Monthly Archives: August 2014

Ghana’s Currency, Millennium Challenge and Economic Prospects

The Millennium Challenge Corp. recently signed a second compact with the Republic of Ghana.http://www.state.gov/secretary/remarks/2014/08/230295.htm  This compact’s focus on the power sector addresses a major challenge to Ghana’s economic growth and to Ghanaians’ overall quality of life. The signing of the MCC compact is a good time to reflect on current economic and business conditions in Ghana.
Ghana is potentially a strong economic engine for the region and Secretary of State Kerry is right to cite Ghana’s commitment to good governance and economic prosperity. However the country faces some major challenges. Among them is the rapid depreciation of Ghana’s currency. Our data shows that the cedi lost about 27% in the 1st half of the year and has continued to fall since then. Currency weakness in Ghana is a symptom of persistent trade deficits as well as rising government spending. The financial community has noticed and has raised the issue in several forums and publications. It doesn’t change the longer term story of Ghana’s growth potential (in fact dollar based investors might find favorable prices for Ghanaian assets) but it does raise questions about how government will handle the problem while remaining investor friendly.
Red flags went up earlier this year when the government began to restrict the movement of currency, damaging Ghana’s reputation for financial openness. The more sensible answer is to change the character of Ghanaian trade. Surpluses might be a lot to ask but Ghana should at least aim for smaller trade deficits. Ramping up the nascent oil sector would help but there should also be greater orientation toward exporting in several sectors. This is why reliable electric power is so crucial. It’s location, general business friendliness and political stability make Ghana a logical export platform for the West Africa region as well as destinations further abroad. However for indigenous and foreign investors to locate in Ghana reliable electric power is essential. For that reason we should all hope for the success of this second MCC compact.

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What Tech Hubs Are Getting Wrong in Africa (and How to Fix It)

Tech hubs and accelerators are a good way for investors to build relationships in the target market and to get acquainted with the local entrepreneurial community. This can mitigate some of the risk inherent to angel/venture investing. Social investors should consider becoming the kind of corporate partner the author suggests are necessary for accelerators to become sustainable.

In a post about Africa’s growing tech hub community, researcher Dan Evans (whose work we’ve covered previously), writes:

“Based on the maturity and business viability of many of the small tech firms that we have met with over our data collection visits, and the modification of many incubators’ business models, we completely understand the thought-process behind this “pivot” in strategy. For example hubs that we have previously visited like iceaddis and iLab in Liberia, andHiveColab in Uganda have all scaled back their original lofty aspirations. These hubs originally planned for a multi-tier membership model, charging rent for office space, and acquiring equity of the companies that were the most mature. Based on these assumptions, they thought they could be self-sustaining in a short period of time. All have scaled back their expectations and operate more as collaboration spaces for the local tech community and offer technical training…

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Call for proposals – your green idea could win up to US$15,000

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Are you a young innovator?
Are you a citizen of Latin America and the Caribbean?
Are you passionate about climate change?

If so, you are eligible to participate in the Greenovators contest, organized by Inter-American Development Bank (IDB) and EARTH University, in collaboration with the Ibero-american General Secretariat and Costa Rica’s Ministry of Environment and Energy.

The proposed project must provide specific indicators to monitor the impact of the project because the work that are awarded seed funds must commit to a monitoring report for evaluation by the end use of funds to deliver. Your project should be in one of the following areas:

  • Education and Awareness
  • Energy Efficiency
  • Renewable Energy
  • Sustainable Transport
  • Sustainable Business
  • Resilient Agriculture
  • Water resources
You could win
  • 5 prizes of US$ 15,000
  • 10 prizes of US$ 10,000
  • 15 prizes of US$ 5,000

Contest participants can also win a trip to Costa Rica and participate in the…

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