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Africa’s GDP growth masked low productivity

Africa’s GDP growth masked low productivity

Strong Gross Domestic Product (GDP) growth in Africa has masked disappointing productivity, according to the Institute of Chartered Accountancy in England and Wales’s (ICAEW) latest Economic Insight: Africa Q2 report. Over the last 15 years trade and investment have buffered the continent against the global financial crisis. However, according to the accountancy and finance body, this has hidden low productivity figures – despite much greater potential for economic ‘catch up’
The report notes that from 2000 to 2015, the average GDP growth across the continent was 4.8% per annum, a full 2.3 percentage points faster than the global average during the 1990s. This is only marginally slower than the Association of South East Asian Nations (ASEAN) region, which grew by an average 5.6% per annum and around 0.2 percentage points faster than the Middle East region.
Michael Armstrong, Regional Director, ICAEW Middle East, Africa and South Asia said “Matching the performance of some other emerging market regions might, at face value, seem respectable enough. But the truth is that Africa is starting from a much lower level of economic development than these economies.”
Lack of relevant data makes it impossible to disaggregate investment spending in more detail in the vast majority of countries. However the lack of relationship between investment and productivity performance might be explained by the type of capital in which funds have been invested. For example, high-end property development in Africa’s most expensive cities – four of which feature in Mercer’s 2015 Global Cost of Living survey – could have a substantial impact on investment relative to GDP. However it is less likely to boost wider productivity. With that being said, growth in manufacturing has been particularly encouraging in Ethiopia, Republic of Congo and Tanzania, as have productivity improvements in agricultural sectors in Rwanda, Botswana and Ghana.
“Agriculture will always play a key role in Africa’s economy. Poor agricultural output, combined with weaker exports and the current pressure exerted by low global oil prices, has undermined currencies in the region,this has further fuelled inflationary pressure,” added Michael.
Tom Rogers, Associate Director, Macro Consulting at Oxford Economics, said “Excluding oil-intensive economies such as Angola, Nigeria, Equatorial Guinea and Mozambique, average output per worker in sub-Saharan Africa grew by just 1.7% per annum from 2000 to 2015, and in half of sub-Saharan economies by less than 1% per year.”
“ The fact is Africa has tremendous economic potential, but realizing it will depend on being able to move up the value chain and deliver productivity improvements. For example, crop yields in largely agrarian economies are typically lower than in other major producers. Solving these problems would enable African producers to compete more effectively with farmers from other parts of the world, freeing up labour to move to manufacturing sectors,” Rogers added.
About ICAEW
1. ICAEW is a world leading professional membership organisation that promotes, develops and supports over 145,000 chartered accountants worldwide.

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Following reverse listing, public can now acquire shareholding in Paratus Namibia

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20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.