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Business is brewing in the world’s newest country

Gabriel Demombynes's picture

Emerging from decades of violent conflict, with more than half its population living below the national poverty line and three quarters of the population never having attended school, South Sudan may seem like an unlikely place for setting up a successful, modern manufacturing business.

However, we recently saw an exciting example of what the private sector can achieve even under these conditions:  the Southern Sudan Beverages, Ltd (SSBL) plant, which produces beer, soft drinks, and bottled water for the local market.

SSBL started production in 2009 after investing $37 million to build the facility; a $15 million expansion is now underway.  The plant looks like a modern manufacturing enterprise—with one exception: it is largely self-contained, with its own generators and a treatment plant for the water that is pumped up from the White Nile.

Why has the Kenyan Shilling declined so sharply?

Wolfgang Fengler's picture

How would you feel if, after a normal take-off, you noticed one of the engines on your plane wasn’t working properly? What if you then found out the other engine was overheating? Now suppose the captain announces that you should buckle-up because the plane is about to meet an approaching hurricane?

This is what Kenya’s economy is currently going through. The country is in the middle of a perfect storm, and the declining Shilling is the most visible manifestation of Kenya’s economic woes. Why has the Shilling been falling so much and so unpredictably?

The main reason is that Kenya’s economy is increasingly imbalanced: the country is importing too much and exporting too little.

Droughts and Famines in East Africa: From man-made problems to man-made solutions

Wolfgang Fengler's picture

How can droughts and famines be avoided? This is the big question many conferences and summits have grappled with in recent weeks. Unfortunately, it will be very difficult to avoid droughts in future because climate change will put more pressure on scarce land and extreme climate events, both rains and floods, will likely occur much more frequently — and even more unpredictably.

The first famine I remember was brought on by the horrible drought in Ethiopia in 1984. At that time, I was a boy in high school and one of Germany’s most famous actors, Karlheinz Boehm, visited our school to mobilize funds to help the suffering Ethiopians. He had previously established the charity, People for People. One of the silver linings of today’s suffering is the outpouring of financial support by ordinary Kenyans who have been moved by the intense suffering of their fellow citizens.

So how can we avoid this same crisis two years down the road? Or as my Kenyan friends say: How do we keep from begging again for money?

Protecting the Minnow - Lesotho Economic Update

As uncertainty increases about where the global economy is headed and whispers grow about a “double-dip,” spare a thought for Lesotho.

A small developing country (population less than 2 million), Lesotho is located in one of the most resource-poor parts of Southern Africa.  Around 37% of households live on less than $1/day and about half are below the national poverty line. As a small and relatively undiversified economy, heavily dependent on foreign markets, Lesotho is very vulnerable to shocks. It is also ill-equipped to deal with them.

Is Africa more vulnerable to oil price increases?

Shanta Devarajan's picture

As world oil prices rise to near the levels of 2008, and growth on the continent resumes to pre-crisis levels (as reported on Africa’s Pulse), a natural question to ask is whether Africa’s oil importers are becoming more vulnerable to oil price increases. 

A partial answer is given by a recent briefing note by my colleague Masami Kojima.

Vulnerability is determined by how much of a country's income is spent on oil imports. Looking at the period 2003-2008 (the latest for which comparable data are available), the study found that vulnerability rose in all oil importers (except Mauritania) and even in some oil exporters such as Equatorial Guinea and Republic of Congo. Also, 15% of the income of Seychelles, Liberia and Sierra Leone is used to import oil. This is among the highest in the world.

Interestingly, despite a significant increase in the price of oil during that period, the rise in vulnerability happened because energy became more oil-driven in 24 out of 42 countries.

Unlocking the Kinshasa-Brazzaville Bottleneck

Gözde Isik's picture

Kinshasa-Brazzaville is predicted to become Africa’s largest, and the world’s 11th largest, city by 2025.

With an international border running right through it, it is the obvious focal point for cross-border exchanges between the two Congos. But despite this, formal trade and passenger traffic between the two cities is pitifully small.

Seeds for Higher Growth in Rwanda

Birgit Hansl's picture

Rwanda’s economy is growing at a healthy rate--7.5 percent in 2010, two percent higher than the East African Community (EAC) and even more than Sub Saharan Africa (SSA).

During 2010, the services and industrial sectors progressed in their recovery, while growth in the agricultural sector slowed down marginally.  The country’s macroeconomic framework was remarkably stable, given the difficult external post-crisis environment and Rwanda’s position as a highly import-dependent, land-locked country. This was mainly achieved through a prudent fiscal stance with strong focus on priority expenditures, assisted by continued grant financing from donors.

Africa on the brink of a take off

Shanta Devarajan's picture

Dear friends,

Today we are trying something new.

I wanted to share with you the reasons why I think we can be optimistic about Africa's development prospects, but rather than writing something up, I thought of using video.

Please, share your feedback, not only on whether you agree that Africa is on the right track, but on the video itself. If you like it, I would like to do more of this short video "Development Talks" with the readers of this blog.

Let me know what you think.

 

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