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Booming African economies offer huge opportunities for Bangladesh
Published : Friday, 08 February 2013
Two Bangladeshi companies leased 40,000 hectares (99,000 acres) of land in Uganda and Tanzania and another 10,000 hectares in Tanzania in May 2011. --AFP photo
Syed Ejaz Ahsan
The countries of African continent were once known as the domain of semi-civilised people caught in poverty, malnutrition and illiteracy. Natural calamities like flood, draught, crop failure resulting in famine and starvation visited these countries regularly. This is why Africa was once called the Dark Continent.
Leaving those days at the beginning of the 21st Century, some parts of Africa are now gradually marching towards a new era of economic and social prosperity. If we consider the stock of resources, the continent of Africa was always rich, but unfortunately, its people were not the beneficiaries of these resources. European colonialists, in particular, plundered the African resources for centuries. The main attractions were valuable mineral resources. But only resource extraction was not enough for satisfying their unending greed. At one stage, they started trading on human beings in Africa as slaves across the Atlantic to the newly-discovered country and presently superpower the United States of America. The slave trade of Africa is the darkest and the most shameful chapter of the human history. The process made millions of Africans rootless for ever. We think, there is no need for an elaborate discussion of the history because all of us know what had happened to those people.
Africa has been the second fastest-growing region in the world over the last 10 years, with average annual growth of 5.1 per cent, driven by greater political stability and economic reforms that have invigorated the private sector in many countries.
Poverty is also on the retreat. A new consuming class has taken its place: since 2000, thirty-one million African households have joined the world's consuming class. At the point when household incomes exceed $5,000, measured at purchasing power parity, consumers begin to direct more than half of their income to things other than food and shelter. The continent now has around 90 million people, who come under this definition. The figure is projected to reach 128 million by 2020. Indeed, contrary to conventional wisdom, the most of Africa's growth has come from domestic spending and non-commodity sectors, rather than the resources boom.
Scope of Bangladesh involvement: Africa has about 60 per cent of the world's unused croplands, providing it with a golden opportunity to simultaneously develop its agricultural sector and reduce unemployment. African agriculture is now on course to create eight million wage-paying jobs between now and 2020.
With two important reforms, however, Africa could add six million more jobs. Firstly, policymakers could encourage expansion of large-scale commercial farming on uncultivated lands. African countries need to reform land rights and water management, build up their infrastructure and improve access to inputs such as seeds, finance and insurance to develop agriculture. Such steps have allowed Mali, which built integrated road, rail and sea links to transport refrigerated goods and to increase its mango exports to the European Union six-folds in just five years. Secondly, African economies can move from producing low-value grain to higher-value crops such as horticultural crops and bio-fuels. This will not only boost GDP, but also provide much-needed jobs: staples such as grain employ up to 50 people per 1,000 hectares while horticultural products need up to 800 people.
Bangladesh has already stepped into the African agricultural sector. Some of the African countries have started leasing out their cultivable lands to Bangladesh at very attractive and low leasing prices. Countries like Tanzania and Uganda are the pioneers but many such other countries will join the race if the projects become successful and beneficial for both the sides. There is a huge potential waiting for Bangladesh if it can capitalise the opportunities successfully. At the same time, some problems are there in Africa such as communication infrastructure, storage and absence of policy guidelines. If these problems are solved, the African continent could turn out to be a bread- basket of the future world.
Industrial development and manufacturing: The pace of industrial development in Africa is very slow, though there is a huge potential for it. But no significant achievement has taken place yet in this regard. Only industrially-developed country in Africa is South Africa. South Africa has achieved development in auto industry and also improved in chemicals sector as per latest statistics. Some improvements are also there in other manufacturing sectors like textiles, agro-processing and telecommunications. But as economic development is taking place and income level of the people of all other four corners of Africa is increasing, a new avenue for industrial development is taking place gradually. Already China and India have started exploring the opportunities in different African countries. China, in particular, is trying to tap mineral resources like copper, coal, iron, bauxite and oil and resources which are vital for its fast-growing economy. It is expected that gradually, Chinese and Indian companies will step into the manufacturing sector of Africa. In this connection, some of our industries have a bright prospect in African economies. One of such sectors is pharmaceuticals. At present, Bangladesh has achieved a praiseworthy position in pharmaceuticals industry and is exporting medicines to many countries. So, the pharmaceuticals sector in Bangladesh has a promising future in African market. Offering lower price and international standard, the pharmaceuticals companies can create a large market for Bangladesh. In addition, agro-processing, textiles, garments, light engineering, consumer and household items, TV refrigerators, air coolers, ceramics and other items could be produced because of competitive production cost and availability of cheap raw materials in Africa. There is a huge demand and it is ever increasing as the economies are improving in Africa. What we need are the continuous market research and timely action to explore the market. In African countries, there is a lack of policy guidelines and absence of economic cooperation agreement and even in some cases, there is no diplomatic mission of Bangladesh in most of the African countries. Diplomatic and trade missions can play a very important role at the initial stage. Afterwards, things will be guided according to agreements between Bangladesh and African countries and under a legal framework.
In addition to the government efforts, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and other chambers need to play active roles in this regard. At the same time, market research and regular exchange of visits by both African and Bangladeshi entrepreneurs are also important.
Retail chain and shopping complex: As we know that the number of consumers in Africa is increasing very fast, there is shortage of retail outlets. The number of shopping malls is very limited. A latest newspaper report shows that Nigeria's four largest cities still have only six shopping malls. If we compare it to our scenario, we can easily understand its huge need and moreover, Nigeria is an oil-rich country and the level of people's income and consumption is increasing. This is not the only the case for Nigeria. The situation is the same for other African countries.
Africa's rising number of consumers is already driving growth in retailing, but the sector could grow much faster. The potential of retail still goes largely unrealised: in Ethiopia, Egypt, Ghana and Nigeria, nearly three-quarters of groceries are bought in tiny informal outlets. If barriers to foreign players are removed and action is taken to boost the share of modern retail outlets, this industry could be booming. Recently, the Indian government decided to lift its ban on foreign direct investment in retailing. If the Bangladesh government and the FBCCI could negotiate successfully, retail chains could have a bright prospect in African continent to step in the retail trade. There is also a bright prospect for establishing our market and product branding of many consumer and household products in much easier way. It is high time to be active in this regard before the opportunity goes out of our hand.
Construction and infrastructure development: Most of the countries of the African continent are backward in infrastructure and road communication and other construction sectors. But with economic development, there is now a growing demand for building roads, highways, high-rise buildings and other construction works. Bangladesh has already gained reputation and experience in working in many Middle Eastern and Far Eastern countries in this respect. So Bangladesh can become a development partner of African countries in construction sector. In this sector, Bangladesh is enriched with a sufficient stock of engineers, architects, skilled labourers and technicians, which could be very useful for African ever-growing construction industry.
Colonial powers have exploited African nations for centuries but they were never interested in developing their economies or improving their social conditions. Now Africans are more conscious about their welfare and development. African countries are in need of development partners in development activities, not masters. Bangladesh's peace-keeping missions in Africa have already earned appreciation from the international community as well as from respective African countries.
Moreover, economic resources of Bangladesh and Africa are complementary, not competitive in nature. So, there is a bright prospect for cooperation.
If initiatives from both public and private sectors are taken in this respect, then Bangladesh could emerge as the most active and valuable development partner of African continent.
The writer is a PhD researcher at the Marketing Department
of Dhaka University.
seahsan@gmail.com
Financial Express :: Financial Newspaper of Bangladesh
Bangladeshi nationalists please feel free to comment on this.
@madx
@Moander
@ShadowFaux @DURJOY @Banglar Bagh
@RiasatKhan
@saleen_s7
@yasinbin @iajdani @CaPtAiN_pLaNeT @eastwatch @asad71 @animelive
@sepoi
@PlanetSoldier
Published : Friday, 08 February 2013
Two Bangladeshi companies leased 40,000 hectares (99,000 acres) of land in Uganda and Tanzania and another 10,000 hectares in Tanzania in May 2011. --AFP photo
Syed Ejaz Ahsan
The countries of African continent were once known as the domain of semi-civilised people caught in poverty, malnutrition and illiteracy. Natural calamities like flood, draught, crop failure resulting in famine and starvation visited these countries regularly. This is why Africa was once called the Dark Continent.
Leaving those days at the beginning of the 21st Century, some parts of Africa are now gradually marching towards a new era of economic and social prosperity. If we consider the stock of resources, the continent of Africa was always rich, but unfortunately, its people were not the beneficiaries of these resources. European colonialists, in particular, plundered the African resources for centuries. The main attractions were valuable mineral resources. But only resource extraction was not enough for satisfying their unending greed. At one stage, they started trading on human beings in Africa as slaves across the Atlantic to the newly-discovered country and presently superpower the United States of America. The slave trade of Africa is the darkest and the most shameful chapter of the human history. The process made millions of Africans rootless for ever. We think, there is no need for an elaborate discussion of the history because all of us know what had happened to those people.
Africa has been the second fastest-growing region in the world over the last 10 years, with average annual growth of 5.1 per cent, driven by greater political stability and economic reforms that have invigorated the private sector in many countries.
Poverty is also on the retreat. A new consuming class has taken its place: since 2000, thirty-one million African households have joined the world's consuming class. At the point when household incomes exceed $5,000, measured at purchasing power parity, consumers begin to direct more than half of their income to things other than food and shelter. The continent now has around 90 million people, who come under this definition. The figure is projected to reach 128 million by 2020. Indeed, contrary to conventional wisdom, the most of Africa's growth has come from domestic spending and non-commodity sectors, rather than the resources boom.
Scope of Bangladesh involvement: Africa has about 60 per cent of the world's unused croplands, providing it with a golden opportunity to simultaneously develop its agricultural sector and reduce unemployment. African agriculture is now on course to create eight million wage-paying jobs between now and 2020.
With two important reforms, however, Africa could add six million more jobs. Firstly, policymakers could encourage expansion of large-scale commercial farming on uncultivated lands. African countries need to reform land rights and water management, build up their infrastructure and improve access to inputs such as seeds, finance and insurance to develop agriculture. Such steps have allowed Mali, which built integrated road, rail and sea links to transport refrigerated goods and to increase its mango exports to the European Union six-folds in just five years. Secondly, African economies can move from producing low-value grain to higher-value crops such as horticultural crops and bio-fuels. This will not only boost GDP, but also provide much-needed jobs: staples such as grain employ up to 50 people per 1,000 hectares while horticultural products need up to 800 people.
Bangladesh has already stepped into the African agricultural sector. Some of the African countries have started leasing out their cultivable lands to Bangladesh at very attractive and low leasing prices. Countries like Tanzania and Uganda are the pioneers but many such other countries will join the race if the projects become successful and beneficial for both the sides. There is a huge potential waiting for Bangladesh if it can capitalise the opportunities successfully. At the same time, some problems are there in Africa such as communication infrastructure, storage and absence of policy guidelines. If these problems are solved, the African continent could turn out to be a bread- basket of the future world.
Industrial development and manufacturing: The pace of industrial development in Africa is very slow, though there is a huge potential for it. But no significant achievement has taken place yet in this regard. Only industrially-developed country in Africa is South Africa. South Africa has achieved development in auto industry and also improved in chemicals sector as per latest statistics. Some improvements are also there in other manufacturing sectors like textiles, agro-processing and telecommunications. But as economic development is taking place and income level of the people of all other four corners of Africa is increasing, a new avenue for industrial development is taking place gradually. Already China and India have started exploring the opportunities in different African countries. China, in particular, is trying to tap mineral resources like copper, coal, iron, bauxite and oil and resources which are vital for its fast-growing economy. It is expected that gradually, Chinese and Indian companies will step into the manufacturing sector of Africa. In this connection, some of our industries have a bright prospect in African economies. One of such sectors is pharmaceuticals. At present, Bangladesh has achieved a praiseworthy position in pharmaceuticals industry and is exporting medicines to many countries. So, the pharmaceuticals sector in Bangladesh has a promising future in African market. Offering lower price and international standard, the pharmaceuticals companies can create a large market for Bangladesh. In addition, agro-processing, textiles, garments, light engineering, consumer and household items, TV refrigerators, air coolers, ceramics and other items could be produced because of competitive production cost and availability of cheap raw materials in Africa. There is a huge demand and it is ever increasing as the economies are improving in Africa. What we need are the continuous market research and timely action to explore the market. In African countries, there is a lack of policy guidelines and absence of economic cooperation agreement and even in some cases, there is no diplomatic mission of Bangladesh in most of the African countries. Diplomatic and trade missions can play a very important role at the initial stage. Afterwards, things will be guided according to agreements between Bangladesh and African countries and under a legal framework.
In addition to the government efforts, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and other chambers need to play active roles in this regard. At the same time, market research and regular exchange of visits by both African and Bangladeshi entrepreneurs are also important.
Retail chain and shopping complex: As we know that the number of consumers in Africa is increasing very fast, there is shortage of retail outlets. The number of shopping malls is very limited. A latest newspaper report shows that Nigeria's four largest cities still have only six shopping malls. If we compare it to our scenario, we can easily understand its huge need and moreover, Nigeria is an oil-rich country and the level of people's income and consumption is increasing. This is not the only the case for Nigeria. The situation is the same for other African countries.
Africa's rising number of consumers is already driving growth in retailing, but the sector could grow much faster. The potential of retail still goes largely unrealised: in Ethiopia, Egypt, Ghana and Nigeria, nearly three-quarters of groceries are bought in tiny informal outlets. If barriers to foreign players are removed and action is taken to boost the share of modern retail outlets, this industry could be booming. Recently, the Indian government decided to lift its ban on foreign direct investment in retailing. If the Bangladesh government and the FBCCI could negotiate successfully, retail chains could have a bright prospect in African continent to step in the retail trade. There is also a bright prospect for establishing our market and product branding of many consumer and household products in much easier way. It is high time to be active in this regard before the opportunity goes out of our hand.
Construction and infrastructure development: Most of the countries of the African continent are backward in infrastructure and road communication and other construction sectors. But with economic development, there is now a growing demand for building roads, highways, high-rise buildings and other construction works. Bangladesh has already gained reputation and experience in working in many Middle Eastern and Far Eastern countries in this respect. So Bangladesh can become a development partner of African countries in construction sector. In this sector, Bangladesh is enriched with a sufficient stock of engineers, architects, skilled labourers and technicians, which could be very useful for African ever-growing construction industry.
Colonial powers have exploited African nations for centuries but they were never interested in developing their economies or improving their social conditions. Now Africans are more conscious about their welfare and development. African countries are in need of development partners in development activities, not masters. Bangladesh's peace-keeping missions in Africa have already earned appreciation from the international community as well as from respective African countries.
Moreover, economic resources of Bangladesh and Africa are complementary, not competitive in nature. So, there is a bright prospect for cooperation.
If initiatives from both public and private sectors are taken in this respect, then Bangladesh could emerge as the most active and valuable development partner of African continent.
The writer is a PhD researcher at the Marketing Department
of Dhaka University.
seahsan@gmail.com
Financial Express :: Financial Newspaper of Bangladesh
Bangladeshi nationalists please feel free to comment on this.
@madx
@Moander
@ShadowFaux @DURJOY @Banglar Bagh
@RiasatKhan
@saleen_s7
@yasinbin @iajdani @CaPtAiN_pLaNeT @eastwatch @asad71 @animelive
@sepoi
@PlanetSoldier
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