Africans-Stop-Being-Poor
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1563-4108

AFRICABIZ ONLINE SYNOPSIS RSS FEED
Trading And Investing In & Out Africa

ISSUE 45 - VOL 1
JANUARY 15 - FEBRUARY 14, 2003

Dr. Bienvenu-Magloire Quenum
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Dear faithful reader,

BEFORE TRADE COMES PRODUCTION OF GOODS AND SERVICES AT COMPETITIVE PRICES Click here for the beginning of this article

Holding meeting and international conferences to debate about the developing of Africa is a necessity. The signature of treaties and other assistance agreement provide legal frameworks for international cooperation between the North and the South. However, as long as treaties lack supporting financing schemes - to carry out the entirety of integrated developing schemes in the South - said treaties would never fulfil the goal for which they have been signed that is bridging the developing gap in Africa. The setup of projects that help building up wealth in sub-Saharan African countries (SSA) is the precondition to integrating the South into the mainstream of the international trading.

Of course, only would be supported in a global manner strategic developing schemes that have the inherent capability to trigger the economic take off.

Below listed are some suggestions about how to structure a global financing support to developing schemes in African countries:

1- To set up in each African country National Implementation Business Centers. (NIBS)
2- To establish in each African country Credit and leasing institutions.
3- To set up an International Bank Guarantee Structure for Africa. (IBGA)

NATIONAL IMPLEMENTATION BUSINESS CENTER FOR EACH AFRICAN COUNTRY

That will be in charge of:

1- The economic and financial appraisal of projects.

2- Structuring and counceling local and regional investors groups.

3-
Convincing local and regional Banks to take stakes in projects included in Developing Schemes.

4-
Scouting for international partners (Investors, Technical and Marketing).

5-Introducing Bank Guarantee's request to the International Bank Guarantee for Africa.

National Implementation Business Centers could be just coordinating offices that would make good use of the staff of local consulting firms.

One can read, here and there, that Nepad's promoters evaluated the financing need for the Project to be about US$ 64 billion.

In our opinion, instead of a direct search for US$ 64 (sixty four) billions African leaders may get the positive attention of G-7 heads of states if they lobby for the set up of an International Bank Guarantee For Africa. (IBGA)

For instance, they may negotiate for one third of US$ 64 billion. Endowed with a Capital of such magnitude (twenty billions US$) the International Bank Guarantee for Africa could raise twenty times more that is US$ 400 billion (during the first two years) on the international financial market; to financing developing project in SSA countries. That would be more efficient than searching direct for US$ 64 billion to support Nepad.

The problem nowadays is that only a maximum of five African countries are creditworthy. The others have problems raising money on the financial market or even to import goods and pay for services because their credit rating is bad on the international financial marketplace.

When the International Bank Guarantee for Africa eventually becomes active and starts financing projects throughout the continent, Africa's credit worthiness would sharply improve. African countries would then start buying all sorts of equipment and services. A market of more than US$ 200 to 300 billion a year would emerge in Africa.

No doubt, the Setup of the International Bank Guarantee Structure to secure loans to finance developing schemes in African countries would be a Win-Win Bargain for the North and the South.

With such Capital amount in the range of US$ 21 billion, the
International Bank Guarantee Structure could easily raise twenty times more money i.e. US$ 400 billion (during the first two operational years) on the international financial market; and then support project's implementation in African countries. That will be more efficient than searching directly for US$ 64 billion to support Nepad.

MAURITIUS SHOWS THE WAY

"Over the past twenty years, our economy has undergone profound structural changes. From a mono-crop sugar producing country, we have grown into a vibrant economy anchored on four pillar, namely agriculture, manufacturing, tourism and financial services..." Declared Mauritius' Prime Minister, Sir Anerood Jugnauth during his opening speech to the Private Sector Forum at the second AGOA meeting on January 13, 2003.

Mauritius' economic success path is shortly laid down in Sir Anerood Jugnauth' speech. Please do read it. It is a quick lesson on successful economic development strategy.

Mauritius' rise from underdeveloped countries' circle to the developed world stage, in 20 years, is the confirmation that the double digit economic growth rate's case study described here and resulting GDP here available are not utopia.

THE SET UP OF THE INTERNATIONAL BANK GUARANTEE STRUCTURE IS A WIN-WIN BARGAIN FOR THE NORTH AND THE SOUTH

The problem nowadays is that only few African countries and their entrepreneurs are creditworthy. They have problems raising money on the financial market or even purchasing goods because their credit rating is a bad one.

When the International Bank Guarantee Structure eventually becomes active and starts financing projects throughout the continent, African countries businessmen's credit worthiness would sharply improve. They will become buyers of all kinds of equipment and services. A market of more than US$ 200 to 300 billion per year will be created all over the continent.

So you see, setting up the International Bank Guarantee Structure will be a Win-Win strategy for the North.

COMPETITIVE PRODUCTION COST MAKES A WEALTHY TRADER

However, the manufacturing of high-value-added products would bring prosperity to an African country only if plantations, industrial plants and services ruled according to efficient management practices.

Because, for would be international buyers of agricultural products, commodities or any industrial product, only matter:

1. The quality of offered product or service.

2. The availability of the product or service.

3. The selling price and delivery on time according to Sell-Purchase contract terms.

Manufacturing will bring prosperity to a country only if performed with good efficient management practices to producing value added products. That can be achieved only if the legal framework established by political authorities is attractive enough to local and international entrepreneurs / investors.

Because, for would be international purchasers of agricultural products, commodities or any industrial product, only matter quality, product availability, delivery on time at agreed purchasing and competitive prices.


"CONTRIBUTOR'S GUIDELINES" are available here. You are invited to contribute to AFRICABIZ ONLINE MONTHLY ISSUE - with articles related to "How Africa Could Bridge The Developing Gap".

Many thanks for subscribing to Africabiz. See you on February 15, 2003.

Dr. B.M. Quenum
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Business Opportunities

TROPICAL FRUIT INDUSTRY AS INCOME BUILDING POWER FOR AN AFRICAN COMMUNITY / PART XI: PRODUCTION COST OF BROMELAIN / A FOOD ENZYME

Pineapple cultivated in African countries is exported as fresh or canned fruit, or locally processed into juice concentrates and syrup for the local and export market. Pineapple bran, the cake / residue obtained after extracting the juice, has a high content of vitamin A: it is an excellent feed for livestock. From the juice citric acid could be extracted, or processed into alcohol, after fermentation.

More on bromelain production cost


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