Wednesday, March 30, 2011
fiscal austerity policy in Africa
Now that the West has tasted its own bitter pills of deficit reduction by way of economic austerity measures, are they going to revise their one-size fits all economic prescription to Africa?
Wednesday, March 23, 2011
Africa Union Indifference to Libya
The AU is unsurprisingly critical of the ongoing establishment and enforcement of No-Fly-Zone by the international community. Needless to say in asmuchas Libya's sovereignty ought to be respected, this Gadhafi guy has abrogated the very tenet of the social contract he derives his sovereinty from.
Monday, March 21, 2011
e-governance in Africa
Reflecting over twitter's 5th birthday makes me wonder how much (if any) African politicians have embraced this incredible first-person mode of communication. The beauty of twitter is that no message is lost in translation--what you want your followers to hear is what you write yourself. I would imagine our leaders adapting to the language of the so-called Facebook Generation sooner before the tide turns on them.
Thursday, March 17, 2011
Still on Libya
how in the world can russia and china justify an intervention in libya? the un security council clearly needs a reform
Monday, March 14, 2011
Media
It seems to me the media is impaired by unidimentional syndrome. Can't we talk about Japan, Libya and Ivory Coast at the same time
Sunday, March 13, 2011
Great Article By NY Times: To Help Africa, Sell Bonds
Homeward Bond
By NGOZI OKONJO-IWEALA and DILIP RATHA
Published: March 11, 2011
Otto Dettmer
In other words, Africa needs not only greater investment in agriculture, but also in roads, ports and other facilities that are vital to moving the land’s products to consumers. Fortunately, part of the solution could lie with the almost 23 million African migrants around the globe, who together have an annual savings of more than $30 billion. Tapping into this money with so-called diaspora bonds could help provide Africa with the equipment and services it needs for long-term growth and poverty reduction.
These diaspora bonds would be in essence structured like any bonds on the market, but would be sold by governments, private companies and public-private partnerships to Africans living abroad. The bonds would be sold in small denominations, from $100 to $10,000, to individual investors or, in larger denominations, to institutional and foreign investors.
Preliminary estimates suggest that sub-Saharan African countries (excluding South Africa, which doesn’t have significant emigration) could raise $5 billion to $10 billion a year through diaspora bonds. Countries like Ghana, Kenya and Zambia, which have fairly large numbers of migrants living abroad in high-income countries, would particularly profit from issuing diaspora bonds.
There are precedents for such moves. Greece announced this week that it was preparing to issue $3 billion worth of diaspora bonds in the United States. India and Israel have issued diaspora bonds in the past, raising over $35 billion, often in times of financial crises.
Why would diaspora bonds work so well? For one thing, the idea taps into emigrants’ continuing patriotism and desire to give back to their home countries. And because diaspora populations often build strong webs of churches, community groups and newspapers, bond issuers would be able to tap into a ready-made marketing network.
Another advantage of diaspora bonds for African countries is that migrants make more stable investors in their home countries than people without local knowledge. They’re less likely to pull out at the first sign of trouble. And they wouldn’t demand the same high rate of interest as a foreign investor, who wants to compensate for the risk of investing in what would seem to them like a relatively unknown developing country.
Diaspora bonds could also be issued in the local currency, as migrants are likely to be less averse to the risk of currency devaluation. That’s because members of the diaspora have more use for local currency than foreign investors; migrants can always use it when they go back home or for family-related expenses.
Take, for example, an African living in the United States who now earns an annual interest rate of less than 1 percent on small deposits; a diaspora bond with an interest rate of about 5 percent certainly might seem attractive. To make the bond even more appealing, the countries the migrants reside in could provide tax breaks on interest income. Donor or multilateral aid agencies could also offer credit enhancements in the form of partial guarantees, to mitigate default risks.
Even more money could flow into Africa if countries tapped into the billions of dollars that members of the diaspora send home each year by using those remittances as collateral to raise financing from international markets. This approach has allowed banks in several developing countries — including Brazil, Egypt, El Salvador, Guatemala, Kazakhstan, Mexico and Turkey — to raise more than $15 billion since 2000.
Here’s how this works: When a migrant transfers foreign currency to a relative’s creditworthy bank in his home country, the bank pays out the remittance from its holding of local currency. That transaction creates a foreign currency asset equivalent to the size of the remittance, which can be used as collateral for borrowing cheaply and over the long term in overseas capital markets.
Such borrowing has no effect on the flow of money from migrants to their beneficiaries. Yet development banks, national banks in developing countries and donor agencies can partner to harness enough remittances and create enough collateral to raise significant sums of money to invest in agriculture, roads, housing and other vital projects.
The people of Africa are scattered around the globe, but many still feel a powerful sense of belonging to the continent. Through diaspora bonds and remittances, they could create a better future for their homeland.
These diaspora bonds would be in essence structured like any bonds on the market, but would be sold by governments, private companies and public-private partnerships to Africans living abroad. The bonds would be sold in small denominations, from $100 to $10,000, to individual investors or, in larger denominations, to institutional and foreign investors.
Preliminary estimates suggest that sub-Saharan African countries (excluding South Africa, which doesn’t have significant emigration) could raise $5 billion to $10 billion a year through diaspora bonds. Countries like Ghana, Kenya and Zambia, which have fairly large numbers of migrants living abroad in high-income countries, would particularly profit from issuing diaspora bonds.
There are precedents for such moves. Greece announced this week that it was preparing to issue $3 billion worth of diaspora bonds in the United States. India and Israel have issued diaspora bonds in the past, raising over $35 billion, often in times of financial crises.
Why would diaspora bonds work so well? For one thing, the idea taps into emigrants’ continuing patriotism and desire to give back to their home countries. And because diaspora populations often build strong webs of churches, community groups and newspapers, bond issuers would be able to tap into a ready-made marketing network.
Another advantage of diaspora bonds for African countries is that migrants make more stable investors in their home countries than people without local knowledge. They’re less likely to pull out at the first sign of trouble. And they wouldn’t demand the same high rate of interest as a foreign investor, who wants to compensate for the risk of investing in what would seem to them like a relatively unknown developing country.
Diaspora bonds could also be issued in the local currency, as migrants are likely to be less averse to the risk of currency devaluation. That’s because members of the diaspora have more use for local currency than foreign investors; migrants can always use it when they go back home or for family-related expenses.
Take, for example, an African living in the United States who now earns an annual interest rate of less than 1 percent on small deposits; a diaspora bond with an interest rate of about 5 percent certainly might seem attractive. To make the bond even more appealing, the countries the migrants reside in could provide tax breaks on interest income. Donor or multilateral aid agencies could also offer credit enhancements in the form of partial guarantees, to mitigate default risks.
Even more money could flow into Africa if countries tapped into the billions of dollars that members of the diaspora send home each year by using those remittances as collateral to raise financing from international markets. This approach has allowed banks in several developing countries — including Brazil, Egypt, El Salvador, Guatemala, Kazakhstan, Mexico and Turkey — to raise more than $15 billion since 2000.
Here’s how this works: When a migrant transfers foreign currency to a relative’s creditworthy bank in his home country, the bank pays out the remittance from its holding of local currency. That transaction creates a foreign currency asset equivalent to the size of the remittance, which can be used as collateral for borrowing cheaply and over the long term in overseas capital markets.
Such borrowing has no effect on the flow of money from migrants to their beneficiaries. Yet development banks, national banks in developing countries and donor agencies can partner to harness enough remittances and create enough collateral to raise significant sums of money to invest in agriculture, roads, housing and other vital projects.
The people of Africa are scattered around the globe, but many still feel a powerful sense of belonging to the continent. Through diaspora bonds and remittances, they could create a better future for their homeland.
Friday, March 11, 2011
Wednesday, March 9, 2011
How Recession is impacting immigrants
Studies have demonstrated disproportionate unemployment rate across racial line in the US. Yet little has been said about how immigrants are coping with the recession. It is about time data is collected to show how the American dream is eluding hardworking immigrants! Is there an initiative somewhere that someone can brief me on?
Tuesday, March 8, 2011
Unrest in Ivory Coast
The political unrest in the world largest cocoa exporting country appears to be getting nastier by the turn of the day. What does it take for the suffering of innocent civilians to get the same traction as Egypt and Libya? Mind you, Ivory Coast may not have oil, but experts say your Delicious chocolate may experience a price hike soon. West Africa's next madman (Mr. Gbagbo) must be shown the exit by any means.
Monday, March 7, 2011
Happy Independence Day Ghana!!
Congratulations to all Ghanaians on this gracious inde day! We should all be proud of our country. There is so much hope for the future of Mother Ghana. Lets all keep doing our best to better the world.
Sunday, March 6, 2011
AU Must Act Now
The African Union, an organization which ironically positioned Colonel Qaddafi as one of its power players, must flex some muscles to halt the atrocities against innocent Libyan citizens by this madman!
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