Headline August 25, 2016/ ''' AFRICAN OPPORTUNITIES : * FOUR SEASONS * ''''



BUYING ON CREDIT IS JUST SO NICE -as these South Africans love to splash out. But many,  -just too many, are living beyond their means.

A queue snaked through the first  Starbucks  shop south of the Sahara, winding out of the door and way down the block. It greeted the American coffee chain's boss, Howard Schultz, when he visited the Johannesburg store for the first time recently.

''I have been to many, many Starbucks openings around the world,'' Mr. Schultz marvelled. '' I have never seen a line like this after a week of our opening.''

Few of the South Africans shuffling in line had ever tasted  Starbucks, but they felt sure it was worth the hour-long wait. ''Celebrities are always drinking it,'' said  Lebo Nkosi, 26, a shop assistant at a nearby mall, as she waited with her student friends.  

AND THEN, THERE ARE MANY, many reasons why Africa has failed to produce many profitable small firms,  never mind larger ones-

*But high among them is access to finance*.

''There is a myth out there that every good idea can find funding,'' says Goolam Ballim, the chief economist of South Africa's Standard Bank. ''But in Africa that simply isn't true.''

For a start banks in many African countries serve mainly to take savings and channel them into the hands of government rather than entrepreneurs, since treasury bills often pay juicy rates of interest.

Government borrowing drives up interest rates for everybody else. [in much of east and west Africa, for instance, people have to pay eye watering interest rates of  20 to 45%.]  

The easy profits from lending to the state also make banks lazy. Many do not bother to learn how to measure and manage the risks lending to businesses when they can simply hold government paper.

This is beginning to change, thanks largely spread of mobile phones, which is allowing for new ways of lending cheaply.

Take Letshego, a  Botswana based microlender with operations in nine other African countries. It signs up customers using their mobile phones and run its entire operations from a  Data centre in South Africa-

Giving it a cost-to-income ratio to standard measure of efficiency in banking] that is about half that of traditional banks.

Lenders are also experimenting with new ways of measuring how risky borrowers are using data from their phones. One discovered that customers who also listed contacts by name and surname were 16% less  likely to default.

Even if entrepreneurs get access to finance, it is difficult for them to make and sell things.

Ashish Thakkar, an African entrepreneur and a philanthropist, says that shortages of electricity,  potholed roads and inefficient ports and railways hold back manufacturers.

''If some  making shoes in Port Harcourt can't even get them to Lagos [both are cities in Nigeria]  then forget about them going global.''

Yet that too may change as  governments and investors channel huge investments into infrastructure and power.

TradeMark East Africa, an NGO funded largely by western governments  to encourage trade, reckons that improvements in Kenya's  ports and roads have cut by about  60%  the time it takes to ship a container from the port of Mombasa to Kampala, the capital of Uganda, lowering costs too.

Access to markets is not simply about physical infrastructure , but also about social networks.

In many parts of the continent  there are so few successful companies that would-be entrepreneurs seldom see inspiring examples or have trusted friends in business to turn to for advice or support as suppliers or customers.

Where such networks exist,  for example among the Lebanese expatriates in west Africa or Asians in east Africa, business often flourishes.

Yet even where they don't, they can sometimes be replicated using technology.

*Cherie Blair*  a lawyer married to a former British prime minister, has a foundation that helps teach women to run their own businesses. Some, she says, have done so for years but still do not know how to read a balance sheet-

So she connects them with one another and with mentors abroad using an online platform. 

The Honour and Serving of the  operational research on  ''Students and Opportunities''  continues. Thank Ya all for reading and sharing forward and see you on the following one:

With respectful dedication to the Leaders, Students, Professors and Teachers of sub-Saharan Africa. See Ya all on !WOW!  -the World Students Society and  !E-WOW!   -the Ecosystem 2011:

''' Worth It '''

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless


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