through sec-

as a place characterized by hopelessness, destined to re-

ondary school to be faced with meagre or no job pros-

main a place in need of help and pity from the rest of the

pects upon graduation. These figures are tempered by the

world. The media plays a large role in creating this image.

extensive informal economy that exists throughout the

But, this is far from the truth. I believe Africa is a continent

region, as well as by wide economic variations between

filled with talent, rich culture, beauty, and opportunity.

rural and urban areas. There are also significant income

Lots of opportunity. Africa has the youngest population in

disparitiesG Kenya, for example, one of the world’s poorest

the world with 200 million people aged between 15 E 24,

countries, also has one of the largest gaps between rich

constituting more than 20% of Africa’s population2. It is a

12 | | SUMMER 2017


continent filled with young people, where securing decent

life for themselves, their communities, and their coun-

employment is often like finding a needle in a haystack.

tries. In Kenya, children grow up speaking three languages

‘Many young Africans find themselves unemployed or,

(Kiswahili, English & their mother tongue) and have an im-

more frequently, underemployed in informal jobs with

pressive knowledge and understanding of currents events

low productivity and pay. Of Africa’s unemployed, 60% are

and politics in their country and around the world. Kenyan

young people and youth unemployment rates are double

children are very disciplined, engaged in national issues,

those of adult unemployment in most African countries.” In

and artistically talented. They seem to study and learn ev-

Kenya, and many African countries, unemployment and ac-

ery chance they can get, eager to perform well amongst

cess to education are a few of the biggest challenges faced

their peers (class position is very important) and become

by youth. While primary education is “free” in Kenya, many

competitive in the challenging employment market. This is

families cannot even afford to send their children to pub-

common across East Africa. The world is rapidly changing

lic school because of the costs of uniforms, shoes, books,

and young people around the world are taking initiative

pens, bags, and exam fees. The education system is poor

to create their own futures using entrepreneurship, tech-

and teachers are paid very low wages which often results

nology, and innovation. Young people are connected to

in their spotty attendance. PostEsecondary education is

endless amounts of information available through their

often out of reach for many due to the high costs. Despite

smartphones, bringing down barriers to education and

the endless challenges they face, young Africans are smart,

connecting them with knowledge, ideas, skill development,

talented, hardworking, and determined to create a better

finance, and a global network. These young people have

SUMMER 2017 | |


the ability to create employment for themselves and others, establish innovative businesses, and stimulate economic development. They are the future of Africa, the ones determined to make positive change, and it is time we do more to support them.

1. Economic Development in Africa | Youth There are many factors that contribute to the economic development of a country and to job creation for youth. The leadership of a country, levels of corruption, and external factors, such as disease and conflict, to name a few. Known for safaris and beautiful beaches, East Africa’s tourism industry and economic development was recently hit hard due to Ebola and terrorism.bTourism is an extremely important part of East Africa’s economy, providing meaningful livelihoods and employment for thousands, promoting environmental conservation, enabling community development in the most remote rural areas, and bringing greater cultural awareness and understanding to both foreigners and locals. A small Ugandan social enterprise, Heart of Edirisa operating in the Lake Bunyonyi region, is just one example of a business in the tourism industry struggling to remain profitable. Heart of Edirisa provides valuable employment opportunities to the people of Lake Bunyonyi through community treks, homestay experiences, food purchases, transportation, and tourists’ souvenir purchases. The community depends on tourism for their livelihoods and is affected deeply by epidemics on the other side of the continent. Or rather, by the Western world’s ignorance and tendency to view Africa as one country. Or their tendency to assume anything bad happening in one part of Africa affects the entire continent, and everywhere is a dangerous place that must be avoided. This was proven by the recent Ebola outbreak and the drastic affects it had on the entire continent’s economy. Despite the challenges faced by the region, Rwanda is a great example of a country that is taking big strides in economic development and investment in its young people, after completely transforming since the genocide in 1994. Unlike the rest of East Africa, Rwanda has much less to offer in terms of tourism as a small landElocked nation with only a few national parks, Gorilla trekking, and Lake Kivu to offer. But, unlike the rest of East Africa, Rwanda is known for its peace and safety, minimal corruption, safe and modern public transportation, cleanliness, and conservation efforts. Rwanda’s President Paul Kagame is focused on two very important things for his country’s development: entrepreneurship and youth. Rwanda is the youngest country in East Africa (65% youth). It is also the 10th least corrupt country in Africa which plays a significant role in attracting foreign investors. And perhaps one of the most notable statistics about Rwanda today is the fact that it is the only country in the world that has more women in parliament than men (64% women). Rwanda is one of few African countries that is on target for achieving most of the Millennium Development Goal (MDG) targets, including gender equality where the country has satisfied all MDG indicators. “Rwanda is a nation with high goals and a sense of purpose. Our vision is to create prosperity for the average Rwandan citizen. We are attempting to increase our gross domestic product (GDP) by seven times over a generation, which increases per capita incomes by almost four times. This, in turn, will create the basis for further innovation, cre-

14 | | SUMMER 2017

There are over a dozen hubs in Nairobi with different specialties including technology startEups, creativity and poetry, engineers, architects and computer scientists.

ative thinking, and a host of progressive human values: interpersonal trust, tolerance, and civicRmindedness. All this together will strengthen our society. ...It is increasingly clear to us that entrepreneurship is the surest way for a nation to meet those goals and to develop prosperity for the greatest number of people. In fact, government activities should focus on supporting entrepreneurship not just to meet those measurable targets, but to unlock people’s minds, to allow innovation to take place, and to enable people to exercise their talents.” – President Paul Kagame, Rwanda, In the River They Swim, Essays from around the World on Enterprise Solutions to Poverty There is no shortage of talent, intelligence, and determination amongst youth in Africa. But, the issues and challenges they face are controlled by a higher level E the elders, the powerful, and the wealthy elite. Corruption, lack of safety and security, unemployment, nepotism, and poor quality education are amongst the factors that inhibit their potential. Young Africans often lack opportunity and access to education, skill development, extraEcurricular activities, and work experience. But technology and innovation are bringing these things to young people in the most remote areas of the world.

2. Entrepreneurship, Technology & Innovation While the world listens, reads, and watches all the bad things that have happened in Africa, the good things are rarely considered newsworthy. The good like booming cities filled with tech startEups, entrepreneurship, development, and innovation. Like Nairobi, known as “Silicon Savannah”. In the busy, overpopulated hub of East Africa, technology startEups and innovation hubs are well established and popping up on a regular basis. There are over a dozen hubs in Nairobi with different specialties including technology startEups, creativity and poetry, engineers, architects and computer scientists. These hubs are physical coEworking spaces and communities of likeEminded people, entrepreneurs, innovators and leaders.It should be no surprise that the technology and startEup industry in Kenya is growing and likely to continue at a very fast pace. Almost everyone has a mobile phone, connected by technology in all corners of the country with young people increasingly passionate about everything techErelated. Kenya is wellEknown for their brilliant invention MEPesa (M for mobile, pesa is Swahili for money), a mobileEphone based money transfer and microEfinancing service – a service which is vastly superior to the mobile finance apps available in most developed countries. Chat channels like Whatsapp and Twitter are especially popular. While Nairobi is a hot spot for innovation and technology hubs, there are dozens of other hubs across East Africa and the rest of the continent. In Kenya, you will find the most wellEknown hub is iHUB supported by Google. In Rwanda, there is KLab, The Office, Hehe Labs, Rwanda Creative Hub, and Innovation Village to name a few. Several other smaller hubs are starting to sprout up outside of the capital cities such as LakeHub in Kisumu, Swahilibox and Mombasatech in Mombasa, and Rift Valley Innovation Centre in the Rift Valley, all in Kenya.

LAKEHUB LAKEHUB is the only innovation and technology hub in Western Ken-

SUMMER 2017 | |


ya and the very first hub in Kenya outside of Nairobi.

startEups in Africa. With only 22% Android and IOS

Unlike iHUB and some of the others hubs in Nairobi,

(smartphone) penetration in Kenya, SMSEbased mo-

LAKEHUB is unique because of their very young team

bile startEups are most common due to 70% penetra-

and humble beginnings. LAKEHUB was founded by a

tion with other mobile devices. In Kigali, Rwanda, the

smart, humble 23Eyear old entrepreneur, web and

innovation hub KLab hosted a Mobile Application Ide-

mobile developer James Odede and some of his peers

ation Pitching Competition as a student project. Young

at Maseno University. While LAKEHUB was started in

technology enthusiasts pitched their ideas for a mobile

its initial form in 2013, the physical hub was official-

application to a panel of judges.

ly launched and opened their doors this past March 2015. They now have a small office space where young

Mobile Tech StartRUps

entrepreneurs, developers, designers, artists, and tech

enthusiasts spend long hours collaborating and work-

Efinancing and money transfer service that relies on

ing on brilliant new ideas and ventures. They already

mobile networks, not the Internet. It allows users to

have over 1,200 members! LAKEHUB is also involved

pay bills and school fees, buy groceries, or make cash

in social good and community initiatives. They are cur-

transfers. In 2014 alone, M-Pesa, which was created

rently building free websites for schools which in turn

and launched in Kenya, facilitated over 40 billion US

provides their members with valuable experience. Fi-

dollars worth of

nancial literacy, especially amongst women and young

transactions. The app is now being used in numer-

girls, is one of the social issues they have chosen to fo-

ous other African countries, as well as in Afghanistan,

cus on. James recognizes LAKEHUB’s young communi-

India and Eastern Europe. Today 17 million people

ty as their biggest strength. Everyone on the LAKEHUB

in East Africa, India, Romania, and Albania—many of

team is under 27 years old. The LAKEHUB community

whom are on the financial grid for the first time—use

is young, creative, hardworking, determined, and pas-

MRPesa. “It has been revolutionary,” says World Bank

sionate about technology and innovation.

economist Wolfgang Fengler. “It has changed lives,

Their biggest challenge is finding partners, investors,

businesses, and the perception of Africa, and brought

and donors to sustain their operations and support

substantial flows into the financial system that would

their growth. Another challenge they face is the low

have otherwise been lying literally under mattresses.”

skillset in the region, with young people looking for

A staggering 42% of Kenya’s GDP is transacted through

mentorship and training to improve their skills, and re-

M-Pesa.” –

luctance from industry players to work with them. Five

years from now, James dreams of having 10 – 15 suc-

tEup based out of Nairobi, founded by a Canadian.

cessful tech companies emerge from the region and a

Arifu is an educational platform designed to help Ken-

bigger space to provide further training and skill devel-

yans improve their income. The mobile tech startEup

opment. These hubs act as startEup incubators, office

provides entrepreneurship training, financial literacy,

space and community places for people to connect,

technical skills, and more through SMSEbased messag-

learn, work, and collaborate in a supportive communi-

es. The platform is designed to educate underserved

ty of likeEminded individuals. Unemployment is one of

communities through small, easy to understand pieces

the biggest challenges in the developing world, espe-

of information.

cially amongst youth, and these hubs are a critical part

of supporting entrepreneurship and creating employ-

roughly 44 and a half million—and only 7,250 doctors

ment for youth. After spending a few hours at iHUB

to serve it. MedAfrica provides people with basic infor-

in Nairobi, the most notable thing about it was their

mation about health and medicine, possible diagnoses

supportive and collaborative approach to partnership

for symptoms, and connects them, through a directo-

and interacting with other hubs.

ry, to doctors and hospitals.

Their corruptionEfree environment was the most in-

spiring thing I learned, in an area known for bribery

launched in Uganda. WinSenga monitors the heart

and fraud.

rate of an unborn baby and provides a diagnosis that

Mobile Technology Mobile technology is one of the biggest trends in the entrepreneurship, technology, and innovation space right now, and there is no shortage of mobile tech

16 | | SUMMER 2017

M-Pesa | the popular and famous micro-

Arifu | A promising mobileEbased tech star-

MedAfrica | Kenya has a population of

WinSenga | A lowEcost mobile app that was

is then sent to the mother via text message, along with suggestions for possible actions that can be taken


Young Leaders

From Nairobi to Kampala and everywhere in between, creative and talented young musicians and artists are using their talent to spread a message, inspire others, and hopefully create change. These are artists writing, singing, and speaking about important issues in their communities such as politics and corruption, gender violence and women’s empowerment, poverty, HIV/ AIDS, and more. Poetic Hours and Jam Sessions are just a few of the spaces where you will find dozens of young people gathered for music, inspiration, and positive messages.

our communities and countries. These are the young people that will lead without corruption, create without fear or resistance to change, and build successful industries and communities. These are the young people that will lead with honesty, integrity, and good intentions. These are the young people that will utilize their intelligence, creativity, and hard work to develop ideas, initiatives, and businesses. These are the young people that will work hard for economic development, job creation and povertyEeradication for themselves, their families and their communities. .

There are many examples of youth sharing inspiration through music. Take Sarabi, an amazing band of 8 youth in their early 20s from Mathare, a slum in Nairobi. The group was discovered when they were only 11 years old. They are very talented musicians with a focus on spreading positive messages and raising awareness of political issues in Kenya. Another is an 11EyearEold boy named Jeffery. Living on the streets of Nairobi, Jeffrey raps for spare change speaking catchy lyrics that he wrote himself. Unfortunately, with all of these stories of young leaders, innovators, and entrepreneurs, the sad reality is that there are still too many young people with bright futures ahead of them that never get to realize them.

About The Author:

Young people with the potential to be doctors, lawyers, entrepreneurs, and presidents. Young people

Born and raised in Toronto, Amanda graduated from The Richard Ivey

with the potential to travel the world, create jobs, and

School of Business at Western University. She has a strong business

spur economic development. Without the basic neces-

background and diverse international experiences. Her first experience

sities to foster survival E clothes, shoes, shelter, food,

in Africa was to launch a community-based micro-enterprise in Ken-

and education –, let alone growth and development,

ya in 2009. She recently returned from a tour of East Africa to further

these young people will never have the opportunity to

her understanding of social innovation and start-up ventures in the

achieve. Every child has the potential to be a leader, an

region, during which team she conducted research for a Toronto-based

innovator, or an entrepreneur. If only we start investing

social enterprise on the feasibility of launching a design hub in Kenya.

in young people, supporting them, mentoring them, hiring them, believing in them, and giving them opportunities.These are the young people that will develop

SUMMER 2017 | |





By Adekunle Akingboju and Earlyn Etienne There are 87,000 international students enrolled in Canadian higher education. International student enrolment grew from 159,426 in 2003 to over 290,000 in 2013– an 84% increase. Of all full -time international students in pro-

(13%) and Sub Saharan Africa (12%).

Casa Foundation Scholarship: The Mandate

gramme Canada, 67% are enrolled in an undergraduate, whereas 33% are postgraduates. With the costly amount

CASA Foundation in an effort to achieve one of its man-

of international tuition fees, international students began

dates “Educational Support Services’” has recognized

to encounter serious financial risks in the completion of

the gap in the provision of scholarships for international

their studies. Some of the problems encountered include:

students in Canada. To assist the less privileged in the community and fulfill its mission, it was determined that

• obtaining money for living expenses,

international students would benefit from some financial

• obtaining money for tuition fees,


• arranging for funds transfer from their home country • providing proof of sufficient funds to the Canadian au-

Casa Foundation, therefore, commissioned its research

thorities to enrol for studies in Canada.

team to investigate the viability of an international student

The students that suffer the highest risk to completing

scholarship as a solution to the gaps in students funding

their education are as follows: Students from Oceania

in Canada. The research analyzed the impact of existing

18 | | SUMMER 2017

scholarships available to international students, based

tional Students in Atlantic Canada...� ( The Economic Impact

on information collected from a variety of sources: gov-

of International Education Report commissioned by the

ernmental agency reports, survey data, private donor re-

Department of Foreign Affairs and Trade, Canada). Canada

search and existing scholarship databases. The research

derives $8B annually from international student expendi-

concluded that although, there are several existing schol-

tures including tuition and living expenses. In 2009, the

arships, fellowships and grants available to international

presence of international students created over 83,000

students, many are primarily focused on postgraduate and

jobs and generated more than $291M in government rev-

graduate studies and have narrow foci or areas of study. In

enue to Canada. However, an insignificant element of that

addition, there is no niche selection for the students most

surplus revenue goes into financing international student

in need; rather the selection is based on the donor objec-


tives and priorities. These findings highlight a need for the establishment of The table below provides an average summary of student

an undergraduate degree scholarship that international

expenditure for which assistance is required and from the

students would benefit from. Casa Foundation has there-

above table, the “Cost of education is one of the factors

fore obtained an approval from its Governing Council to

affecting an international student’s choice of study desti-

establish its Scholarship Program, with provision made for

nation. In the Economic Impact of Post-Secondary Interna-

SUMMER 2017 | |


its administration with Partners.

Objectives and Approach

The Casa Foundation Scholarships now provides scholarships to eligible international students in Canada. Casa Foundation Scholarship Program is currently administered by two Canadian Institutions:

Casa Foundation Scholarships was launched in 2015 to meet the needs of International Students. The Scholarship

Sheridan College

is a three-pronged initiative that supports the efforts of the

Centennial College

public and private sector in the following critical areas: To bridge the gaps in funding support to students in PostSecondary institutions, who have financial gaps that might hinder the completion of their studies; To provide grants to innovators to facilitate the implementation of new ideas and inventions To provide scholarships to qualified, exceptional students, who have recorded above average grade points in their studies (as recommended by the Scholarship administrators).

20 | | SUMMER 2017

Earlyn Etienne

Adekunle Akingboju About The Author: AfroInvestors Research Team is a group of young talented entrepreneurs drawn across various professions in the infrastructure, health, and education sector. For all enquiries kindly send your emails to

SUMMER 2017 | |




In this interview with AfroInvestor’s team, Canadian Minister for Economic Development - Brad Duguid bares his mind on Ontario’s Plan to prioritize Infrastructure development through Private sector participation and Create New Jobs Today for Ontario’s Future. Read more on Ontario’s agenda to Increase high traffic Roads, support large Corporations expanding to Ontario and expand access to SME funding to develop Ontario. AfroInvestors: What is the expected impact of the 300,000 jobs to be created by government by 2019 given the current state of the economy? How feasible is the job creation plan and when can families begin to enjoy the benefits of this initiative? Minister: The government’s number-one priority is growing the economy and creating jobs. Ontario’s plan is reducing business costs, keeping tax rates competitive, building strategic partnerships, helping businesses go global, strengthening the financial services sector, and investing in training and education. The Province is also investing in a low-carbon economy and developing new strategies to guide its approach to the sharing economy and social enterprises. More than 600,000 jobs have been created since the recessionary low in June 2009. Ontario is projected to create more than 300,000 jobs by the end of 2019, which would bring the total to more than 900,000 net new jobs over a 10-year period.

SUMMER 2017 | |


AfroInvestors: The Government of Ontario has run a deficit budget since 2003. Although, the current government is targeting a reduction in deficit in 2016, and then a balanced budget by 2017, how realistic is this target given the rising debt/cost profile of the province? Minister: Ontario’s Plan to Eliminate the Deficit: This bar chart compares Ontario’s deficit forecast to its performance from 2009–10 to 2018 –19. It shows that Ontario has beaten its deficit targets every year from 2009–10 to 2014–15. Looking forward, the 2015–16 deficit is projected to be $5.7 billion, a $2.8 billion improvement compared to the $8.5 billion deficit forecasted in the 2015 Budget. In 2016–17, Ontario’s deficit is projected to be $4.3 billion, a $0.5 billion improvement compared to the $4.8 billion deficit forecasted in the 2015 Budget. Ontario is projected to balance its budget in both 2017–18 and 2018–19. AfroInvestors: In your view are the government policies on infrastructure and economic development well directed to attract investment and create new innovators and entrepreneurs? Minister: Ontario is investing more than $137 billion over the next ten years in public infrastructure to create jobs and help the Province grow and prosper. This will result in an overall investment in infrastructure of about $160 billion over 12 years, starting from 2014-15. The 12 year commitment includes $31.5 billion in dedicated funds through Moving Ontario Forward. o

About $16 billion for transit projects in the Greater Toronto

and Hamilton Area (GTHA); and o

About $15 billion for transit, transportation, and other infra-

structure priorities outside of the GTHA. AfroInvestors: Do you find the regulatory framework adequate enough to address both the competitive landscape and risk factors for investors? Minister: The government is taking comprehensive steps to modernize Ontario’s regulatory framework and ensure that the province remains a competitive place to do business and invest, while protecting the public interest. Ontario’s Business Growth Initiative, announced in the 2015 Fall Economic Statement and reiterated in the 2016 Budget, is a five year, $400 million commitment to increase the competitiveness of Ontario’s businesses. Regulatory modernization is one of its key pillars. Through the Open for Business initiative, the government has continually reviewed regulations to ensure they are appropriate and

24 | | SUMMER 2017

Ontario has set a target of reducing burden for businesses and external stakeholders by $100 million by the end of 2017.

More than 600,000 jobs have been created since the recessionary low in June 2009. Ontario is projected to create more than 300,000 additional jobs by the end of 2019, which would bring total job creation to more than 900,000 net new jobs over a 10-year period. do not impose unnecessary burdens on business. The government is refreshing this initiative with a renewed and stronger mandate to root out existing regulatory burdens, and challenge new regulations. The mandate will be executed through several tools, including: x A Red Tape Challenge - an online consultation strategy that will allow all Ontarians to work collaboratively with the government to identify and reduce regulatory burdens while maintaining public interest standards; o

A Regulatory Burden Reduction Team with a dedicated re-

sponse commitment to address high-impact regulatory bottlenecks that impede business growth and competitiveness; o

A Regulatory Centre of Excellence that will identify and cham-

pion international best practices for regulation; o

A Regulatory Modernization Committee to oversee and en-

hance the regulatory challenge function of the renewed mandate; and o

A Government Modernization Fund to accelerate the modern-

ization of outdated service delivery and regulatory processes. Ontario has set a target of reducing burden for businesses and external stakeholders by $100 million by the end of 2017. The 2015 Burden Reduction Report concluded that the government’s actions have resulted in $50 million in savings and 2.4 million saved hours for businesses in the last four years. The government is encouraged that this achievement to date puts Ontario well ahead of its target, and it continues to push for further progress. Stakeholder response to the 2015 Burden

SUMMER 2017 | |


Reduction Report has generally been positive. The Cana-

Ontario businesses forward through scaling up; and Low-

dian Federation of Independent Business announced it

ering business costs through modernized regulations. As

was pleased with Ontario’s progress on regulatory bur-

announced in the Budget, through the Business Growth Ini-

den reduction. The Ontario Chamber of Commerce also

tiative, the Province will commit $400 million over the next 5

welcomed the report, noting it demonstrates progress

years to support business growth. The strategy will build on

and a changing culture in government towards modern-

Ontario’s existing strengths and oversee the province’s shift

izing and harmonizing burdensome red tape. Ontario is

towards new areas of economic growth in the knowledge

committed to developing modern, outcomes-focused


and evidence-based regulations, helping to foster an innovative and supportive business environment while

AfroInvestors: What should we expect from the forthcom-

protecting environmental and health standards and en-

ing 2016 budget and how would this address some of the

hancing worker safety. By ensuring our regulations are

recent concerns in the budgeting and cost profile of the

up to date and relevant, the government is creating the


right climate for businesses to create jobs and grow the economy.

Minister: The 2016 Ontario Budget: Jobs for Today and Tomorrow outlines the next phase of the government’s plan to

AfroInvestors: What has been the impact of govern-

create jobs and economic growth. More than 600,000 jobs

ment support to SMEs in terms of sectorial expansion

have been created since the recessionary low in June 2009.

and new business development over the past two years? Minister: Traditionally Ontario’s economy has been underpinned by natural resources and manufacturing. However, our future economic growth will rely on our ability to leverage a high-skilled workforce to compete through innovation. Economically, Ontario is at a pivotal stage and must sharpen its competitive edge. That means investing more in ground-breaking, knowledge-based businesses that harness the initiative and skills of our people. The Business Growth Initiative is the government’s new strategy to increase the province’s global competitiveness. This initiative is built on the following principles: Creating a strong innovative-driven economy; Catapulting more

26 | | SUMMER 2017

Ontario is projected to create more than 300,000 additional jobs by the end of 2019, which would bring total job creation to more than 900,000 net new jobs over a 10-year period. The Ministry of Finance is forecasting growth in Ontario real GDP of 2.5 per cent in 2015 and 2.2 per cent in 2016. Ontario’s economic growth is now outpacing national growth, and is expected to continue being among the strongest in Canada over the next two years. Ontario is on track to balance the budget in 2017–18. While the Province continues to invest in the key public services families rely on, Ontario is making progress on its planto eliminate the deficit by: o

Investing in economic growth;


Transforming government and responsibly managing spend-

ing; and o

About the Authour: Brad Duguid currently serves as Minister of Economic Development and Growth. He was previous-

Addressing the underground economy to ensure businesses

pay their fair share of taxes.

ly Minister of Economic Development, Employment and Infrastructure, and Minister of Training, Colleges and Universities. Prior to that, he served as Ontario’s Minister of Economic Development and Innovation, during which time Duguid focused on creating jobs, promoting Ontario as a smart place to invest, building a culture of entrepreneurship and growing a strong, innovative economy. He ushered in Bill 11 (Attracting Investment and Creating Jobs Act 2012), a marquee piece of legislation that established the Southwestern Ontario Development Fund and made permanent the Eastern Ontario Development Fund. Previously, as Ontario’s Minister of Energy, Duguid launched Ontario’s Long-Term Energy Plan, which built on Ontario’s commitment to clean energy. Duguid’s involvement in politics began more than 25 years ago while working at Queen’s Park and on Parliament Hill in Ottawa. .

SUMMER 2017 | |




The SBECs provide services such as:

Consultations with business consultants, including review of business plans

Guidance on support programs available from all levels of government

Up-to-date information and access to current resource materials

The SBECs host seminars and workshops on business subjects, including

marketing, branding, e-business, business financing and exporting.

One Network Partners Who are the partners that make ONE network work for Businesses? Ontario’s Small Business Enterprise Centres (SBECs) How can Entrepreneurs and Small businesses be served? •

57 locations across Southern Ontario

SBECs provide entrepreneurs and existing small businesses (<10 employees) with access to information and

expertise to help them get started and succeed. •

The Centres are managed locally, administered provincially and supported by public and private sector part-

ners. •

The SBECs provide services such as:

Consultations with business consultants, including review of business plans

Guidance on support programs available from all levels of government

Up-to-date information and access to current resource materials

The SBECs host seminars and workshops on business subjects, including marketing, branding, e-business,

business financing and exporting.

Where are the Regional Innovation Centres ?(RIC) and What are their Roles? •

There are 17 locations across Ontario

Ontario’s RICs deliver innovation and commercialization programs and services to support innovation and

technology based firms. •

RICs unite business and community leaders to champion the development of regional innovation ecosystems.

Support from RICs include:

Entrepreneurial training

Access to market intelligence

Helping clients to become “investment ready”

Advice and mentorship (typically from serial entrepreneurs)

32 | | SUMMER 2017

plans. What Funding Options are Available to SMEs and Entrepreneurs in Ontario? Global Growth Funds: •

The Ontario Exporters Fund

Export Market Access

The Ontario Exporters Fund The Ontario Exporters Fund has been established to assist small and medium-sized enterprises (SMEs) to become export ready and help them gain/increase access to international export markets. The fund will be administered by the Ontario Chamber of Commerce (OCC) with the support and funding from the Ontario government. The Ontario Exporters Fund is intended to: •

Access to capital

Business Advisory Services The Ontario government through its Ministry of Economic Development (Business Advisory Services) supports Business development, innovation, and Entrepreneurship by offering tailored services to serve SMES as follows: •

BAS is committed to engage and support Ontar-

io’s existing and aspiring high growth small and medium enterprises producing tradable goods or services, which are predominantly between 10 and 500 employees. •

Field Offices:

26 Business Advisors located in 12 Southern On-

tario offices.

Central Region – Downsview

Western Region – London

Eastern Region – Ottawa

Business Advisors have strong connections to

associations and regional and municipal economic development offices.

Business Advisors through consultations with

company executives:

Develop an understanding of challenges and op-


Provide advisory support to develop strategic

plans for growth.

Connect high growth firms to a range of govern-

ment, association and private sector forms of support.

Act as sounding boards for strategic growth

Help SMEs better understand their export ca-

pacity and thereby improve their ability to access foreign markets •

Encourage SMEs to develop focused export mar-

ket access strategies •

Assist businesses realize their export sales ob-

jectivesThe OEF exists to help small and medium-sized enterprises (SMEs) become export-ready •

It helps SMEs gain or increase access to interna-

tional export markets •

The fund is administered by the Ontario Cham-

ber of Commerce with support and funding from the Ontario government The Ontario Exporters Fund is intended to: •

Help SMEs better understand their export ca-

pacity and thereby improve their ability to access foreign markets •

Encourage SMEs to develop focused export mar-

ket access strategies •

Assist businesses to realize their export sales

objectives Eligibility (OEF): •

Ontario SMEs:

With a minimum of five to a maximum of 500 em-

ployees •

Registered company (federally or provincially) for

a minimum of two years •

In one of the priority sectors of the Ministry of

Economic Development, Employment and Infrastructure Export market Access: •

Export Market Access (EMA) is designed to assist

SMEs to access and expand their growth in foreign mar-

SUMMER 2017 | |


kets •

employment Eligible companies may qualify for a contribution

covering up to 50% of eligible costs incurred to develop

The SWDF and EDF are available to Businesses located in:

export sales.

Southwestern Ontario Development Fund:

Such activities include market research, market-

Brant • Bruce • Chatham-Kent • Dufferin • Elgin •

ing tools, direct contacts and foreign bidding projects.

Essex • Grey • Haldimand • Huron • Lambton • Middlesex

Eligibility (EMA)

• Niagara • Norfolk • Oxford • Perth • Simcoe • Waterloo •


A small to medium-sized company with an ex-

port mandate, whose goods and services currently exist and are produced in Ontario

Eastern Ontario Development Fund:

A company with 5-500 employees, $500,000 or

Frontenac • Haliburton • Hastings • Ka-

more in sales

wartha Lakes • Lanark • Leeds and Grenville • Lennox and

Addington • Muskoka • Northumberland • Ottawa • Peter-

Registered company (federally or provincially) for

minimum of two years

borough • Prescott and Russell • Prince Edward • Renfrew

• Stormont, Dundas and Glengarry

Not receiving any other contributions from pub-

lic funds towards the activities contained in the funding application (with some exceptions)

Project Amounts

South Western Development Fund (SWDF) Eastern Development Fund (EDF)

Up to 15% of eligible project costs for a maxi-

mum grant of •

$1.5 million

Investments of more than $10 million that also

The SWDF and EDF are Ontario government sponsored

create more than 50 new jobs may be eligible for a loan of

Funds that:

up to $5 million •

Provide funding support for businesses, munici-

palities and not-for-profit organizations for economic de-

Successful applicants: you will need to contrib-

ute at least 50% of total costs from your own resources or through private financing

velopment in Ontario •

There is also a regional stream, which provides

funding for Economic Development Organizations and municipalities •

The fund supports projects that:


create jobs


encourage innovation, collaboration and cluster

development o

attract private sector investment

Business Streams Eligibility: To be eligible, businesses need to: •

Employ at least 10 people,

commit to creating at least 10 new jobs,

be able to provide 3 years of operations/financial


About The Author:

Kelly-Bryan joined the Business Development team at Ministry of Eco-

be located in, or plan to locate in, a community in

Ontario, •

nomic Development and Trade in 2005 to support the efforts of govern-

and invest at least $500,000 in their project

ment to assist the growth of SME companies to expand sales to domestic

Small Community Pilot Project:

and international markets. Prior to entering the public service, Kelly

Businesses with 5-10 employees

worked in marketing and telecommunications in the private sector. He

located in small communities may be eligible

attended the University of Alberta, receiving undergraduate degrees

for the These projects need a minimum investment of

and a Master’s degree in the history of North American public policy.

$200,000 over four years and a 50% increase in current

34 | | SUMMER 2017

SUMMER 2017 | |



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a) DĂŠjĂ vu? This is not the first time that Nigeria is facing a current account crisis. The first time was in the early eighties and it spelt doom for the Nigerian economy for the next two decades. This time is rapidly degenerating into early eighties-like doomsday situation in which oil price collapse is translating into a currency crisis, inflationary spiral, fiscal collapse, and recession. This should not be so at all as this time is fundamentally different from the early eighties, and Nigeria should easily find a way around the current account crisis by taking advantage of glaring opportunities on the capital account to move the economy forward. Such opportunities were not available in the 1980s. The essential dif-

40 | | SUMMER 2017

ference is that the global economy that had been burdened by a debt crisis when Nigeria confronted the current account crisis then is now awash with liquidity, and it should be very easy for Nigeria to attract large enough foreign investment inflows to compensate for the foreign income lost to the fall in oil price. Nigeria can rapidly build the capital account buffers required to cope better with the decline in income from oil exports.


Crisis of the early eighties

Nigeria’s first current account crisis came in 1982, about 20 years

emerging market peers are successfully attracting

after independence, and after almost a decade the of oil boom that

record levels of foreign direct investment and di-

started in 1973. The economic and financial realities facing Nigeria

aspora investment inflows. Nigeria should adopt

in the early 1980s were so bleak as the country was already bur-

immediate measures to join the ranks of these

dened with heavy external debt before the fall in commodity prices

countries and attract foreign exchange inflows on

triggered a current account crisis, and the emergence of the global

its capital account to offset the foreign exchange

debt crisis in 1982 triggered a severe global liquidity shortage for the

income lost on the current account because of

rest of the decade. The current account crisis thus coincided with

the collapse in oil price. Saudi Arabia is current-

a capital account crisis at a time when global illiquidity foreclosed

ly pursuing this strategy by attracting the world’s

any hope of relief from foreign investment inflows. Nigeria had to

attention to its non-oil investment opportunities.

go through a painful economic stagnation and structural adjust-

Nigeria is much better placed to do so than Saudi

ment. The economy deteriorated, Federal and State governments

Arabia because Nigeria has a much bigger non-

retrenched workers massively, multinationals exited the country in

oil economy than Saudi Arabia, thereby offering

droves, and infrastructure deteriorated. The situation was used to

much bigger non-oil investment prospects. A long

justify a series of military coups- December 1983, August 1985, and

and growing list of emerging markets is capitaliz-

November 1993, in which successive regimes blamed the ousted

ing on the global liquidity glut to attract and retain

ones for the nation’s economic woes, only to find out that the grim

record levels of foreign investment inflows.

economic situation was no fault of the ousted regimes. This grim


situation persisted until 1999 when the return of Nigeria to democratic rule coincided with a strong and sustained recovery in global commodity prices, accompanied by a sustained surge in global liquidity.


The current crisis

The way forward

The worrying fact about Nigeria’s external financial inflows is that two current account items, export revenue and diaspora remittances, are the only two significant sources of foreign exchange supply. Capital account inflows into Nigeria, in the

The oil price collapse that started in July 2014 has inflicted a cur-

form of direct investment and portfolio invest-

rent account crisis that has put downward pressure on Nigeria’s

ment, are very weak. And this must be immedi-

external reserves to the point that the Naira exchange rate has now

ately redressed.

moved from about N150/US$ to about N300/US$ by mid-2016:

f) Nigerian Government Monopoly Shuts Foreign Investment Out of Infrastructure Sectors

specifically, the inter-bank rate is now at N280/US$; while the BDC rate is now at N330/US$, both were almost at par at around N150/ US$ mid-2014. Government revenue has dwindled to the point that more than half of the States are unable to meet their workers’ salary commitments, and the Federal Government is funding its entire capital spending, and indeed 36.7 percent of its 2016 budget, with debt. Quarterly real GDP growth has slowed from 6.77 percent in the first quarter of 2014 to -0.4 percent in the first quarter of 2016, and stock market capitalization has fallen from a historic peak of N14 trillion in June 2014 to N8.2 trillion in January 2016, before recovering to N10.1 trillion in June 2016. Consumer price inflation has reached a six-year peak of 15.58 percent as a result of devaluation and increases in the electricity tariff and pump prices of petroleum products. These economic hardships are reminiscent of the early and mid-eighties, especially the foreign exchange rationing, dramatic movements in the dual exchange rates, government having difficulties meeting workers’ salary commitments, and a recession. But this time is quite different from the early eighties as Nigeria has a clear way out of the present crisis, unlike in the eighties when there was no way out.


Why this time is different

In 2015, Nigeria’s exports were US$45.89 billion, while diaspora remittances were US$20.41 billion, compared to foreign direct investment of US$3.06 billion, and foreign portfolio investment of US$2.54 billion . Such weakness in the capital account makes the oil price induced current account crisis more hurt full than it should have been in the presence of buffers from stronger capital inflows. Nigeria has the potential to attract and retain significant inflows of foreign direct investment into its large network infrastructure sectors, including rail transportation, gas pipelines, and electricity transmission, as it has successfully done in telecommunications, but failure to abolish government monopoly in these sectors keeps shutting the investment out. Nigeria’s stock of foreign direct investment is currently concentrated in two sectors, telecommunications and oil & gas. These are the only two sectors in which

The oil price induced current account crisis is happening at a time

the government has liberalized entry of foreign

the global economy is awash with liquidity and many of Nigeria’s

direct investment. Government monopoly in key

SUMMER 2017 | |


infrastructure sectors, like rail transportation, gas pipelines, and power transmission, obstructs beneficial FDI inflows. The new government in Nigeria needs to take immediate measures to break government monopoly in the critical the infrastructure sectors to allow the inflow of needful foreign investment. There are additional concerns that must be addressed to facilitate FDIs. 1.

Nigeria needs to be deliberate and intentional about attract-

ing sustainable FDIs. A clear operational, management, and regulatory framework for Investment receipts, divestment, and exit might be needful. While roadshows in Canada or UK are great, they may not be as effective to deliver the required results without the above. In the aviation sector, the recent experience of United (where long outstanding funds appeared trapped), or the Virgin Nigeria experience are still fresh. A clear plan (solution based plan) on deferred payment strategy to calm frayed nerves may have helped. 2.

In the international financial markets one is uncertain of the

reasons why Nigeria waited for JP Morgan to delist its bonds from EM Bond Index and what could have been done to save the day (and by who?) instead of fighting fires. (It’s a better strategy to keep the existing investor list growing, than spending scarce resources shopping for new ones. Current Investors drive new ones into a country based on their results and experience). 3.

Relatedly, Nigeria’s Economic team must appeal (In terms of

clout, capacity, skill, and competence) to the International community to do the damage control required to recoup lost investments and gain lost grounds. Remember we are on the Sell side of a tough market

Nigeria needs immediate investment inflows to overcome foreign exchange scarcity and infrastructure decay g)

Foreign investment inflows will solve the two main problems that have inflicted recession on the Nigerian economy: inadequate supply of foreign exchange and infrastructure decay. Attracting investment into infrastructure sectors will solve the two problems and will also make the Nigerian economy more competitive as infrastructure gaps are filled. The global economy currently presents a bleak outlook for commodity prices, exports and real economic growth, while offering bright prospects of continued liquidity glut. Developing countries with clear visions of how they want their economies to progress have leveraged on the global liquidity glut to attract record levels of foreign direct investment stocks. China leads the pack with US$1trillion in FDI stock in 2015, from only US$20 billion in 1990 --. A fifty-fold increase in FDI stock in 25 years. Rather striking is the fact that Nigeria had hosted US$8.538 billion in FDI stock in 1990, well ahead of South Korea who hosted US$5.185 billion, or India who hosted a paltry US$1.656 billion at the time, and even UAE who hosted only US$751 million. All three have since overtaken Nigeria as India’s stock of FDI reached US$282 billion in 2015, South Korea, US$171 billion, UAE, US$111 billion, compared to Nigeria’s US$89 billion. On the African continent, Nigeria was the top

42 | | SUMMER 2017

Foreign investment inflows will solve the two main problems that have inflicted recession on the Nigerian economy: inadequate supply of foreign exchange and infrastructure decay.

investment destination in the early nineties, but has been displaced by South Africa since the turn of the century. 4. Indeed. We can add a few notes on how the CBN FX policy can aid FDIs (your notes). There are a few concerns in some investment quarters about accumulated losses from investments made between December 2014 @180/N and March 2016 @335/N. This might beg the question of aggressive investment by a group. But the main Infra sectors (long term- rail, transport, aviation) are okay with a sound monetary policy in place.

It is easier for Nigeria to promote foreign investment inflow than it is to promote exports h)

Successive Nigerian governments have acted as though they were oblivious of these opportunities in the capital account. It is far easier and quicker for the Nigerian government to promote foreign investment inflow than it is to promote exports, given the current dull prospects for global economic growth, and Nigeria’s low export competitiveness arising from weak infrastructure. There is a large pool of money on the global scene that Nigeria can attract into its large network infrastructure sectors that include nationwide rail transport network, gas pipelines, and electricity transmission. Nigeria probably requires US$1 trillion investment in infrastructure over the next decade to close yawning gaps. The current global liquidity climate will deliver every cent of that sum if the new government can immediately break government monopoly in the sectors and engage the world to come and invest in these sectors. The time to act is now.

Overcoming age old Government reluctance to abolish its own monopoly i)

Nigeria has a very poor record of success in privatizing state-owned enterprises in its infrastructure sectors including telecoms and electricity, having more record of success in liberalizing the entrance of greenfield foreign direct investment than in privatizing brownfield projects. Efforts to privatize the national telecoms career, Nigerian Telecommunications (NITEL) failed catastrophically until it became moribund and its carcass

It is far easier and quicker for the Nigerian government to promote foreign investment inflow than it is to promote exports, given the current dull prospects for global economic growth, and Nigeria’s low export competitiveness arising from weak infrastructure.

sold about fifteen years after the GSM companies that pushed it out of relevance had been licenced. Nigeria’s telecoms infrastructure today depends on greenfield projects initiated by the GSM companies licenced from 2001. NITEL still went on to fail in spite of the fact that it was also given a reserve GSM license at no cost as the national career, but that also failed after a few years. The recent transfer of stateowned electricity distribution assets to private distribution companies (DISCOs) has created a situation in which many of the DISCOs seem to be more interested in what they can gain from the acquired assets than in deploying new investments required to optimise electricity distribution. Transfer of existing assets to private sector are best carried out through initial public offers (IPOs) that will ensure more transparency and sustainability as more capable investors can always buy out less capable ones. Successive Nigerian governments have also been very reluctant in privatizing state-owned network infrastructure assets like the obsolete narrow gauge railway transport system, pipelines, and electricity transmission infrastructure. Nigeria should put all existing

SUMMER 2017 | |


state-owned infrastructure enterprises on the market

geria’s US$15 billion . We are talking about relative abil-

through IPOs, while liberalizing the entry of foreign direct

ity of countries to convince their own nationals who are

investment for greenfield projects. The Nigerian Railway

resident abroad to remit funds into government coffers

Corporation (NRC) who has monopoly over the Nigerian

back home.

narrow gauge rail system is moribund, just like NITEL was


15 years ago, being effectively irrelevant to the populace, and it might now be better to bypass it and liberalize entry of high speed rail builders, replicating the pattern of reform in the telecoms sector that saw the arrival of wireless GSM technology supplanting outdated landlines that NITEL had superintended over from colonial days.

j) Key Differences in FDI, FPI, and Remittances

Why FDI is key

Of the three types of foreign investment, FDI is the easiest and most beneficial for Nigeria to attract at this time. They hold the prospect of bringing investment that is large enough to stabilize Nigeria’s foreign exchange situation, and are likely to look beyond short term macroeconomic risks, fixing their gaze instead on the medium to long term returns that are clearly high enough to more than compensate for short term risks. Such opportuni-

While it is appropriate to highlight investment opportu-

ties for high returns abound in rail and associated prop-

nities in infrastructure as obvious destinations for large

erty development opportunities across the country, pipe-

scalelarge-scale FDI inflows, Nigeria needs to boost all

lines (and fibre-optic cables) that should ideally be laid

types of investment inflows into all areas of the economy,

beneath the new rail lines, and power transmission that

although it is a fact that functioning infrastructure would

should also ideally be above the new rail tracks.

also boost investment inflows to all other sectors.

The two sectors in which the Nigerian government has

Greenfield foreign direct investment involves the creation

liberalised entry of investors, oil & gas and telecoms, for-

of tangible and irreversible investment, while brownfield

eign direct investment had flowed in to the point of satu-

foreign direct investment involves acquisition of existing

ration. If Nigeria should liberalize investment in rail, pipe-

projects. Both involve active managerial roles and tech-

lines, and power transmission, it is reasonable to expect

nology transfers.

a similar response from foreign investors who recognize

Foreign portfolio investment on the contrary only provide

Nigeria’s attraction as the last untapped big market in the

needful short and medium term liquidity, but areinvestment on the contrary only provides needful short and

world. Thus the major obstacle to the influx of FDI into large infrastructure projects in Nigeria is Federal govern-

medium term liquidity, but is fully reversible. Many refer

ment monopoly.

to FPI as ‘hot money’, as they can be very volatile. It gave

FDPI and Diaspora investment remittances are likely to

Nigeria US$6 billion in the first quarter of 2013, and that

be deterred by short term risks and would seek assur-

must have really been helpful, but was -US$387 million

ances for sufficiently high interest rates to compensate

in the third quarter of 2015, and that must have been

for the risks, and it would be best to engage them once

equally hurtful.

FDI inflows are underway to stabilise the situation and

Diaspora remittances are mostly irreversible current ac-

change the game.

But some countries have succeeded in encouraging in-

l) Why borrowing is not a sustainable option

flows of remittances on the capital account, through the

Nigeria cannot borrow her way out of the current crisis,

count private sector inflows that end up in consumption.

issuance of medium term foreign currency government bonds, with possibility of redemption in local currency on maturity. India did this by issuing multi-year bonds for its citizens in diaspora, thereby inducing capital inflow from remittances as well. Nigeria was the fourth largest destination for remittances in 1990, behind India, China, and Mexico. By 2015, Nigeria had dropped to sixth position, but more significantly, the gap in the quantum of funds remitted had widened from a margin of about US$7 billion in 1990 to US$50 billion in 2015, as India received US$70 billion and China received US$68 billion, compared with Nigeria’s US$20 billion. They had each received about US$22 billion in 1990, compared with Ni-

44 | | SUMMER 2017

as the projected debt service of N1.35 trillion in the 2015 federal budget is already 35.5 percent of the projected revenue, and 22.6 percent of the total budget. The reality is that revenue inflows in the first half of 2016 wereas considerably less than the budget projected, implying that borrowing and associated debt service may be higher than projected. China, the country that often gets mentioned as a willing bilateral creditor to Nigeria, hosts US$1 trillion in foreign direct investment. Nigeria should pursue the more sustainable strategy of attracting foreign investment into infrastructure. India illustrates the success and sustainability of this approach. Relying on foreign investment to fix infrastructure, and also provide

the foreign exchange required to stabilize the exchange

MCO, is expected to earn about US$120 billion, among

rate, by creating capital account buffers, will solve the two

other initiatives to attract FDI. Saudi Arabia is speaking


loudly and clearly to the world about her non-oil invest-

ment prospects.

m) Why ‘Diversification’ and ‘Buy Nigeria’ slogans may be wishful thinking

Nigeria has much bigger non-oil investment prospects

Unless infrastructure gaps are filled, the much talked about diversification of the Nigerian economy away from oil, towards manufacturing, agriculture and solid minerals, will not happen because it is the high cost of key infrastructure, particularly the prohibitively high road haulage costs in the absence of rail transport and high costs of fuel (electricity, gas, or petrol) because of inadequate supply, that has killed these sectors that once thrived in Nigeria. Talks about diversification when these vital infrastructures have not been fixed amounts to wishful thinking. Similarly, the rhetoric about Buy Nigeria sidesteps the fact that we need to Fix Nigeria before Nigeria can produce the things we need to buy. Once other key infrastructure is fixed, the way telephone lines in Nigeria jumped from only 300,000 in 2001 to 160 million in 2015, system-wide transaction costs will become much lower, making all sectors more competitive, diversification and Buy Nigeria will become realistic slogans.

Nigeria must Engage the World about the Future of her Economy n)

than Saudi Arabia, but is quiet. Nigeria now has to put a sellable story together on the economy, and engage the world. Nigeria has more to sell than Saudi Arabia. In his first year in office, President Muhammadu Buhari is openly engaging the world in his fight against corruption and insecurity in Nigeria, as these two have been the theme of the discussions with both foreigners and Nigerians in diaspora during his trips around the world. The President now needs to engage the world about the economy as well, about the opportunities for profitable investment in Nigeria. Especially now that his government is taking giant strides in making the country much more secure and much less corrupt. Nigerians in diaspora and foreigners alike are waiting to buy-in. Nigeria needs to mobilize all the foreign direct investment, foreign portfolio investment and diaspora investment that it can, but needs to learn how to engage investors and gain their confidence as a country with clear enough vision and strong enough sense of purpose that others can make large-scale investment commitments in.

Nigeria needs to take immediate steps to open up to foreign investment. The first and perhaps the most important step is to ensure the ease of entry of potential investors into infrastructure sectors that are currently under monopoly. The second step is that Nigeria must engage the world about the future of her economy, like India and Saudi Arabia are currently doing. India is fast becoming one of the world’s top investment destinations. India received an FDI inflow of US$44 billion in 2015. This is the result of a determined investment-friendly strategy that shows that countries that court investors in the face of the current easy global liquidity conditions will receive investment. India also received the biggest inflow of remittances in the world, getting a record US$70 billion in 2015. India has learnt how to get the message across to both non-resident Indians (NRIs) and foreigners, and both groups respond very resoundingly! India’s current slogan is ‘Make in India’, which attempts to attract more FDI into manufacturing in India, after more than a decade of attracting FDI to infrastructure that used to be under government monopoly.

About The Author: Ayo is the CEO of Economic Associates (EA) where he provides strategic direction for ongoing research and consulting on the outlook of the Nigerian economy, focusing on: global, national, regional, state, and sector issues. He was a Member of the National Economic Intelligence Committee (NEIC) from April 2009 to April 2012, where he conducted periodic reality checks on macroeconomic, fiscal and monetary developments in Nigeria

Saudi Arabia is also currently trying to attract foreign investment to make up for export income lost to oil price fall. A planned 5% IPO in the state-owned oil giant, ARA-

SUMMER 2017 | |


Advancing Beyond the Ceiling Olutoyin Oyelade

For too long the subject of a glass ceiling on women’s careers has dominated corporate sector debates and engaged practitioners’ attention. Scholars ascribe the many travails of females’ aspiring to top level roles to invisible barriers and hurdles that senior leaders failed to acknowledge, yet corporations have been known to suffer dire financial consequences for shutting women out of the corner office. Interactions with supervisors and juniors indicate that there are recurring limitations that could negate the core ethics of the workplace. While stakeholders in the public and private sectors continue to propose solutions and advocate for palliative and remedial steps to address the visible and invisible ceilings on female career progress, the number of female CEOs remain significantly unchanged. The question is why are only a few corporations pushing an agenda that seems to be the panacea to firm performance and sustainability? And why have the early warning signals of gender inequality remained in corporate corridors— 40 years after the glass ceiling was identified? Advancing Beyond the Ceiling deviates from the traditional approach of limiting the gender barrier dilemma to societal, natural, and organizational practices. The book researches into other imposed limitations, including issues of self-esteem, character traits, and male dominance that could stall women’s advancement. The author proposes reasons for females to spearhead their advancement through scholarship, partnership, mentorship, and sponsorship, amongst other practices in their quest to crack the glass ceiling. As a C-level executive in the banking sector till 2010, and now the Founder of an investment firm post-2010, the author explores the struggles, setbacks, and stockades that limit senior to middle female officers in their career trajectory… About The Author Olutoyin Oyelade is the Founding Partner at InVcap, an Investment management firm. InVcap is Lead Investor at SplashWorld Waterparks, Nigeria—reputed to be one of the first Waterparks in West Africa. InVcap recently completed its investment at EntrepreneursPoint, an Executive Office/ co-working Centre in Canada. Olutoyin has 24 years cognate experience in the financial sector starting from former Intercontinental Bank, where she rose to the position of Group Treasurer. In the private sector, Olutoyin serves on several boards including Casafoundation, a Canadian based Non-Governmental Organisation, where she is the President and Convener of Friends of Africa, an annual economic and entrepreneurship development Summit. She holds a Doctorate degree in Management from the University of Maryland, University College; and graduated from Wharton’s advanced management program and IMD Lausanne’s business marketing. She is married to Olusola Oyelade and they are blessed with three wonderful Children.

46 | | SUMMER 2017

Pre-Order your Copy Today from: Amazon, Barnes & Noble, Google, AuthorHouse Call Today at 1.888.728.8467 ext 5658




CasaFoundation with Recipients

The MC at the Awards Night

Board of Casafoundation presents awards with President of Centenial College- Anne Buller

48 | | SUMMER 2017

Minister of Presidency of Republic of Ghana, welcoming Premier of Ontario Representative, MPP Han Dong

L -R: Dr MaryAnne Chambers, Minister of Universities, Training, and Colleges (2007) with CasaFoundation Board

Other guests at the inaugural Healthcare intervention- Equipment Donation to Teaching Hospitals. At the Awards

49 59

FALL 2015 | | SUMMER 2017 | |




At Entrepreneur EXchange Forum 1

At Entrepreneur EXchange Forum 4

At Entrepreneur EXchange Forum 4

At Entrepreneur EXchange Forum 2

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African DIASPORAN Business Meetings with Hon. Elvis Afriyie Ankrah, Minister of the Presidency, Republic of

Minister of Presidency of Republic of Ghana, welcoming Premier of Ontario Representative, MPP Han Dong

At Entrepreneur EXchange Forum 3

Other guests at the inaugural Healthcare intervention- Equipment Donation to Teaching Hospitals. At Entrepreneur EXchange Forum 2 SUMMER 2017 | |


Friends of Africa (FOA) An Economic Development Summit The Friends of Africa (FOA) offers a platform to facilitate collaboration and investment partnerships between infrastructure providers and investors in North America and Africa. The FOA Economic Development Summit hosts participants from the public and private sectors. Through Roundtable discussions, breakfast and informal meetings, the relevant authorities in these sectors are brought together to discuss and proffer solutions to challenges in the real sector of these economies, while providing a robust platform for business ideas and opportunities. The Breakfast and Roundtable Sessions focus on: -Economic and Infrastructure Development discussions -Promoting strong networks and creating partnership opportunities for Entrepreneurs -Facilitating Business mentoring. The Infrastructure and Business Leadership Sessions: Improve knowledge sharing, networking, learning exchanges between business leaders across various verticals. These sessions also provide an opportunity to explore available funding options for business expansion and the growth of the private sector. It offers presentation of development ideas at the One on One sessions with Investors and global decision makers. Business Development Initiatives include: -Steps to Starting new businesses for young entrepreneurs -Discussions with business leaders in the private/public sectors across various professions -Networking event for Emerging leaders: discussing small business development systems -Connects to available funding options to support SME business development initiatives. For additional Information on Speaking, Sponsoring, and Partnership opportunities at Friends of Africa Conferences visit or send an email to SUMMER 2017 | |


Afroinvestors Summer Edition 2017  
Afroinvestors Summer Edition 2017