Growing Markets in Lagos
Nigeria is often associated with a stagnant economy riddled with corruption; however, Lagos, the country’s largest city, hosts business opportunities that are continually growing, making it one of Africa’s largest rising economies. Lagos is currently Africa’s seventh largest economy, and its rapid rise in GDP and population have the city projected to become the continent’s second largest market by 2035. The growing markets in Lagos have boosted Nigeria’s economy and have set an example in a continent full of market opportunities.

Economy and Population in Lagos

The GDP and population growth of Lagos, Nigeria are the most indicative factors of the rapidly growing market opportunities in the city. Economic growth first began in Lagos after the government moved the capital to Abuja in 1991, and then continued on after the government invested money in the growing oil industry in the area.

In addition to the oil industry, Lagos has also economically benefitted from Nigerian policy reforms that improve privatization of businesses. Many newly privatized companies are centralized in the Yaba district of Lagos, which has been financially supported by the state government, and infrastructure projects are constantly underway to reflect the rapid growth of the city.

This economic growth has led to a state output of $136 billion in 2017, comprising more than a third of Nigeria’s GDP. The strong economy of Lagos is projected to continue growing with a 4.5 percent GDP growth per year in 2035, a figure that rests significantly above the current global average of 2.9 percent.

Lagos’s growing economy and infrastructure largely work to support a rapidly increasing population. By 2035, the population is expected to reach 28.5 million people ­­– significantly higher than the 2012 census population of just over 8 million people. Governor Akinwunmi Ambode claims that the population is a significant factor of the growing markets in Lagos, adding that the city has “the population and rise of an emerging class” and is “a new market, a new frontier to consider.”

New Businesses in Lagos

New business opportunities have shown off the increasingly prosperous markets in Lagos, and many successful Nigerian startups now have their offices in the city. Finance/technology, consulting, retail companies and startups like PayLater and Yellow Brick Road have historically dominated the economic environment of Lagos, and continue to host numerous companies that have caught investors’ attention.

Investment opportunities in Lagos are also important to the city’s markets and are some of the largest in all of Africa. According to the World Bank, an estimated $93 billion in investments in Africa is required annually, and Lagos requires at least a quarter of these investments.

Continued Expansion

Market opportunities in Africa continue to expand with economic growth, and these opportunities are only emphasized in Lagos, Nigeria. The city has become a thriving music, fashion and film hub throughout Africa, and growing markets in Lagos develop along with GDP and population.

Africa has immense economic potential, and Lagos is only one of several cities on the continent that showcases these realized business opportunities. With continued attention and proper investment, both the city and the nation should see a bright fiscal future.

Matthew Cline
Photo: Flickr

Saudi Vision 2030 Saudi Arabian Reform Opens Markets
With the recent rise to prominence of the Crown Prince Mohammad bin Salman, the Kingdom of Saudi Arabia has committed to a vast economic and social reform plan. The Kingdom’s strategy is in its initial stages, but early signs indicate how the promise of socioeconomic Saudi Arabian reform opens markets for American business.

Saudi Vision 2030

The ambitiously conceived Saudi Vision 2030 is a reform plan for diversifying the Kingdom away from its traditional dependence on oil revenues. The plan’s goals are varied, with objectives ranging from enhancing the competitiveness of non-oil sectors, such as leisure and tourism, to increasing women’s participation in the workforce from 22 to 30 percent.

Although it is in its early stages, the plan has made some progress toward its social liberalization goals, providing an ongoing illustration of how Saudi Arabian reform opens markets. After the Saudi Ministry of Culture ended a 35-year ban on movie theaters late in 2017, the Chinese-owned, American-operated AMC Theaters obtained a license to open 30 movie theaters over the next 5 years as part of a joint operation with the Saudi government.

Film and Tourism

This expansion isn’t limited to AMC: one Saudi official estimates the cinema market to reach $21.3 billion over the next 10 years, and companies such as the U.K.-based Vue International and Imax of Canada plan to open 30 and 20 theaters in the Kingdom in the coming years, respectively.

Beyond theatrical entertainment, the emphasis on promoting tourism in the reform plan is opening up investment opportunities for international hospitality companies and employment opportunities for local women. Marriott International’s managing director for the Middle East and Africa has said that the demand for new hotels in the country has been steady, with the company scheduled to more than double its hotels in Saudi Arabia from 23 to 52 by 2022.

Steps Towards Gender Equality

And an increasingly greater shares of the jobs created in this industry are being filled by women. Saudi women appear to be more amenable to working in the hospitality sector than their male counterparts, the latter tending to seek roles in traditional public or energy sector jobs. In fact, a 2017 working paper by the Saudi Arabian Monetary Research cites researchers’ belief that women will an essential role in the tourism sector.

The social progress made by Saudi Vision 2030 is incremental and should not be overstated. The merits of the highly publicized repeal of a ban on women being granted a driver’s license are countervailed by the country’s continued human rights violations, such as this month’s arrest for dissent of women activists who had fought in previous years to overturn that very ban.

A Decade For Progress

However, as the name of the reform plan suggests, the timeline for Saudi Vision 2030 completion is over a decade.

A final judgment of its success will take time, but incremental progress to date shows how, if implemented, social and economic Saudi Arabian reform opens markets and could enhance opportunity for international businesses. The plan could also liberate opportunities for both male and female residents of the Kingdom in the coming years.

 – Mark Fitzpatrick
Photo: Flickr

31 bitsCurrently, 80 percent of the world population lives on less than $10 a day. Needless to say, this is a time where the global poverty rate, although at the lowest it has ever been, is still in desperate need of improvement. The estimated unemployment rate as of 2017 was 7.9 percent, a 0.4 percent increase from 2016.

Fortunately, there are organizations and companies such as 31 Bits that are striving to combat the current unemployment dilemma that is actively contributing to global poverty. Starting its journey selling jewelry at local school events and craft fairs, nearly a decade later, 31 Bits is a thriving company composed of strong women whose success has been driven by their desire to help struggling and poor artisans in providing them with dignified job opportunities all throughout the world.

How 31 Bits Came to Be

The young women who started 31 Bits were college students by day while learning about marketing and international development at night. They had no background in business whatsoever; however, they did not allow this obstacle to hinder them. After returning from a life-changing trip to Uganda in college, International Director and Founder Kallie Dovel met many women, most who were single moms without jobs or an education that were the same age as herself.

Although they lacked an education, Kallie was instantly drawn to their exceptional skills and resourcefulness; they were making jewelry out of old posters. Bringing a box of jewelry back home, she was able to sell all that she had to her friends with ease.

Kallie was hit with the realization that with the skills that these women possessed, they needed a market – this is how 31 Bits has come to flourish. Producing products that are thoughtfully designed and ethically made, the mission statement of 31 Bits is, “We use fashion and design to drive positive change in the world by providing artisans with dignified opportunities and inspiring customers to live meaningful lives.”

How 31 Bits is Carrying Out its Mission

Actively defying cruel sweatshops where the worker is not paid fairly and is treated poorly, 31 Bits puts the treatment of its artisans at the forefront. The workshops contain quality materials and the necessary protective supplies, and the organization’s goal is to ensure that each artisan is able to make a sustainable monthly salary so that they are able to provide for their families.

31 Bits sells jewelry, bags, home décor, ceramics, textiles and more. Its brass jewelry is crafted by hand in Bali and its beads are also handmade in Uganda. Its website explains the religious reasoning behind the name 31 Bits, saying, “We called the company 31 Bits because Proverbs 31 describes a diligent woman providing and caring for her family using her gifts and talents. Oh, and the ‘bits’ comes from our original and bestselling jewelry that uses beads made out of ‘bits’ of paper!”

Combating Poverty and Assisting Artists

Because 31 Bits recognizes that there are many countries that suffer from corruption and a poor infrastructure which, as a result, limits many from access to the global market, it works to actively decrease the poverty rate for these countries while sustaining a family atmosphere and preserving tradition. “We’ve been able to take age-old practices and give them a modern twist,” the company explains. “Through 31 Bits, [artisans] now have a place to sell their meaningful work and tell stories of their heritage.”

Artisans who work with 31 Bits also receive health care and treatment, counseling, financial education and more. 31 Bits is not only combating the vast amount of global poverty that millions are attempting to grapple with, it is also promoting and encouraging these artisans to pursue their dreams.

– Angelina Gillispie
Photo: Flickr

aid creates markets
As public sector debt in developed countries continues to rise, foreign aid has become a target for activists and policymakers seeking to cut spending. The aid budget of the United Kingdom is no exception, with critics claiming that spending on foreigners is wasteful and contrary to national interest.

The country’s Department for International Development (DFID), responsible for administering overseas aid, has rejected calls for cuts in spending by emphasizing that aid creates markets that will ultimately consume British goods and provide higher returns for British investment.

National Debate Over Aid Spending

As one of six countries to reach the United Nations target for international aid spending of 0.7 percent of gross national income, the U.K. is a major contributor to worldwide aid spending. The leadership role the country plays in international aid was bolstered by the passing of a 2015 bill that enshrined the spending target into law, committing the country to sustaining current levels of spending as a share of the economy’s size.

However, in a political environment where nationalist sentiment is rising, exemplified by the 2016 Brexit referendum, prominent U.K. politicians have called for a reduction in foreign aid spending. Jacob Rees-Mogg, a Member of Parliament of the Conservative Party and potential future party leader, has said that with the government budget running a deficit, aid levels are an insane and a costly mistake.

Facing this criticism, Penny Mordaunt, the recently appointed head of DFID, has pushed back, contending that the aid is a moral obligation that also serves British interests. In an April 12 speech laying out her vision for U.K. aid, Mordaunt said that improving global health, security and income is linked to British prosperity and that promoting these goals abroad provides lasting benefits for the U.K.

Notably, Mordaunt emphasized that aid creates markets through the development of economies and human capital, citing DFID’s work in sub-Saharan Africa as having created jobs and growth, benefiting recipient countries but also benefiting British companies by creating new consumers.

Private Sector Partnerships a Key Way That Aid Creates Markets

Mordaunt’s speech also explained how aid creates markets in conjunction with the private sector. Aid will be directed to help African companies to acquire loans through British financial markets, encouraging British investors to direct more capital to the region and spurring economic development. By proposing an aid plan in which British investors could achieve higher returns, DFID is hoping to illustrate another channel through which an aid budget is mutually beneficial to both the donor and recipient countries.

Critics have cautioned of the dangers of conflating national and foreign interests in aid work. In response to Mordaunt’s speech, Tamsyn Barton, chief executive of an international development network representing NGOs called Bond, told Devex that aid programs focused on serving national interests are inherently less effective than those focused on the primary goal of improving conditions in affected countries.

Mordaunt does clarify that aid will not be conditional, stating in her speech that tied aid is bad for U.K. competitiveness and for the recipient nations, but observers such as Barton have warned that this distinction should be made explicit.

Even a country such as the United Kingdom, which has enshrined its commitment to foreign aid in law, faces pressure from domestic critics to redirect this funding home. In highlighting how aid creates markets that benefit the home country, Mordaunt and the DFID are seeking to show that the decision between spending at home and spending abroad is a false dilemma.

– Mark Fitzpatrick

Photo: Flickr

Poverty in MoldovaIf ever there were a time capsule left in the world, it would be Moldova. Pictures of Moldovans in traditional clothes, locals driving horse-drawn carriages and a country dedicated to agriculture and the production of wine are among the first photos that come up in an image search. Though online photographs of Moldova are charming, poverty in Moldova has been a definitive characteristic of the nation since its independence from the Soviet Union in 1991. What was once a wealthy state became the poorest country in Europe after Soviet liberation.

The Statistics
According to The World Bank, Moldova has experienced economic growth and a significant poverty reduction since the start of the millennium.

Poverty in Moldova has dropped from 30 percent in 2006 to 9.6 percent in 2015. The percentage of those living on less than $1.90 a day has dropped from 39.1 percent in 1999 to zero. At its peak, the poverty rate for those living on $5 a day was at 90.4 percent in the year 2000. It has since dropped to 16.3 percent.

Remittance and pensions are responsible for lifting 51.6 percent of families out of poverty, and pensions are sustaining the aging population.

These two factors are acknowledged as the main drivers of economic growth. In fact, the Republic of Moldova is one of the few European countries that recognizes remittances as a main influencer of the economy, accounting for 26 percent of gross domestic product in 2014.

Challenges Halting Further Progress
Unfortunately, exporting labor leads to the issue of weak labor markets. Labor and demand are some of the challenges that plague Moldova and inhibit its economic progress, keeping poverty a constant.

Dependence on remittance weakens the industrial market and keeps the Moldovan economy in a cycle that increases the trade deficit and proves remittance to be untenable.

Despite an increase in those attaining higher education, younger generations are having a difficult time finding specialized occupations that are not farm-based. Post-secondary education is not a guarantee of a better job, as the business industry is not creating long-lasting positions and many firms do not typically subsist themselves.

Moving Forward
Improving the industrial state of affairs in the nation will continue to decrease poverty in Moldova.

Alex Kremer, the Country Manager for Moldova, told the World Bank that “urbanization, connectivity and off-farm jobs are the best escape routes from poverty”.

The United Nations Development Programme has innovative business development in place for local sustainable economic growth. This project is designed to facilitative innovative business development for new and existing businesses to generate internal economic development and growth in the job market.

So far, the program has already granted 83 private sector companies innovation awards and produced a campaign focused on the employability of Moldovan youth.

The initiative is scheduled to end in 2017, but with movements like this, the future of poverty in Moldova will surely improve.

Sloan Bousselaire

Photo: Flickr

Democracy and Economic Performance
A nation’s political structure is one of the biggest predictors of its success in a number of areas, including governance, security, peace and economics. According to recent analysis by the Brookings Institute, democracy might be the best government form to optimize economic performance of emerging powers.

The relationship between democracy and economic performance can be determined after considering democratic ideals. These include civil liberties, free elections, minority protection and government accountability to the public, among others.

A move towards democratization signals more freedom for people, markets and trading policies. Unlike non-democratic governments, more liberal governance relies on institutions and policies to lay the framework for society. These policies are often beneficial for the private industry and therefore stimulate growth. Further, democracy in conjunction with free market allows for healthy competition between markets and people, compounding growth.

Five emerging economies in particular — India, Brazil, South Africa, Turkey and Indonesia — have made strides in creating a more liberal political climate and practicing democratic ideals. As a result of this transition towards greater transparency, each has seen economic growth and a consistently narrowing gap between inequality among their populations.

From an international perspective, liberalization leads to more open trade and immigration laws across transnational borders. One example of this phenomenon is South Africa, where democratization has reduced the time required to import and export goods. Movement toward free trade facilitates faster transaction execution for neighboring countries and helps make South Africa a more attractive trading partner.

One benefit of this growth is governments having more funds to increase welfare and entitlement spending. This investment in human capital through increased spending on education and healthcare is made evident in increased literacy and decreased mortality rates across the board. In India, for example, literacy rates have increased by 54 percent since 1991.

Other democratic ideals such as intellectual property rights increase the incentive to innovate because it is less likely for novel products to be infringed upon, making it a safer investment by reducing this risk. As a result, countries as a whole make greater strides in technological advancement which leads to stronger economic performance in the long run.

Overall, the links are striking between democracy and economic performance, as power moves away from government authorities and into the hands of the general public. However, there is no exact equation for economic growth. As Winston Churchill famously said, “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” This viewpoint is also relevant in terms of the relationship between democracy and economic performance. While there is no direct causation, liberal regimes have shown great success in economic development.

Sarah Coiro

Photo: Flickr

Global Agricultural Market
In July 2017, the United Nations and the Organization for Economic Cooperation and Development (OECD) published the 2017-2026 OECD-FAO Agricultural Outlook. The report predicted many positive developments in the global agricultural market for the next decade. Most important among these were lower food prices, increased productivity and reduced malnutrition.

According to the report, recent government initiatives and market changes are likely to create higher availability of nutritious food; stable food prices; high production rates of maize, meat and dairy; and lower demand for food. This high level of production can be achieved through significantly higher crop yields, using only slightly more land. As demand in developed countries lowers and crop yields increase, developing countries will be able to attain higher-calorie, nutritious diets.

While these predictions suggest a decade of stability for the global agricultural market, they can only be achieved with constant government upkeep and a continued focus on developing nations and environmental impact. According to the UN Food and Agriculture Organization, about one in nine people globally were suffering from chronic undernourishment from 2014 to 2016. Additionally, many of the production techniques in developing countries are beginning to deplete natural resources. Consequently, creative and sustainable production and trade practices need more attention in order to improve food access and alleviate pressure on natural resources.

Although the Agricultural Outlook report focuses on the global agricultural market, the end of the report looks particularly at sustainability issues in Southeast Asia. The region had a significant amount of economic growth in the past few years, primarily due to the booming agriculture and fish sectors. This growth helped address undernourishment in the area.

However, such immense growth in these sectors put a significant amount of strain on the environment. Because of this, the next decade will require a scaling-back of the fishing and palm-oil exports from the region. According to the report, “improved resource management and increased [research and development] will be needed to achieve sustainable productivity growth.” For example, the report suggests expanding the rice industry to promote diversification.

Essentially, the report states that while the global agricultural market is looking towards a period of stability and low cost, maintaining this requires a watchful eye. OECD Secretary-General Angel Gurría stated, “unexpected events can easily take markets away from these central trends, so it is essential that governments continue joint efforts to provide stability to world food markets.”

Julia Morrison

Photo: Flickr

Impact of Market Prices
There are various global markets providing third world countries with necessities such as food and hygiene care products. These markets are the center for resources for areas in poverty. These areas are prone to high inflation rates, and therefore, setting prices and controlling costs are important to the industry.

Market prices have a great impact on poor countries, especially to avoid hunger. Poor households spend about 60-80 percent of their income on food. They will be scraping everything they have just to be fed. With an increase in food prices, they will have even less to spend on other necessities, such as clothes, medicine and books.

Over the years, prices within these markets have increased and about 44 million people and counting have fallen into poverty as a result of these higher prices. Prices are influenced by expanding populations, reliance on food crops and shifting food prices. Increasing prices are threatening poor people around the world.

Because of the increase, the impact of market prices has caused poor countries to restrict advancements to people’s households. Food price-related riots have taken place in a few countries, as the demand for affordable food and supply increase.

Along with food and supply, education seems non-essential as well. While market prices increase, more of poor household’s income decreases, leaving less money going into children’s education. Children may have to work as a farmer or merchant to earn a few coins for the family.

With the effects most visible in poor countries, often, businesses will alter their products, influence government negotiations and predict pricing. These alterations will minimize the effects of price control.

The impact of market prices is crucial. It is a factor in determining survival for households in poor countries. Market prices may determine whether a family will be able to afford to eat, or even save farmers with replaceable food when their crops are demolished by drought. The impact of market prices is what drives the economy of many countries. And whether there is an increase or decrease in its prices, there is an immediate reaction in the countries themselves, especially those in poverty.

Brandi Gomez

Photo: Flickr

The Trans-Pacific Trade Partnership, Patents, and the Price of Medicine
The Office of the United States Trade Representative hails the prospective Trans-Pacific Trade Partnership as a way to “[level] the playing field for American workers & American businesses” through a set of trade agreements between 12 different countries. The deal has been drafted, but not yet ratified.

At least six of the participant countries — including the United States and Japan, in order for the group to meet economic output requirements — must agree to the deal by February 2018 for the TPP to become a reality. Other potential participants include Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Peru and Chile.

Negotiations regarding the TPP have been in progress for more than 10 years, and the goal of the TPP is to lower trade barriers and synchronize trade regulations between participant countries. The deal would affect 18,000 tariffs, most notably eliminating all textile and clothing tariffs and lowering tariffs on agricultural and industrial products. However, not all of the changes in tariffs would take place immediately following ratification.

The USTR advertises that the TPP would protect workers’ rights and the environment, set food safety standards, and maintain the openness of the Internet. However, there is much controversy surrounding the agreement, particularly as it relates to the price of medicine in Pacific Rim countries.

Doctors Without Borders, for one, calls the Trans-Pacific Trade Partnership “a bad deal for medicine,” because less-expensive generic drugs would be held off the market for a longer period of time. Drug patents would be extended, and the generic drug approval process would become more difficult for biologic drugs, in particular.

Pharmaceutical companies like Gilead and Bristol-Myers Squibb have voluntarily made agreements with generic drug manufacturers, to allow their currently patent-protected hepatitis C medications to be produced and sold more cheaply in low-income countries.

However, middle-income countries are excluded from these company-led initiatives, even though three-quarters of hepatitis C patients live in middle-income countries like the TPP participant, Malaysia. The extension of drug patents through the TPP could thus prevent patients in countries already excluded from such agreements with pharmaceutical companies, from accessing affordable medications for a longer period of time.

The USTR website maintains that the TPP would lower the cost of medications by eliminating tariffs. However, it does not address patents on pharmaceutical products or the effect that these patents have on the price of medicine in Pacific Rim countries.

The U.S. Congress can only ratify or reject the deal, in its current state, because the deal has been “fast-tracked.” Even so, the Trans-Pacific Trade Partnership has not yet been ratified, so its specifications can be re-negotiated with participant countries. Doctors Without Borders encourages constituents to contact Congress members and the president to request that the deal is not ratified until its patent and intellectual property rules for pharmaceuticals are revised.

Madeline Reding

Photo: Flickr

Africa_Business_BillAirtel Africa has unveiled Tap2Bill, which will allow content providers and merchants to use Airtel’s billing infrastructure to charge and bill their customers.

According to Airtel, Tap2Bill will be available through a secured portal that will help growing businesses across Africa. The service will prevent businesses from investing in costly billing and payment capabilities.

Businesses can register for the billing service online by providing their email, company details and supporting documents. Consumers do not need to register, enter their credit/debit card details or even own a bank account to use the service according to Airtel Africa. All they need is a mobile device with a SIM card.

“We are very pleased to announce this new customer payment innovation to the market. It will support the growth of content services and enable content producers and merchants across Africa to share and benefit from Airtel’s scale, market and technology,” said Christian de Faria, Chief Executive Officer of Airtel Africa.

According to Total Telecom, Airtel Africa is a leading telecommunications service provider and has operations in 17 countries across Africa. Africa is seen as the fastest growing market for mobile commerce in the world and the need for smarter solutions is continuing to grow.

Airtel Africa is partnering with IMImobile in order to make sure the service is available on cell phones. They have worked with Airtel Africa since 2011 and have made IMImobile one of the leading mobile service providers in Africa.

According to IMImobile Chief Executor, Jay Patel, “We are delighted to partner with Airtel Africa to help bring these new, affordable, mobile-centric service offerings to market which not only creates a richer user experience for subscribers but will also encourage and support growth and variety of mobile content across Africa.”

According to It News Africa, Airtel Africa will launch Tap2Bill in the first week of December 2015 making it commercially available.

Jordan Connell

Sources: Airtel Tap2Bill, It News Africa, Total Telecom
Photo: Flickr