The mining of social media and the use of big data (vast amounts of available internet data that can be analysed and exploited) by insurers to analyse consumer behaviour will change the face of insurance. The basic principles of insurance include the good faith sharing of information between insurer and insured, a pooling of good risks with bad risks, and assessing a fair premium for policyholders. Paradoxically regulations, that require insurers to price more competitively and estimate their reserves more precisely to see that they are sufficiently capitalised, are leading insurers to find ways to price insured risks more accurately.
It is possible using computer algorithms to tap data from social media posts and other internet sources to evaluate the risks of insuring a particular person. The information that is posted and an individual’s “likes” can help assess personality traits. It is claimed that people who use superlatives like “always” or “never” imply overconfidence and are bad driving risks. What you like and don’t like, how you write and how many exclamation marks you use could be used against you in assessing your motor premium. It is possible by mining big data to find out all sorts of information about what people eat, what they do, how they drive and what they buy from the pharmacy. Devices such as sensors in vehicles and health-monitoring watches and step-counters will reveal data relevant to motor, life and disability risks. What you post about yourself on social media could in future determine what premiums you pay for insurance or whether you can get insurance at all. If you have a genetic test to predict possible future illness, that information should be disclosed to your insurers when you take out a new policy and could be used to discriminate against individuals whether you disclose the information or not. If you don’t disclose the information, your policy could be cancelled from inception because of the failure to make the disclosure. If you do, you may pay higher premiums or struggle to find insurance.
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The Equality Act does not label discrimination as unfair if it is based on objectively determinable criteria “intrinsic to the activity concerned”. The question is going to be asked whether discrimination between policyholders on prohibited grounds, such as disability or health status based on the analysis of social media and big data to find out intimate details about each individual, is based on evidence intrinsic to the activity of insurance. Insurers, in terms of their duty of good faith, will have to reveal to a potential insured the basis of any discrimination which could lead to challenges against the use of internet sources under equality legislation. In 2014 insurers in the UK agreed not to take account of predictive genetic tests when deciding on insurance cover unless it is to the insured’s advantage and undertook to be transparent when they do use that data. Some compact is going to be necessary between insurers and regulators.
A balance will have to be found in order to keep the principles of insurance alive without any unfair discrimination. If a balance is not found, compulsory pooling of risks may be the result in relation to certain kinds of insurance which will undermine the social value of insurance and its role in the economy.
Likes and dislikes is the stuff of discrimination, so we need to find ways of balancing the ways that we deal with other people, not the least in the world of insurance.
*Patrick Bracher is from Norton Rose Fulbright South Africa

How insurers are using your social media profile to spy on you

Access to electricity is key to Africa’s future. It is the springboard to increased prosperity and a better quality of life. Without it, children struggle to study, ideas won’t be transformed into thriving businesses and the continent will never completely plug into the global economy.
But as many as seven in ten Africans can’t depend on reliable power. This is a huge brake, both on their ambitions and the continent’s development. Unless we can overcome this energy deficit, Africa’s economic and social progress will be crippled.
The scale of the challenge is clear. Only 60 per cent of properties in sub-Saharan Africa are connected to an electricity grid. Rural areas, in particular, find themselves cut off from power.
Millions of Africans know, connection itself is by no means a guarantee of reliable supply. Blackouts are a fact of everyday life across much of the continent.
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In Ghana, Afrobarometer found that, while 87 per cent of homes are connected to a grid, less than half enjoyed reliable power. The African Development Bank discovered that manufacturers lose an average of 56 days a year of production because of power shortages.
And when energy does arrive, the price can be three times more than consumers pay in other regions – even in those countries with similar levels of economic development. When businesses or families have to rely on diesel-based generators, costs can be even higher.
With Africa’s population forecast to double to 2.4 billion by 2050, the continent is set to make up nearly a quarter of the global workforce. Managing the mismatch between power supply and demand requires urgent action. This is why providing the power Africa needs ranks among the most important global challenges.
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Africa does not lack energy resources. The continent has vast fossil fuel reserves, and will be powered by renewable energy in the longer term. Its climate in large parts provides ideal conditions for solar and wind power generation. Only a fraction of Africa’s hydroelectric and geothermal potential has yet been exploited.
Innovation, investment and partnerships are needed to harness this rich energy potential, and ensure the continent’s communities and businesses can prosper.
Since 2000, investment in sub-Saharan African energy supply has more than doubled. But it is still nowhere near enough to meet the shortfall in generation capacity and, critically, to put in place the infrastructure to get electricity to the entire continent.
Official estimates show that sub-Saharan Africa will need $450 billion in power sector investment within the next 20-30 years. Most of this will have to come from outside our continent.
This is why partnerships are so critical to overcoming Africa’s energy challenge. We need the courage to forge new partnerships and show investors the rewards of working with African governments and companies, to drive growth within the continent. In turn, governments will have to work hard to provide the stable conditions to attract investment.
We also need to take a regional view. One successful example is the Southern African Power Pool (SAPP). SAPP connects 12 countries across the region. This means that power coming from a new gas-powered plant in north-east Mozambique won’t just help get electricity to the 70 per cent of the population in that country without access. It also offers the possibility of sending it to places it is needed, such as Malawi or Zambia.
Just as we have adapted mobile technology to leapfrog the need for fixed phone networks, Africa can also lead the world in innovative energy solutions.
These solutions must also be combined with initiatives tailored to local conditions and communities, using the resources available in those places. In some areas, small-scale solar power combined with biomass technology can meet the needs of rural villages without expensive power lines having to be put in place.
Solutions must also be affordable for the consumer. For example, replacing charcoal with more affordable and environmental friendly briquettes saves consumers money, as well as the environment. Great Lakes Africa Energy is take a lead in such initiatives.
Tackling Africa’s energy deficit must be a priority for the continent. But it should also be high on the global agenda. Providing access to reliable and affordable energy is key to Africa’s prosperity. And a prosperous Africa is key to a strong global economy in the decades ahead.
*Humphrey Kariuki is Chairman of Great Lakes Africa Energy and the Dalbit Group

Op-ed: Tackling Africa’s energy deficit must be a priority for the continent

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The constant connectedness of life in 2017 often puts a premium on speed: the sooner, the faster, the better. &#8220;The more output you produce, the better your shot at stumbling onto greatness,&#8221; according to organizational psychologist and &#8220;Option B&#8221; co-author, Adam Grant.
Not so, says best-selling author <a class="inline_asset" href="http://www.newyorker.com/contributors/malcolm-gladwell" target="_self">Malcolm Gladwell</a> — instead, greatness is about performance.
&#8220;In any kind of high-stakes job where the penalty for error is high, you can&#8217;t afford to have hares,&#8221; <a class="inline_asset" title="https://heleo.com/conversation-malcolm-gladwell-on-why-we-shouldnt-value-speed-over-power/13687/" href="https://heleo.com/conversation-malcolm-gladwell-on-why-we-shouldnt-value-speed-over-power/13687/" target="_self">Gladwell tells Grant</a> during an interview at Wharton Business School.
Gladwell, who studied <a class="inline_asset" title="http://gladwell.com/outliers/outliers-q-and-a-with-malcolm/" href="http://gladwell.com/outliers/outliers-q-and-a-with-malcolm/" target="_self">individuals who have achieved remarkable success</a> for his book &#8220;Outliers,&#8221; uses lawyers as an example of where the relationship between speed and performance can break down.
&#8220;We do not want the high output, lots-of-errors lawyer,&#8221; says Gladwell.
&#8220;Can you imagine a lawyer who said, &#8216;Here&#8217;s the contract, take a look. If it turns out it&#8217;s not right we can just go back and do another version later,'&#8221; says Gladwell. &#8220;Are you kidding? That&#8217;s a disaster.&#8221;
Gladwell continues: &#8220;In the financial crisis, someone put the comma in the wrong place and ended up paying $20 a share for Lehman and not $2 a share. Who was the person who read that document at 2:00 in the morning? The hare.&#8221;
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<div class="group-container ">&#8220;IN ANY KIND OF HIGH-STAKES JOB WHERE THE PENALTY FOR ERROR IS HIGH, YOU CAN&#8217;T AFFORD TO HAVE HARES.&#8221;&#8211; Malcolm Gladwell, best-selling author</div>
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In some cases, working more slowly, producing less but higher quality work results in greater levels of success. For instance, the publishing industry pressures writers to write quickly, but Gladwell says quality work takes time.
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&#8220;As a writer, my principal observation about why other writers fail is that they are in too much of a hurry,&#8221; says Gladwell. &#8220;I don&#8217;t think the problem with writing in America right now is a failure of output. I think it&#8217;s a failure of quality.&#8221;
The New Yorker, which Gladwell writes for, is a good example.
&#8220;The New Yorker is a hit-driven enterprise, that probably eight articles a year account for 90 percent of people&#8217;s interest in the product, and so to the extent you could encourage people to write fewer hits, you&#8217;re better off.&#8221;
Generalizing that speed is correlated with competence is a good way to miss out on some very talented people, according to Gladwell.
He suggests using apprenticeships or trial periods when hiring, which he says are a version of privileging power over speed. By giving potential hires a reasonable period of time to demonstrate their competence, managers are able to assess the strength of candidates without biasing for how fast they work.
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Gladwell concludes: &#8220;Let&#8217;s create a safe space for the neurotic tortoise.&#8221;
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Malcolm Gladwell: Here’s why you should slow down and do less

Since the 19th century <a href="https://www.theguardian.com/commentisfree/2012/may/01/may-day-history-international-workers-day">May 1</a> has been International Worker’s Day, chosen by organised labour to celebrate the contribution of workers around the world. But it’s frequently forgotten that the day actually celebrates a particular achievement of the labour movement: being able to do less work. Not better paid or decent work, but shorter working hours.
May 1 initially commemorated the 1886 <a href="http://www.encyclopedia.chicagohistory.org/pages/571.html">Haymarket affair</a>, where Chicago workers were striking for a radical and dangerous proposal: the eight-hour work day. This idea was so incendiary that the protests turned violent; both police and protesters died in the conflict.
Today more and more people around the world are facing <a href="https://www.weforum.org/agenda/2016/11/precariat-global-class-rise-of-populism/">precarity</a>, casualisation, inequality and unemployment. It’s time to pursue a new agenda for a new global labour movement – or rather, to update the old agenda of the 19th century: less working time and more money for all, in the form of shorter work days and a universal basic income.
<h2>What happened to the struggle?</h2>
An eight-hour work day and weekends off were far from the norm for most full-time workers before the early 20th century. They usually <a href="http://sk.sagepub.com/reference/activism/n289.xml">worked</a> 12 to 16 hours a day, six days a week. It took a protracted, often <a href="https://iww.org/history/library/misc/origins_of_mayday">violent</a> organised labour <a href="http://www.tandfebooks.com/doi/view/10.4324/9781315778426">struggle</a> in the face of strenuous <a href="http://tems.umn.edu/pdf/EPThompson-PastPresent.pdf">opposition</a> to change that.
Forty-hour work weeks were finally legislated around the world less than a century ago. This seemed like just the beginning. The economist John Maynard Keynes <a href="http://www.econ.yale.edu/smith/econ116a/keynes1.pdf">predicted</a> in 1930 that thanks to technology, within a century we’d all stop worrying about subsistence. We’d work 15 hours a week, just enough to keep us from getting bored.
In some ways he was right. Technological advancement has exceeded his wildest dreams; productivity and output per worker has <a href="http://groups.csail.mit.edu/mac/users/rauch/worktime/">soared</a>. But this has proven to be our problem rather than a source of liberation.
As productivity grew and each worker could produce ever more output, we consumed more and more stuff so that full time, 40-hour-a-week employment could stay stable. Now we’ve reached our limits, with climate change, pollution, deforestation and extinction spiralling out of control. We <a href="https://theconversation.com/time-for-degrowth-to-save-the-planet-we-must-shrink-the-economy-64195">can’t afford</a> to keep consuming ever more.
We’ve also moved into a different phase of automation, a “<a href="https://www.theguardian.com/business/2016/jan/19/fourth-industrial-revolution-set-to-benefit-richest-ubs-report-says">fourth industrial revolution</a>” where artificial intelligence and machine learning can do the work of <a href="https://www.wired.com/2017/02/robots-will-soon-taxes-bye-bye-accounting-jobs/">accountants</a>, <a href="https://hbr.org/2016/10/robots-will-replace-doctors-lawyers-and-other-professionals">lawyers</a> and <a href="https://www.nytimes.com/2016/02/28/magazine/the-robots-are-coming-for-wall-street.html">other</a> professionals.
The logical solution would be to enjoy such automation by working less (while the amount of stuff produced remains the same with machines’ help). Instead, those of us lucky enough to be formally employed still work nominally 40-hour weeks (in reality too often working <a href="http://www.newyorker.com/business/currency/the-death-of-moritz-erhardt-and-keyness-mistake">far</a> <a href="http://www.iol.co.za/news/south-africa/western-cape/young-doctors-dangerously-overworked-2034705">more</a>) while ever more people can’t find any <a href="http://www.ilo.org/global/research/global-reports/weso/2015-changing-nature-of-jobs/lang--en/index.htm">steady</a> employment.
The fruits of soaring productivity growth and the wealth generated by automation are <a href="https://www.weforum.org/agenda/2016/04/will-robots-take-our-jobs-this-is-what-economists-think/">not being redistributed</a> via rising salaries or shorter working hours. Instead they are captured by a tiny global elite. <a href="https://www.oxfam.org/en/research/economy-1">The richest 1%</a> now has more wealth than the rest of the world put together. Yet there isn’t a mass organised struggle explicitly calling for a redistribution of wealth and work.
Instead, in places as varied as <a href="http://www.sahistory.org.za/article/xenophobic-violence-democratic-south-africa">South Africa</a>, the <a href="https://www.usatoday.com/story/news/2017/02/02/anti-immigration-history-repeats-itself-100-years-later/97347642/">US</a> and <a href="http://www.vox.com/2016/6/25/12029786/brexit-uk-eu-immigration-xenophobia">Europe</a> increasingly frustrated, alienated populations faced with the rise of precarious work and wage stagnation point their finger at foreigners and immigrants. Their calls are not for redistribution, but for isolation and xenophobic exclusion.
South Africa is a prime example of this contradiction. It’s the most <a href="http://data.worldbank.org/indicator/SI.POV.GINI">unequal</a> major country in the world, with staggering <a href="https://mg.co.za/article/2016-08-04-00-figures-suggest-sa-has-the-highest-concentration-of-wealth-in-the-hands-of-a-few">wealth</a> and unemployment rates. It has experienced years of deindustrialisation and jobless growth.
South Africa is experiencing the sorts of contradictions that follow in <a href="http://m.mgafrica.com/article/2016-01-28-look-away-ethiopia-south-africa-and-nigeria-the-robots-are-coming-for-your-jobs">automation’s wake</a>. Factory and even <a href="http://www.itweb.co.za/index.php?option=com_content&amp;view=article&amp;id=156262">service jobs</a> are being <a href="https://www.dailytrust.com.ng/news/business/automation-will-wipe-out-jobs-in-africa-others-w-bank/194364.html">automated</a>, and CEOs earn <a href="https://qz.com/841172/the-bloomberg-ranking-of-ceo-salaries-shows-that-south-african-executives-earn-the-most-relative-to-the-average-income/">541 times</a> the average income. Meanwhile, people desperate for a wage resort to what anthropologist David Graeber terms “<a href="http://strikemag.org/bullshit-jobs/">bullshit jobs</a>” like pumping other people’s petrol or watching their parked cars.
South Africa’s inequality isn’t just a matter of income or wealth. It’s also a matter of working hours – some people have too many, some none at all.
<h2>From labour to leisure</h2>
An obvious solution would be to cut back on the standard work week so that demand for labour goes up.
Education institutions would have to scramble to fill some of the demand for skilled workers. But the pressure might be a good thing. It would push the school system to produce well-equipped graduates, and provide new solutions to problems such as the <a href="https://mg.co.za/tag/fees-must-fall">university fee crisis</a>, spurring greater urgency for the state or private sector to underwrite higher education programmes.
This would also decrease inequality. The only way to keep wages the same while hiring more people is for wealth to get spread out: for the highest earners and others who capture the fruits of corporate profits (i.e., <a href="https://www.jacobinmag.com/2017/01/rich-universal-basic-income-piketty-passive-income-capital-income/">shareholders</a>) to get less so workers get more.
<a href="http://neweconomics.org/2010/02/21-hours/">Shortening working hours</a> has also been linked with a host of other social goods like better health outcomes, less impact on the environment, higher gender equity, and increased happiness and <a href="https://www.nytimes.com/2016/05/21/business/international/in-sweden-an-experiment-turns-shorter-workdays-into-bigger-gains.html">productivity</a>.
Labour must also be decommodified more broadly. Then even those unable to sell their labour in a rapidly automating world would reap some of automation’s fruits.
The simplest proposal to achieve this is the <a href="https://www.dissentmagazine.org/online_articles/less-work-more-time-universal-basic-income-feminist-utopia">universal basic income guarantee</a>: the idea that everyone gets enough cash every month to cover essential living costs, no matter what. It’s <a href="http://www.scottsantens.com/negative-income-tax-nit-and-unconditional-basic-income-ubi-what-makes-them-the-same-and-what-makes-them-different">a redistributory measure</a>. If you earn enough to not need it, you <a href="https://medium.com/basic-income/if-we-can-afford-our-current-welfare-system-we-can-afford-basic-income-9ae9b5f186af#.15umt34yl">give it back</a> to the communal pot when paying your taxes.
If that aspect is taken into account, the proposal is surprisingly <a href="http://dx.doi.org/10.1080/10875549.2014.991889">affordable</a>. It could also end <a href="http://basicincome.org/?s=poverty">poverty</a>, stem <a href="http://basicincome.org/?s=inequality">inequality</a>, enable work that isn’t valued by capitalist markets (such as <a href="http://basicincome.org/?s=care+work">care work</a> or the <a href="https://composerjude.com/2015/03/04/vanishing-scarcity-at-nabig-2015/">arts</a>), and empower workers to bargain for better conditions without the fear of starvation or homelessness.
What we need are shorter working hours and a universal basic income. In other words, a leisure movement – not a labour movement.
<h2>Radical, and attainable</h2>
Such a call is both radical and attainable. It’s attainable because it simply spreads out the gains from productivity growth. It’s radical because we live with the <a href="http://www.d.umn.edu/cla/faculty/jhamlin/1095/The%20Protestant%20Ethic%20and%20the%20Spirit%20of%20Capitalism.pdf">cultural ramifications</a> of centuries of labour scarcity, when everyone had to work as much as possible to produce enough goods to go around. That’s not the case anymore, yet <a href="https://www.dukeupress.edu/The-Problem-with-Work/">the old mentality remains</a>: hard workers are morally superior, and laziness is unquestioningly a character flaw, a moral failing.
This is a default assumption not only among the middle and upper classes, but as <a href="https://www.youtube.com/watch?v=AVvZGrCeU9k">my own</a> and <a href="http://bulletin.ids.ac.uk/idsbo/article/view/362">others’</a> recent <a href="https://www.academia.edu/7798249/How_social_security_becomes_social_insecurity_unsettled_households_crisis_talk_and_the_value_of_grants_in_a_Kwazulu-Natal_village">research</a> in South Africa and Namibia shows, among the unemployed poor as well.
This proposal is also radical because it challenges the unopposed accumulation of wealth amongst a small elite. It will certainly be opposed by the very wealthy. But then, so were calls for a 40-hour work week.

The new labour struggle: less work, same pay, and basic income for all

ANDREW LAPPING | Allan Gray
Wow, that valuation changed quickly!
A few years ago investors were very excited about investing in Africa outside of South Africa. People spoke of Africa rising, the growing middle class, financial deepening, less reliance on commodities etc. Now the popular refrain is, “How do I get my money out?” The “Get me out” sentiment applies both to corporates that invested in plant and machinery and financial market investors. Andrew Lapping questions this mentality as he discusses where we are finding value in Nigeria.
As you can imagine, the valuations investors put on assets vary widely, depending on whether everyone is desperately trying to buy or rushing for the door. But to what degree do asset prices change? Let’s consider a few Nigerian examples.
<h2>Beta Glass</h2>
Beta Glass is a Nigerian glass bottle business. People generally know how long it takes and what it costs to build a glass bottle facility, so it is a fairly easy asset to value.
In May 2015, private equity company GZI agreed to buy 70% of Beta Glass from its parent company at a price that valued 100% of Beta Glass at US$265m. The deal fell through when GZI could not secure US dollar funding. Move forward to today: the enterprise value for Beta Glass on the Nigerian stock exchange is US$33m. A valuation change from US$265m to US$33m is substantial for an easy-to-value physical asset.
<h2>Nestlé Nigeria</h2>
Nestlé Nigeria (NN) is a very well-run business and the blue chip of the Nigerian stock market. At its peak in December 2013, investors valued NN at 40 times historic earnings on the back of vast growth potential: the Nigerian middle class was growing and Nestlé was only selling a handful of its 50 000 products in Nigeria. As retail formalised, investors anticipated that the company would sell more products to more people at higher prices with lower costs. When a business trades on 40 times earnings, investors are looking at least 10 to 15 years into the future and factors such as recessions and currency fluctuations should make almost no difference to the underlying business value. In December 2013 investors thought NN was worth US$6.2bn. Three years later, after a period when the underlying value should have increased as the business reinvested and grew production, investors think NN is worth US$1.6bn. For us, despite the 75% valuation cut, NN now only looks reasonably valued.
<h2>Focus on financials</h2>
Our area of interest in Nigeria is the financial sector, where the sentiment is truly extreme. The price level and valuation are one measure of sentiment, the very low volumes traded are another, but the best indicator is the incredulous looks on people’s faces when you mention buying Nigerian banks.
Nigeria is a country of 175 million people with a Gross Domestic Product (GDP) supposedly larger than that of South Africa. The potential for Nigerian GDP growth is huge if the Buhari government can get a few things right. The government is focused on reducing corruption, sorting out the electricity supply, growing the non-oil economy and broadening the tax base. Even partial improvements in a few of these areas will have a very positive impact on economic growth.
<h2>Nigerian banks: Out of favour</h2>
Banks are an important part of any economy and tend to do better in good times rather than bad. The Nigerian banking sector is well developed and far more consolidated than only 10 years ago. The quality of lending and oversight is also vastly improved from pre-2008, where the main business of banks was lending money to management to invest in the stock market. Needless to say that ended badly, with a number of banks going bust and most of the remainder being bailed out to some degree.
Investors dislike Nigerian banks for many reasons. It is not currently possible to get money out of Nigeria. Investors are unlikely to put new money into a country when they have no idea if they will be able to get cash out and at what rate. The naira is marked at NGN307/US$, but the expectation is for the currency to weaken sharply if the government allows a free float. It is possible to get small amounts of money in and out of Nigeria at a rate of NGN410/US$ by buying and selling Seplat Petroleum, which is listed in both Nigeria and the UK. Given the recovering oil production, higher oil price and weak domestic demand, I think a fair rate is probably somewhere between the NGN410/US$ and the official NGN307/US$. The naira is already substantially weaker than the NGN163/US$ of October 2014.
A sector-specific reason for the dislike of Nigerian banks is the distrust of the balance sheets. Given the tough economic times and low oil revenues, the Nigerian banks’ non-performing loans (NPLs) seem to be understated. Zenith, the largest Nigerian bank, discloses NPLs of only 3% and took a bad debt charge of 1.5% last year. The most trusted balance sheet belongs to Stanbic IBTC, a subsidiary of Standard Bank, which disclosed NPLs of 6.4% and took a bad debt charge of 5.6% in 2016. Despite this substantial charge Stanbic was comfortably profitable and trades on 7 times historic earnings.
When dollar funding was readily available many banks made the mistake of taking dollar deposits and term lending these dollars to oil companies. As the dollar shortage developed the banks had to pay back the dollar deposits but could not get the dollar term loans back, leading to an acute funding squeeze.
<h2>The investment case for Nigerian banks</h2>
There is clearly a lot not to like, so why do we own Nigerian banks in the <a href="https://www.allangray.co.za/globalassets/documents-repository/fund/factsheet/Allan%20Gray%20Africa%20ex-SA%20Equity%20Fund%20(USD)%20(Class%20A)/Latest/Allan%20Gray%20Africa%20ex-SA%20Equity%20Fund%20(USD)%20(Class%20A)%20Latest.pdf" target="_blank" rel="noopener noreferrer">Allan Gray Africa ex-SA Equity Fund</a>? Clearly we think the businesses will survive. Consider Zenith, our largest position. Zenith’s total loans are only 3.3 times that of its equity. This is a very low ratio by global standards. In South Africa the ratio is closer to 8 times. The low advances to equity ratio means Zenith can take a huge bad debt charge and still have a substantial equity buffer. The large Nigerian banks are also very profitable, which allows for a greater margin of error. In 2016 Zenith could have taken an 8.9% bad debt charge and still broken even. A bad debt charge of that magnitude would bankrupt most developed market banks.
A further positive is that the founders own around 9% of both Zenith and Access Bank, another large Nigerian bank. This level of insider ownership is very unusual in the banking industry. When a person owns 10% of a large business they usually care far more about long-term sustainability than a manager who is just trying to get an annual bonus. The tough times in Nigeria are culling some of the weaker banks leading to a better, more consolidated industry.
Even if the Nigerian economy does not grow much the banks have plenty of growth potential. The Nigerian mortgage and retail lending market is practically non-existent and the vast majority of transactions are still cash rather than electronic. Previously retail lending was difficult as Nigeria did not have a national identity (ID) system. This is changing as a biometric ID system is introduced. According to the World Bank, Nigerian bank loans equate to 23% of GDP, compared to 179% in South Africa and 45% in Kenya.
<blockquote>&#8230;THE NIGERIAN BANKING SECTOR IS WELL DEVELOPED AND FAR MORE CONSOLIDATED THAN ONLY 10 YEARS AGO&#8230;.</blockquote>
Zenith’s return on equity (ROE) has averaged 16.5% over the past 10 years, which includes the recent down cycle and a very difficult 2009. In future Zenith should be able to achieve a similar ROE to that achieved historically. If this is the case, the bank will earn NGN3.63 per share; the current price is NGN14.00. Zenith pays out 50% of its earnings as dividends; this indicates a 13% dividend yield – an attractive prospect.
What investors are willing to pay for a unit of Zenith’s net asset value (NAV) has fallen from 1.4 to 0.6 despite Zenith consistently growing its NAV, as shown in <a href="https://www.allangray.co.za/globalassets/articles/qc/2017/q1/andrew-graph1.png" target="_blank" rel="noopener noreferrer">Graph 1</a>.
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-121427" src="http://cnbc.africa/wp-content/uploads/2017/05/andrew-graph1.png" alt="" width="960" height="425" />
<h2>A reasonability check</h2>
The 10 largest banks in Nigeria have a market capitalisation of US$6.5bn. These 10 banks account for almost the entire sector, so it is possible to buy the Nigerian banking sector for US$6.5bn. Yes, some of these banks may be insolvent, but if they close down the deposits and customers will move to one of the other banks in the top 10. These banks have value for a few reasons: they hold US$50bn in customer deposits; they have significant infrastructure and provide banking services to the largest economy in Africa with a population of 175 million and they generated US$1.5 billion in profits over the past 12 months. To me US$6.5bn seems fairly cheap. In 2008, investors thought these 10 banks were worth US$35bn when they were much smaller, inferior businesses.
For context Capitec, a bank that offers low-cost transactional banking and microloans to the low and middle market segment in South Africa, is valued at US$7.5bn, 15% more than the entire Nigerian banking sector, as shown in <a href="https://www.allangray.co.za/globalassets/articles/qc/2017/q1/andrew-graph2.png" target="_blank" rel="noopener noreferrer">Graph 2</a>. Capitec generated US$240m in profits in the year to August 2016, only 16% of the profits of the top 10 Nigerian banks. Either Capitec is somewhat expensive or Nigerian banks are very cheap. Will Capitec or the sum of the current largest 10 Nigerian banks be worth more in 2027? I know where my money lies.
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-121428" src="http://cnbc.africa/wp-content/uploads/2017/05/andrew-graph2.png" alt="" width="960" height="425" />
Some may argue that all banks in Africa ex-SA deserve to trade on low valuations because the risks are so great. Consider Commercial International Bank (CIB), commonly regarded as the best Egyptian bank. During the Arab Spring in 2011 when risks were high and there was literally blood on the streets, CIB traded on 1.3 times net asset value. Now that investors like Egypt, CIB trades at 4.2 times NAV.
<h2>When is the best time to buy a share?</h2>
The time to buy a share is when earnings are low, those earnings are on a low multiple and the currency the asset is denominated in is weak. These opportunities don’t arise when things are going swimmingly, but rather when the risks seem overwhelming. Fortunately the risks to Nigerian banks are well reflected in the extremely depressed valuations.

Nigeria: Finding opportunities where others fear to tread

Ngozi Okonjo-Iweala | Gavi, The Vaccine Alliance | Thomson Reuters Foundation
* Any views expressed in this article are those of the author and not of Thomson Reuters Foundation.
<blockquote>Education is the strongest antidote to poverty and we have the opportunity to dramatically expand access to this remedy</blockquote>
Vaccinations of 1.6 million children are halting an outbreak of measles in <a href="http://www.phnompenhpost.com/national/new-measles-immunisation-effort-counter-outbreaks">Cambodia</a>. In drought-stricken Somalia, 450,000 people are being <a href="http://www.gavi.org/library/news/press-releases/2017/cholera-vaccination-campaign-begins-in-somalia/">immunized </a>against the spread of deadly cholera. And in Brazil, 3.5 million doses of yellow fever vaccine are being <a href="http://www.who.int/csr/disease/yellowfev/vaccination-in-Brazil/en/">deployed </a>to quell a potential epidemic.
All this happened in the past month, thanks to vaccines.
Nearly two decades ago, global leaders initiated a ground-breaking effort to get new and underused vaccines to the world’s poorest people. At the time, millions of children were dying each year from preventable diseases. The solution was ambitious but feasible: create a financing facility that would mobilize and leverage funds to vaccinate as many children as possible. What became known as the Gavi Vaccine Alliance has saved more than seven million lives. And over the past 20 years, child mortality has <a href="http://www.healthdata.org/research-article/child-and-adolescent-health-1990-2015-findings-global-burden-disease-injuries-and">plummeted </a>in nearly every country around the world.
Today we’re faced with a need that is just as urgent: we are endangering the futures of more than 800 million children who will not have access to quality education. By 2030, these young people will lack the basic secondary school-level skills necessary for 21st century jobs. They will not be able to shape their own futures or the economies of their countries, most of which – like my home country Nigeria – are struggling to climb out of poverty. Without the stabilizing foundation that an education provides, our youth might feel hopeless and turn to violence, fueling conflict and threats to global security.
We cannot afford to let this happen. But is there a clear solution? Can we vaccinate the world against poverty?
The answer is “yes,” but any solution will require both political will and a clear vision of what can be achieved. I am a member of the<a href="http://www.educationcommission.org/"> Education Commission</a> – a group of political, business, and civil society leaders from countries as diverse as Australia, Mexico, Pakistan, the UK, and Tanzania who work together to ensure that the world’s children are all in school and learning.
Our message is clear. The strongest antidote to poverty is quality education, and we have the opportunity to dramatically expand access to this remedy through a breakthrough financing plan for an International Finance Facility for Education.
We recently presented the proposed Facility during the World Bank/IMF Spring Meetings. At a series of gatherings in the U.S. capital – with development experts, African finance ministers, and more – the demand for such a Facility was evident, and we intend to act on this need.  In July, we’ll take the same proposal to the G20 Summit in Germany. It’s been shaped by listening to hundreds of people across 80 countries, representing a wide variety of organizations and sectors, including many young people.
The Facility would be built on a partnership between international donors and developing countries that have a deep desire and commitment to improve learning for their children. These latter countries would do much of the hard work, committing to scale up their investment in education from the current average of 4% to 5.8% of their GDP – up to $3 trillion annually by 2030 – and implementing meaningful reforms to ensure children are in school and learning. But even these high levels of spending plus external assistance from donors won’t be enough to cover costs. This is where the Facility comes in, working with the world’s development banks to coordinate funding and create attractive financing packages that multiply the impact of donor dollars to fill this funding gap.
Once in operation, the Facility could mobilize upwards of $13 billion annually for education by 2020. This would double the available external support we give today. Together with the commitments of developing countries, that will go a long way toward putting those 800 million children on track for healthier, more fulfilling, and productive lives. This investment in human capital would strengthen their families, communities, and countries, and make our world more stable and prosperous. That’s good news for everyone.
We know from experience that an innovative public-private partnership like Gavi can work. But can global leaders bring the same energy, funding, and focus to the challenge of dramatically expanding access to education? We hope that they will say yes, and give education funding a much-needed shot in the arm.
Dr. Ngozi Okonjo-Iweala is the Chair of Gavi and the former Minister of Finance of Nigeria

Can we vaccinate the world against poverty?

Non-governmental organisations have become key actors in responding to poverty and related suffering. In Africa, NGOs play a leading role in providing health care and education.
The non-profit sector <a href="http://js.sagamorepub.com/jnel/article/view/7583">continues to grow rapidly</a> in Africa and around the world. In South Africa alone, <a href="http://www.ngopulse.org/article/south-african-nonprofit-sector-struggling-survive-needing-thrive">there are more than 100,000 registered non-profit organisations</a> and in Kenya the <a href="https://pdfs.semanticscholar.org/3fe8/0fbfaae9da1888b7ade3ccc2b63511a38e2b.pdf">number of NGOs grew by over 400%</a> between 1997 and 2006. And for most observers, they seem to be well-intentioned actors who do a lot of good on the continent.
But NGOs also have their detractors who argue that they are receiving growing amounts of donor aid, but aren’t the most suitable actors for really improving people’s lives.
<h2>The cases made against the NGO sector</h2>
<a href="http://fahamubooks.org/book/?GCOI=90638100112660">Some critics</a> also insist that the neo-liberal policies advanced by powerful international actors have limited the influence of the state and that NGOs have benefited as a result.
<a href="http://web.inter.nl.net/users/Paul.Treanor/neoliberalism.html">Neo-liberalism</a> is an approach that favours a smaller role for the state in the economic arena. Advocates believe that the market and other non-state actors provide better services than governments.
Since the 1980s, international financial institutions like the World Bank and International Monetary Fund, have forced indebted African states to <a href="http://www.halifaxinitiative.org/updir/ImpoverishingAContinent.pdf">reduce public expenditure</a>. This has encouraged the flourishing of non-state actors like NGOs.
While both local and international NGOs have benefited from this move, African states have been <a href="http://www.un.org/en/africarenewal/subjindx/131ngo.htm">less able to access international aid</a>. This <a href="https://www.jstor.org/stable/4007077">undermines their sovereignty</a> and places African people at the mercy of donors.
NGOs are also criticised for their focus on technical solutions to poverty instead of the underlying issues. So, for example, an NGO might provide water tanks for the poor without addressing the power imbalances that resulted in some having water while others don’t.
<a href="http://www.sciencedirect.com/science/article/pii/S0305750X14002939">Another criticism</a> is that NGOs are more accountable to their funders than those they serve. Because they are largely dependent on funding, their projects are crafted in line with donor preferences instead of those they supposedly represent.
A final criticism relates to the fact that NGO workers tend to be foreigners or local elites. Instead of empowering local populations to organise themselves, NGOs provide <a href="https://mg.co.za/article/2006-07-14-the-power-of-love">employment and a sense of purpose</a> for elites with degrees in subjects like development studies.
<h2>Can NGOs fix Africa’s problems?</h2>
There’s much truth to these criticisms. But does this mean that NGOs have no role to play in Africa’s struggle for poverty and injustice?
A recent collection of articles titled <a href="http://ukznpress.bookslive.co.za/blog/2017/04/03/ngos-and-social-justice-in-south-africa-and-beyond-invites-careful-reflection-on-the-role-of-ngos-in-sa/">‘NGOs and Social Justice in South Africa and Beyond’</a>, which I edited, brings together the voices of NGO workers, academics and social activists to consider this question.
The contributors raise a range of interesting ideas like how radical change can still be achieved. Can profound changes be made while working within existing structures and organisations?
<a href="http://thinkingafricangos.blogspot.co.za/2014/08/the-missionary-position-ngos-and.html">Firoze Manji</a>, who has published widely on the topic of social justice, defines what freedom really means. He makes a distinction between “licensed freedoms” and “emancipatory freedoms”.
Licensed freedoms are achieved “within the system”. As such they improve lives but don’t dramatically change power dynamics. An example can be drawn from the apartheid era when activists convinced the state to make some concessions for black South Africans.
In contrast, emancipatory freedoms are about bringing about a new order. An example would be when people manage to defeat an oppressive state entirely.
Manji argues that NGOs empower people to attain licensed, rather than emancipatory, freedoms.
<h2>Pushing for social change</h2>
But NGO workers might rightfully argue that it isn’t so easy to distinguish between working within the system and working against it.
When an NGO teaches people to read, for example, this new ability might empower them to challenge things they had previously accepted. Learning this new skill might enable them to act in new, more empowering ways. So the achievement of a basic skill can enable populations to achieve emancipatory freedom.
Another example is <a href="http://www.ngopulse.org/resource/socio-economic-rights-south-africa-symbols-or-substance">brought out</a> by <a href="http://thinkingafricangos.blogspot.co.za/2014/05/there-is-no-outside-law-how-can-social.html">Tshepo Madlingozi</a> who is the advocacy adviser to the <a href="http://www.khulumani.net/">Khulumani support group</a> in South Africa.
He shows how NGOs and social movements fighting for radical change have been able to use the courts to gain small victories.
Court victories are often hollow. For example, in the <a href="https://mg.co.za/article/2008-08-08-grootboom-dies-homeless-and-penniless">Grootboom case</a> in South Africa Irene Grootboom won a court struggle against eviction, but ended up dying homeless eight years later.
But court struggles can draw attention to the plight of ordinary people and mobilise and unify those working towards certain radical goals. In this way the use of “the system” &#8211; in this case the courts &#8211; can help support the struggle for emancipatory freedoms.
<a href="http://thinkingafricangos.blogspot.co.za/2014/07/ngos-accountability.html">Ashley Westaway</a>, manager of an education NGO and a contributor to the collection, makes a case for providing basic services and technical assistance as a means to give an organisation the credibility required to advocate for more radical, structural change.
Perhaps the correct approach may be to let go of the idea that choices within the NGO sector are limited to either maintaining the status quo or pushing for a revolution.
Perhaps, as is the case with some of the most dynamic NGOs, workers need to operate in the cracks of the current system in ways that challenge injustice and open the door to new possibilities. Other actors, such as governments and social movements, have very important roles to play, but this doesn’t mean that NGOs can’t contribute to pushing for social justice in Africa.

The role of NGOs in Africa: are they a force for good?

Sophia Yan
Robots are likely to replace 50 percent of all jobs in the next decade, according to Kai-Fu Lee, founder of venture capital firm Sinovation Ventures and a top voice on tech in <a href="http://www.cnbc.com/china/" target="_self">China</a>.
Artificial intelligence (AI) is the wave of the future, the influential technologist told CNBC, calling it the &#8220;singular thing that will be larger than all of human tech revolutions added together, including electricity, [the] industrial revolution, internet, mobile internet — because AI is pervasive.&#8221;
<blockquote>&#8220;It is the decision engine that will replace people,&#8221; Lee said, adding that AI capabilities far exceed those of humanity.</blockquote>
For example, he said, companies in which his firm has invested can accomplish feats such as recognizing 3 million faces at the same time, or dispersing loans in eight seconds.
<blockquote>&#8220;These are things that are superhuman, and we think this will be in every industry, will probably replace 50 percent of human jobs, create a huge amount of wealth for mankind and wipe out poverty,&#8221; Lee said, later adding that he expected that displacement to occur in the next 10 years.</blockquote>
Lee&#8217;s views on technology are widely followed in part because he previously headed Google China before founding his venture capital firm. He has also held executive posts at many other major tech companies, including Apple and Microsoft, and he has celebrity status in the industry and in China — with millions of social media followers on multiple platforms.
Speaking with CNBC from the Global Mobile Internet Conference in Beijing, Lee tackled the big question: Will human still have a place in the world as machines grow more intelligent?
The answer, he said, is that nothing can replace human-to-human interaction.
&#8220;Touching one&#8217;s heart with your heart is something that machines, I believe, will never be good at,&#8221; he said, explaining that service jobs should be considered &#8220;first-class&#8221; employment.
And while all of this change is happening, traditional companies like banks, insurance firms and hospitals, are simply moving to slow, Lee said. And it&#8217;s too bad, he added, because they &#8220;possess the biggest treasure&#8221; in the form of troves of data.
&#8220;Because AI is about taking data into insight and decision, so I anticipate [the] internet sector, entrepreneurial sector, to continue to grow and in many cases displace and even wipe out traditional companies in China,&#8221; he said.
Chinese tech tycoons like <a class="inline_quotes" href="http://data.cnbc.com/quotes/700-HK" target="_self" data-gdsid="2284" data-inline-quote-symbol="700-HK">Tencent</a> and <a class="inline_quotes" href="http://data.cnbc.com/quotes/BABA" target="_self" data-gdsid="" data-inline-quote-symbol="BABA">Alibaba</a>, for instance, have forged the way in mobile payments — it&#8217;s become pervasive for consumers to pay for everything from rent to transportation through mobile wallets and transfers. Meanwhile, China&#8217;s giant state-owned banks are just barely starting to catch on, Lee said.

Artificial intelligence will replace half of all jobs in the next decade, says widely followed technologist

More diverse businesses perform better – it’s a fact. But building a diverse workforce in Africa is not just about ticking the gender and ethnic boxes – it’s about building synergy within diverse teams and cultivating diverse behaviour across the organisation.
Africa’s most sought-after employers are increasingly recognising that diversity is a key driver of performance, recent data has shown. Indeed, the business case for diversity is compelling with an increasing number of global studies, including recent research by McKinsey, demonstrating a clear link between greater diversity and better financial results.
Research conducted on HR policies, strategies and practices of Africa’s certified Top Employers reveals that the overwhelming majority of these companies follow recommended best practice guidelines for managing diversity. “This is crucial because managing diversity successfully is more than just ticking the boxes of ethnicity and gender,” says Billy Elliott, Country Manager: Africa for the Top Employers Institute.
“And when properly understood, diversity is not just black and white – it’s gold. It brings in more revenue, makes for happier customers, and ultimately builds more sustainable businesses.&#8221;
According to Elliott, organisations that want to reap the benefits of true diversity must go beyond scratching the surface. “Diversity is a theme companies need to embrace and integrate,” he explains. “It can’t be candy-coated. It’s about much more than what you look like.” A diverse workforce means diverse behaviour, says Elliott – which means employers must engage fully with making it work.
Based on data from the Top Employers Institute annual certification of HR best practice in Africa, Elliott says there are five key lessons in diversity management that can help to set companies apart:
<ul>
<li>Define and communicate your diversity programme </li>
</ul>
Eighty six per cent of Africa’s Top Employers have clearly defined and communicated an organisation-wide diversity programme. And 74% of Africa’s Top Employers ensure details of their diversity programme(s) are easily accessible via the intranet or handbooks.
For DHL Express, one of just 10 Global Top Employers and certified in 12 African countries, diversity is a core business imperative. The company relies on diverse teams for more creative problem solving. “We have a number of programmes that emphasise the need to continually develop a more diverse and inclusive workforce to help drive our business forward on the continent.” says Paul Clegg, Vice President Human Resources – Sub-Saharan Africa.
DHL Express has an unparalleled footprint in Africa, one of the most ethnically diverse continents in the world with 3000 distinct ethnic groups and 2000 languages. Elliott believes that Top Employers like DHL Express have a key role to play in facilitating diversity management in the workplace that can play in vital role in building social cohesion.
Legislation differs from country to country, but Clegg says irrespective of the minimum requirements, DHL Express, as a business, places great emphasis on employee engagement. Having motivated people is the first pillar of our global Focus strategy and being an Employer of Choice is 1 of our 3 bottom lines. This demonstrates how seriously we take employee engagement and development at a global level and on the ground in Sub Saharan Africa. We are fortunate to be the most international company in the world, which enables us to give our employees the very best learning and development opportunities. Our diverse network, which spans across 220 countries and territories, provides the opportunity for employees to learn and share experiences in different markets. The value of cross-country, on-the-job learning is immense.
<ul>
<li style="text-align: left;">Invest in diversity training</li>
</ul>
Eighty one per cent of Africa’s Top Employers have trained specific employee groups regarding relevant diversity practices to enable them to build an engaged workforce through authentic and inclusive employee engagement. According to the Global Human Capital Trends report 2015 from Deloitte University, employee engagement is a priority both for HR and for the business and plays a critical role in business performance.
According to Linda Ronnie, Senior Lecturer in HR at the University of Cape Town Graduate School of Business (GSB), employee engagement can provide explicit recognition of personhood which is key to success especially in African organisations where there are diverse cultural and personal needs in play and mutual understanding in the workplace cannot be taken for granted.
A central part of overcoming barriers within a large and diverse workforce such as DHL Express’ is getting everyone on the same page from the start, says Clegg. We have a global cultural change program called Certified International Specialist (CIS), which revolves around four attributes: Speed, Can-Do Attitude, Right First Time and Passion. Everyone from the Global CEO to our couriers have gone through this training programme which reinforces our core competencies. It’s a fully inclusive program which cuts across all diversity indicators and levels of occupation and we consider it to be an important driver of employee engagement and retention, and ultimately business performance.
<ul>
<li>Measure the results of your diversity programme</li>
</ul>
Around 70% of Africa’s Top Employers evaluate the impact and effectiveness of their diversity programme regularly.
According to Clegg, participation in the Top Employers Certification Programme is a crucial part of this measurement process. “The Top Employers Institute looks at how we are doing along a number of key metrics. This year, we are aiming to achieve certification in more countries across Sub Saharan Africa than before. A key Top Employer Institute benchmark is driving diversity in all areas.”
DHL Express and other Top Employers in Africa understand that what you measure is what you manage. And they are not alone. In the past few years tech giant Google has gone big on diversity investing $150 million into its own diversity programmes in 2015 alone and also setting up a dedicated diversity-related <a href="https://www.google.com/diversity/">page</a> designed to make its diversity statistics more public – and triggering other silicon valley companies to do the same.
In an interview with USA Today Nancy Lee, Google&#8217;s vice president of people operations, explained that the move was not about altruism. Google wants to secure its own future by establishing itself as a leader in diversity. &#8220;The tech industry really understands that the future of our industry means we have to be more inclusive,&#8221; Lee says. &#8220;We are literally building products for the world. It can&#8217;t be this homogeneous.&#8221;
<ul>
<li>Employ people from disadvantaged backgrounds</li>
</ul>
An impressive 80% of Africa’s Top Employers employ people from disadvantaged backgrounds. The latter refers to groups that do not have optimal chances in the labour market because of their socio-economic situation.
For global beverage company Pernod Ricard, which also has a strong footprint in Africa, current efforts are targeted specifically at increasing diversity at middle and senior management levels. “More than 75% of our external hires are equity hires, in line with our aim to reflect the demographic of the economically active population,” says Andre Muller, Head of Human Resources. “A major challenge in any organisation is getting people at all levels to buy into the concept of diversity and to live it on a day-to-day basis. As to what levels of success we have achieved, we believe this is an ongoing process.  We have set clear objectives and track and monitor our progress in key elements of diversity. Our employee turnover is low (around 6% per year) so we are doing some things right,” he says.
<ul>
<li>Education and age are diversity too </li>
</ul>
Just under 40% of Africa’s Top Employers ensure that they monitor and manage the differences in employees’ educational backgrounds. “Creating departments or teams with different educational backgrounds ensures a more diverse way of thinking,” says Elliott. “Employees can approach challenges with different perspectives.”
“A more uniform workforce has a more uniform and a less creative problem solving perspective,” agrees DHL’s Clegg.
Furthermore, says Elliott, over a quarter of African Top Employers have programmes in place to attract, engage and retain older people and 87% of them set out also to employ younger staff, driving greater age diversity.
This too is part of a global trend. A recent study by <a href="http://www.mcdonalds.co.uk/ukhome/Aboutus/Newsroom/news_pages/Bridging_The_Generation_Gap_Is_The_Key_To_A_Happier_Workforce.html">McDonald’s</a>, for example, found that age diversity made for a happier and more productive workforce. Employees reported that they were up to 10% happier working in a multi-generational environment and that this also resulted in improved customer satisfaction.
“The power of diversity in all its facets is a tremendous business advantage,” concludes Elliott. “It’s something we see gaining momentum in Top Employers across the continent. I believe that the Africa’s history and context has made employers here that much more attuned to the power and possibility of diversity.”

Lessons on why diversity isn’t black and white – it’s gold

By Chantel McGee
Add to the list of problems at Uber: Driver retention. Only 4 percent of people who sign up to drive for the ride-hailing service are still driving a year later, according to a report in <a class="inline_asset" title="https://www.theinformation.com/how-uber-will-combat-rising-driver-churn" href="https://www.theinformation.com/how-uber-will-combat-rising-driver-churn" target="_self">The Information.</a>
The company&#8217;s accelerating driver drop off rate is partially due to increased competition from companies like Lyft. But the number one complaint among Uber drivers is the pay, according to undisclosed data seen by The Information. Many Uber drivers have complained about unfair compensation for long trips, and not being able to accept tips.
An Uber spokesman told The Information: &#8220;We recognize we need to improve our relationship with drivers and their experience using Uber. We&#8217;re working on a range of improvements across our products, our policies, our customer support and how we communicate.&#8221;
The company is considering things like better targeting financial bonuses to certain drivers and allowing tipping, which could allow drivers to earn more, according to <a class="inline_asset" title="https://www.theinformation.com/how-uber-will-combat-rising-driver-churn" href="https://www.theinformation.com/how-uber-will-combat-rising-driver-churn" target="_self">The Information.</a> Lyft, its main competitor, already gives riders the option to leave a tip.
Read the entire <a class="inline_asset" title="https://www.theinformation.com/how-uber-will-combat-rising-driver-churn" href="https://www.theinformation.com/how-uber-will-combat-rising-driver-churn" target="_self">The Information</a> report.
&nbsp;

Only 4% of Uber drivers remain on the platform a year later, says report

Botswana is the most attractive economy for investments flowing into the African continent, according to the latest <a href="https://quantumglobalgroup.com/knowledge-hub/africa-investment-index/">Africa Investment Index 2016</a> by Quantum Global’s independent research arm, Quantum Global Research Lab.
According to the Index, Botswana, scores highly based on a range of factors that include improved credit rating, current account ratio, import cover and ease of doing business.
<blockquote>Commenting on the Index, Prof Mthuli Ncube, Head of Quantum Global Research Lab stated: “Despite considerable external challenges and the fall in oil prices, many of the African nations are demonstrating an increased willingness to achieve sustainable growth by diversifying their economies and introducing favourable policies to attract inward investments. Botswana is a case in example – its strategic location, skilled workforce and a politically stable environment have attracted the attention of international investors leading to a significant influx of FDI.”</blockquote>
According to the report, the top five African investment destinations attracted an overall FDI of $13.6bn. Morocco was ranked second on the Index based on its increasing solid economic growth, strategic geographic positioning, increased foreign direct investment, import cover ratio, and an overall favourable business environment. Egypt was ranked third due to an increased foreign direct investment and real interest rates, and a growing urban population. The fourth country on the list, South Africa, scored well on the growth factor of GDP, ease of doing business in the country and significant population. Whilst Zambia, was the fifth country on the list due to its significant domestic investment and access money supply.
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-120200" src="http://cnbc.africa/wp-content/uploads/2017/04/Capture.jpg" alt="" width="865" height="293" />
Mthuli further commented: “With a population of over one billion people and rapidly growing middle class, Africa clearly offers significant opportunities to invest in the continent’s non-commodities sectors such as financial services, construction and manufacturing amongst others. However, structural reforms and greater private sector involvement are crucial to unlocking Africa’s true potential.”
&nbsp;
Construction of the Index
The AII is constructed from macroeconomic and financial indicators and the World Bank Group’s Ease of Doing Business Indicators (DBI). The DBI ranks countries in terms of a regulatory environment conducive to business operation. The AII focuses on 6 pillars or factors from a wider range of investment indicators, which include the share of domestic investment in GDP, the share of Africa’s total FDI net inflow, GDP growth rate forecast, population augmented GDP growth factor, real interest rate, the difference of broad money growth to the GDP growth rates, inflation differential, credit rating, import cover, the share of the country’s external debt in its GNI, current account ratio, ease of doing business and the country’s population size (Figure 1). The AII indicators are based on secondary data collected from World Bank Development Indicators, IMF World Economic Outlook, UNCTAD Data Centre and own estimates.
The AII is a combination of individual indicator’s rank into a single numerical ranking. It averages the country’s macroeconomic and financial indicators rankings on the six different factors. Each indicator, and hence factors, receives an equal weight. Their rank score is then averaged to produce the total average score which is consequently ranked from 1 to 54. The lower the value of the ranking, the better the implied business investment climate.
To produce an index score that captures medium-term changing aspects, individual country’s ranking is scaled relative to a benchmark or reference value (i.e., the past 3-year rolling average ranking). See Table 1A. In addition to the intended measurement, this approach enables us to avoid periods of structural changes (which may compromise the index) that may be present in a longer time span, whether we consider a change from a reference average value or a historical reference period.
For full report: <a href="https://quantumglobalgroup.com/knowledge-hub/africa-investment-index/">Africa Investment Index 2016</a>

New index finds Botswana most attractive investment destination in Africa

There was a time that South Africa looked very different to the rest of Africa. The <a href="http://www.scholaradvisor.com/essay-examples/descriptive-essay-south-africa-rainbow-nation/">“rainbow nation”</a> was seen by many – including a lot of its own citizens – to be exceptional, having more in common with the developed states of Europe than some of the countries on its own doorstep.
But, in the wake of a series of destabilising <a href="https://mg.co.za/report/zumaville-a-special-report">corruption scandals</a>, financial mismanagement and the incompetent leadership of <a href="https://theconversation.com/why-zumas-actions-point-to-shambolic-management-of-south-africas-economy-52174">President Jacob Zuma</a>, this is no longer the case.
It’s time therefore to look to the rest of the continent for evidence on how the <a href="https://mg.co.za/tag/anc-crisis">crisis</a> within the country’s ruling African National Congress <a href="http://www.anc.org.za/">(ANC)</a> is likely to unfold.
The notion of <a href="http://www.politik.uni-osnabrueck.de/POLSYS/Archive/czada%20sa%20exceptionalism.pdf">South African exceptionalism</a> runs deep. Having suffered white minority rule much longer than most other African states, the country had one of the most stable and <a href="http://overcomingapartheid.msu.edu/unit.php?id=65-24E-6">successful transitions</a> to democracy on the continent. Following the election of the ANC in 1994, Nelson Mandela’s government promoted <a href="http://www.anc.org.za/content/1994-national-elections-manifesto">tolerance and responsible</a> government.
At that point, South Africa did not look very “African”. While Nigeria was blighted by <a href="http://www.unh.edu/nigerianstudies/articles/Issue2/Political_leadership.pdf">endemic corruption</a>, the ANC was led by a man whose <a href="http://www.aljazeera.com/news/africa/2012/12/20121211124815790365.html">reputation</a> was beyond reproach. When the ZANU-PF government was becoming increasingly brutal in <a href="https://theconversation.com/why-mugabes-latest-challenger-will-find-it-hard-to-break-the-mould-57587">Zimbabwe </a>, Mandela’s administration was promoting the rule of law and inclusion. And just as the Democratic Republic of Congo, Rwanda and Somalia were falling apart, the South African state appeared to be growing stronger.
Moreover, the notion of exceptionalism wasn’t just something dreamt up by academics or reporters: it was also deeply felt by South Africans themselves. <a href="http://www.tandfonline.com/doi/full/10.1080/02589001.2015.1122870?src=recsys">Some surveys</a> have found that many believe that they are exceptional, and in some cases that they are superior to the rest of the continent. This had some positive consequences, most notably by supporting the reconstruction of a broader national identity.
But it also had its downsides. A <a href="http://www.hsrc.ac.za/en/research-data/ktree-doc/6253">report</a> by the country’s Human Science Research Council into the xenophobic violence against migrants from Mozambique, Malawi, and Zimbabwe in 2008 concluded that, in addition to urban deprivation and intense competition for jobs and housing, a popular understanding of “exclusive citizenship” motivated anti-foreigner sentiment.
The xenophobic violence, and the economic conditions that gave rise to it, were a clue – for those who had their eyes open – that South Africa wasn’t really that exceptional after all.
On the one hand, a number of other countries such as <a href="http://www.nation.co.ke/oped/Opinion/Africa-Democracy-Politics-Research/440808-2808336-xorq81/index.html">Ghana and Mauritius</a> were also doing well when it came to consolidating democracy. It was just that these positive stories tended to be ignored.
On the other, some aspects of the South African “miracle” didn’t stand up to closer scrutiny.
Before and after Zuma
After the transition to majority rule the country recorded impressive achievements in terms of its progressive <a href="http://www.gov.za/DOCUMENTS/CONSTITUTION/constitution-republic-south-africa-1996-1">constitution</a> and growing welfare state. But at the same time it soon became clear that many parts of the bureaucracy were prone to rent seeking behaviour.
Similarly, despite its proud history and impressive first four years in office, the ANC was already exhibiting patrimonial tendencies well before Zuma became president in 2009.
As political scientist Tom Lodge <a href="https://www.google.co.uk/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwiWk6zSt4_TAhUhIcAKHdUdAm8QFggdMAA&amp;url=http%3A%2F%2Fafraf.oxfordjournals.org%2Fcontent%2F113%2F450%2F1.abstract&amp;usg=AFQjCNEkiFPoCLAdxHH2KirJhUuuolDt1A&amp;bvm=bv.151426398,d.d24">has argued</a>, many of those who rose to prominence in the movement during the apartheid era had been born into privileged positions. And the ANC was forced to develop ties to <a href="https://academic.oup.com/afraf/article/113/450/1/48437/Neo-patrimonial-politics-in-the-ANC">criminal networks</a> to operate after it was banned by the National Party in <a href="http://www.sahistory.org.za/topic/african-national-congress-timeline-1960-1969">1960 </a>and forced into exile.
During the liberation struggle, the imperative of fighting the apartheid regime kept these patrimonial tendencies and criminal connections in check. But after the advent of democracy they started to become more pronounced.
Partly as a result, schemes such as <a href="http://www.dti.gov.za/economic_empowerment/bee.jsp">Black Economic Empowerment</a> were used not transform the underlying structure of the economy, but to generate opportunities for self-enrichment. South African political analyst Moeletsi Mbeki has called this <a href="http://africanarguments.org/2012/09/13/moeletsi-mbeki-on-south-africa-%E2%80%9Cblack-economic-empowerment-is-legalised-corruption-%E2%80%9D-%E2%80%93-by-magnus-taylor/">“legalised corruption”</a>.
These tendencies were then exacerbated by Zuma’s rise to power, in large part because he’s a leader that understands politics through a patrimonial lens. Lacking the intellect and management skill to lead by example, he has set about entrenching himself in power by <a href="http://www.dw.com/en/face-off-between-zuma-loyalists-and-critics-at-anc-headquarters/a-19528070">promoting loyalists</a> within the party and the state. This while condoning corruption and sacrificing policy for patronage. As a result, the party’s patrimonial tendencies have been sent into overdrive.
In addition to major corruption scandals over the upgrade to his <a href="http://www.iol.co.za/news/crime-courts/nkandla-corruption-exposed-1607427">Nkandla home</a> and a multi-billion dollar <a href="http://www.corruptionwatch.org.za/the-arms-deal-what-you-need-to-know-2/">arms deal</a>, Zuma has drawn fire for his close relationship to <a href="https://www.google.co.uk/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwi1yOOZuY_TAhVJKMAKHQnlDngQFggcMAA&amp;url=http%3A%2F%2Fwww.bbc.co.uk%2Fnews%2Fworld-africa-22513410&amp;usg=AFQjCNEv1Od9prhAbBfH8qaCfrNt19-P2w&amp;bvm=bv.151426398,d.d24">the Gupta family</a>. He allegedly allows the family to influence major policy decisions in return for its financial support.
More recently, the president plunged the ANC into a full-blown crisis by removing many of the most competent members of the cabinet and replacing them with <a href="https://www.businesslive.co.za/fm/fm-fox/2017-03-30-gigaba-new-finance-minister-in-cabinet-bloodbath/">loyalists</a>. As a result, South Africa’s credit rating has been <a href="http://www.fin24.com/Economy/breaking-fitch-downgrades-sa-to-junk-status-20170407">downgraded</a>.
For many, this was the straw that broke the camel’s back. In the days that followed, a number of prominent political <a href="http://www.timeslive.co.za/politics/2017/03/31/Save-South-Africa-calls-for-protest-after-Cabinet-reshuffle1">figures</a> and the ANC’s partners in the triple alliance, the South African Communist Party and the Congress of South African Trade Unions (Cosatu), <a href="http://www.timeslive.co.za/politics/2017/04/04/BREAKING-Cosatu-calls-on-Zuma-to-step-down">called on Zuma to go.</a>
Lessons from elsewhere
Putting this process in its historical context is important: it makes it clear that while Zuma has been a disaster, it would be naïve to think that he is the sole source of the ANC’s problems – or that his removal will solve them. It also shows that South Africa is not exceptional, and instead faces similar problems to many other countries on the continent.
One small silver lining to this cloud is that we can use the experience of other states to better understand the prospects for South Africa. One thing we know from Kenya and Nigeria is that the kind of politics practised by the president <a href="https://www.google.co.uk/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwiDiJHKuY_TAhVsAcAKHWyVBwQQFggfMAA&amp;url=http%3A%2F%2Fwww.vanguardngr.com%2F2017%2F01%2Fcorruption-cases-nigeria-embedded-budgetary-process%2F&amp;usg=AFQjCNHax2IiuZMwgoSzPnMXsAJnP_IBFQ&amp;bvm=bv.151426398,d.d24">quickly embeds clientelism</a> within key parts of the government and bureaucracy.
When this happens, it’s not enough to change just the president. Meaningful reform requires the removal, or at the very least retraining, of an entire tranche of figures put in place during the president’s tenure. Otherwise, patterns of patronage and clientelism have a way of reasserting themselves.
The experience of other states also tells us that some of the solutions that have been promoted as silver bullet solutions for South Africa’s predicament are unlikely to work. It’s been suggested that the direct election of the president (who at present is <a href="https://www.quora.com/Why-are-there-no-presidential-elections-in-South-Africa">elected by the parliament</a> would lead to more accountable and responsible government. But America just directly elected <a href="https://www.nytimes.com/2016/11/09/us/politics/hillary-clinton-donald-trump-president.html?_r=0">Donald Trump</a>, while Zimbabwe continues to directly elect <a href="https://theconversation.com/how-are-elections-really-rigged-mr-trump-consult-robert-mugabe-68440">Robert Mugabe</a>. Presidential elections are no panacea.
The lesson from other African countries is therefore a worrying one: the road back is a long one.
Distinctive features remain
But these comparisons shouldn’t lead to defeatism. There are a number of ways in which the country remains distinctive. Civil society remains more robust than in many other states, and more independent as the Confederation of South African Trade Union’s criticism of Zuma demonstrates.
Similarly, the <a href="http://www.sabc.co.za/news/a/388736004c4223ab9542b5f68d25dd2f/SAs-judiciary-continues-to-lead-by-example-in-Africa:-Pillay">judiciary</a> tends to be both of higher quality and more impartial, while the governing ANC itself has <a href="https://www.amazon.co.uk/d/Books/Thabo-Mbeki-Battle-Soul-ANC/184277848X">more internal checks and balances</a> than most governments on the continent.
These features didn’t prevent the slide towards patrimonialism, and on their own they will not topple Zuma. But they are the foundations on which the struggle for a new South Africa can be fought.

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