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Is Another ‘Scramble for Africa’ Underway?

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Zambian economy

There is another scramble for Africa according to international media, but this time it is about who can best profit from the continent’s business opportunities. And the charge is being led by foreign powers, with 70% of coverage about business in Africa referencing China, the USA, Russia, France, and the UK, according to the newly launched The Business in Africa Narrative Report, by Africa No Filter and AKAS.

The report shows that the keywords, stories, frames, and narratives associated with business on the continent are dangerously distorted. There is an overemphasis on the role of governments, foreign powers, and larger African states alongside an underappreciation of the role of young people, women, entrepreneurs, creative businesses, smaller successful African states, and Africa’s future potential.

Moky Makura, Executive Director at Africa No Filter, said: “We wanted to understand why Africa is seen as a high-risk business destination and why the cost of money is at a premium. The report gives us an insight into why. It shows that business opportunities on the continent are both underrepresented and misrepresented, and now that we know this, we can work on educating the media and changing the narrative around business in Africa.”

Richard Addy, report author and co-founder of award-winning international audience strategy consultancy, AKAS, added: “This ground-breaking report offers a detailed data analysis on the narrative around business in Africa. This rigorous research is important because narratives, frames and stories are the lenses through which we perceive and experience Africa. They inform beliefs, behavior and ultimately dictate policy.”

In addition to the dominance of foreign powers in business stories featured in international media, the report highlighted a number of other key frames dominating dangerous distortions played out in stories, and the underrepresentation of businesses across the continent, including:

  • More negative coverage: International media are more likely to have a negative tone. African media are twice as likely to reference corruption in their coverage of business in Africa compared to international media, with corruption featuring in 10% of African media stories.
  • Africa is Nigeria and South Africa: Nearly 50% of articles in global media outlets reference South Africa or Nigeria, crowding out business stars like Mauritius, Namibia, and the Seychelles. Mauritius is the highest-ranking African country in the World Economic Forum’s Global Competitiveness Index.
  • Silencing creativity, amplifying technology: Nollywood is the world’s second-largest film industry, and music genres like AfroBeats and AmaPiano are influencing pop culture globally, yet creative businesses were only featured in 1% of all business news articles across African and global media. Additionally, while 22% of Africa’s working-age population started new ventures between 2011 and 2016, the highest rate of any region globally, African start-ups received declined coverage.
  • Youth and women are underrepresented: African countries claim the top three spots in the Mastercard Index for the highest concentration of women business owners globally, but business news and analysis on gender equality issues have declined. Africa also has the youngest population globally. However, youth and women are underrepresented in business stories. In fact, online news coverage of young people has declined between 2017 and 2021. In addition, stories about African youth globally are often framed through negative stereotypes, invoking images of inactivity, violence, and crime.
  • Government, policy, and regulations dominate: 54% of business news in 2021 was framed through government action and policies. Additionally, African media focused more on themes related to government than on those related to entrepreneurship. Yet, African countries make up six of the top 10 countries whose populations were most likely to search for the topic of entrepreneurship in 2021.
  • Missing Free Trade Area and investment: The African Continental Free Trade Area is the largest free trade area in the world by the number of countries taking part, yet it makes up under 1% of business news and analysis while mentions of Foreign Direct Investment fell from 3.2% in 2017 to an even lower 1.9% of coverage in 2021.

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Economy

Inflation Rate Increases to 16.82% in April in Nigeria

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Nigeria's Inflation Rate - Investors King

Prices of goods and services in Africa’s largest economy Nigeria rose high in the month of April, according to the latest report from the National Bureau of Statistics (NBS).

The Consumer Price Index, which measures inflation rate, grew at 16.82% rate in the month under review from 15.92% in March 2022. The inflation rate has been on a steady rise since Novermber 2021 when it drops to 15.40%.

On a month basis, inflation increased to 1.76 percent in April 2022, representing an increase of 0.02% from 1.74% recorded in March. The persistent increase in prices reflect the changes in Nigeria’s economic fundamentals. One of the key challenges impacting prices is foreign exchange scarcity.

Naira to Dollar exchange rate jumped to N600/US$1 at the parallel market popularly known as the black market despite the Central Bank of Nigeria discouraging patronage at that section of forex. However, inability to access forex at central bank designated deposit money banks forced most Nigerians to the unregulated black market.

Similarly, the drop in the nation’s external reserves due to the lower crude oil production from the year to date dragged on foreign revenue that eventually hurt central bank ability to service the economy with enough forex in an economy that imported over 90% of its consumption.

Again, rising insecurities in key food producing regions contributed to the jump in prices of food items as noted in the report. The composite food index grew at 18.37% rate in April 2022, slower than  the 22.72% filed in April 2021.

According to NBS, the increase in the value of the index was due to rise in prices of Bread and cereals, Food
products n.e.c, Potatoes, yam, and other tubers, Wine, Fish, Meat, and Oils.  On a monthly basis, food sub-index grew 0.01% to 2% in April from 1.99% in March.

However, the more accurate 12 month index reflect decline in food index from 19.21% filed in March 2022 to 18.88% in April 2022.

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Economy

ICT Changing The Face of Nigeria’s Economy

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Paris - Investors King

While many thought the oil sector would save the Nigerian economy, the drift is gradually shifting away from the oil sector into the non-oil sector – the Information and Communications Technology (ICT).

A recent data revealed by the National Bureau of Statistics, sighted by Investors King, shows that the ICT has contributed 16 per cent to the growth of Nigeria’s Gross Domestic Product (GDP). 

On a year-on-year basis, compared to the previous year in the same quarter, ICT contributed 14.9 per cent to the GDP – a growth of 1.3 per cent. 

According to the data released by NBS, “In nominal terms, in the first quarter of 2022 the sector growth was recorded at 20.54 per cent (year-on-year), 12.68 per cent points increase from the rate of 7.86 per cent recorded in the same quarter of 2021, and 14.84 per cent points higher than the rate recorded in the preceding quarter. The Quarter-on- Quarter growth rate recorded in the first quarter of 2022 was -1.87 per cent.  

“The Information and Communications sector contributed 10.55 per cent to the total Nominal GDP in the 2022 first quarter, higher than the rate of 9.91 per cent recorded in the same quarter of 2021 and higher than the 9.88 cent it contributed in the preceding quarter”.   

The report added that the sector, in the first quarter of 2022, recorded a growth rate of 12.07 per cent in real terms, year-on-year.

From the rate recorded in the corresponding period of 2021, there was an increase of 5.60 per cent points. Quarter-on-Quarter, the sector exhibited a growth of -9.09 per cent in real terms.  

“Therefore, of total real GDP, the sector contributed 16.20 per cent in 2022 first quarter, higher than in the same quarter of the previous year in which it represented 14.91 per cent and higher than the preceding quarter in which it represented 15.21 per cent,” the data revealed. 

The Information and Communications sector in Nigeria comprises of Telecommunications and Information Services, Publishing, Motion Picture, Sound Recording and Music Production and Broadcasting. 

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Economy

Nigeria’s Economy Moderates in Q1 2022 as Oil Sector Contracts by 23.89%

Nigeria’s GDP moderated to 3.11% year-on-year in real terms in the first quarter (Q1) of 2022

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Lagos Nigeria - Investors King

Despite the surge in global oil prices due to the ongoing war in Ukraine, the Gross Domestic Product (GDP) of the largest exporter of the commodity in Africa, Nigeria moderated to 3.11% year-on-year in real terms in the first quarter (Q1) of 2022, the National Bureau of Statistics (NBS) stated in its latest report.

Nigeria’s GDP was 2.60% higher than the 0.51% recorded in Q1 2021 when COVID-19 disrupted business activity and dragged on economic productivity. However, this was 0.88% lower than the 3.98% filed in the fourth quarter of 2021.

On quarterly basis, the nation’s real GDP grew at -14.66% in the quarter under review when compared to the fourth quarter of 2021.

Aggregate GDP increased by 13.25% year-on-year from N40,014,482.74 million in nominal terms in the first quarter of 2021 to N45,317,823.33 million in Q1 2022. According to the NBS, “the nominal GDP growth rate in Q1 2022 was higher relative to the 12.25% growth recorded in the first quarter of 2021 and higher compared to the 13.11% growth recorded in the preceding quarter.”

Nigeria’s Oil Sector

In the first quarter, Nigeria’s crude oil production dropped to 1.49 million barrels per day (mbpd), down from 1.72mbp achieved in the same quarter of 2021. This was also lower than the 1.50mbpd recorded in the fourth quarter of 2021. Suggesting that despite the increase in global oil prices in the quarter, Nigeria’s inability to up crude oil production impeded investment in the sector and subsequently dragged on revenue generation.

As expected, the real growth of the oil sector contracted by 26.04% year-on-year in Q1 2022, representing a decline of 23.83% when compared to the same quarter of 2021. Also, growth decreased by 17.99% when compared to -8.06% filed for Q4 2021.

On a quarterly basis, the oil sector grew by 9.11% in the quarter under review. The sector contributed 6.63% to Nigeria’s total real GDP in Q1 2022, own from 9.25% contributed in the corresponding quarter of 2021 and slightly higher than the 5.19% achieved in Q4 2021.

Nigeria’s Non-Oil Sector

As usual, the non-oil sector grew by 6.08% in real terms in the first quarter. This was better than the 5.28% recorded in the first quarter of 2021 and 1.34% higher than the fourth quarter of 2021.

The report attributed the growth in the non-oil sector to the increase in activities in the following sectors; Information and Communication (Telecommunication); Trade; Financial and Insurance (Financial Institutions); Agriculture (Crop Production); and Manufacturing (Food, Beverage & Tobacco).

Nigeria’s non-oil sector contributed the most to total economic growth. The sector contributed 93.37% to the nation’s GDP in the quarter under review.

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