Africa's entrepreneurs and SMEs will catalyze economic growth in 2015
I suspect that a number of people still see Africa conforming to a well-rehearsed stereotype of a continent destined to never overcome the challenges it faces. However, this is not a view shared by us, and indeed there is much cause for optimism.
While there are still many serious problems facing some African countries, the continent has been one of the world’s fastest growing regions for the last decade. Governance has improved and greater political stability has led to a series of peaceful transitions following democratic elections — all at a time when its lucrative natural resources industries have been buoyant, but there is potential for much more.
Africa is still a young continent, whose peoples will make up almost a quarter of the world’s population by 2040. Africa will have the fastest growing working age population within the next 25 years, and will add the most workers to the world’s labour force. Greater life expectancy is a challenge for African governments, but it is also a great opportunity for fast-thinking entrepreneurs who find ways to fill the gaps in services the authorities aren’t able to provide.
With a growing middle-class and working age population, Africa is going to have to rely on small businesses to provide a large percentage of employment and job creation going forward.
Creating an environment that fosters entrepreneurial activity and supports small businesses is an important driver of growth. Small and medium sized enterprises account for more than 95% of all firms in Sub-Saharan Africa. In many countries, small and medium sized enterprises contribute more than 50% of gross domestic product and employment.
Current indicators of the entrepreneurial landscape are generally positive. Among ‘factor-driven’ economies, sub-Saharan Africa is the region with the highest rate of people involved in early-stage entrepreneurial activity, with Nigeria and Zambia leading the world rankings in 2013. The continent also leads the world in the number of women starting businesses. Yet with large state employers, bureaucracy and a tradition of dependence on foreign aid commonplace in many countries, the challenges entrepreneurs face are significant and there is much that needs to be done to encourage and support SMEs.
Entrepreneurs need an environment where they can be satisfied that they have the opportunity for their efforts to be rewarded appropriately and fairly, and that these rewards would be available for themselves and their families to enjoy in the future. This is often not the case in Africa, and there are many indicators that demonstrate the continent falls short relative to the rest of the world in this area. For example, it can be difficult to set up a business in Africa, with one of the reasons being firms do not have access to credit due to financial markets not having the breadth or depth of those in the developed world. Moreover, investors may not feel as protected as they would in countries with a more robust regulatory environment.
Jersey can encourage entrepreneurship, by providing a secure jurisdiction to protect the wealth generated to help investors and entrepreneurs keep their assets safe and secure, and by delivering robust business administration and support functions that all stakeholders can trust.
The Island provides specialised cross-border banking, wealth management, investment and legal services against a background of sound, stable and mature government and judiciary. In an increasingly globalised world, there is growing demand for secure and efficient multinational transactions. This is particularly important for individuals and companies who are conducting business in unstable and risky countries with weak legal systems, poorly defined or enforced property rights, corruption or political instability.
Along with other robust international financial centres, Jersey has a role to play in helping African nations access the investment funds they need and establish environments conducive to greater entrepreneurship and job creation. Part of the sterling-zone and with centuries of sound government, effective independent law-making and globally respected courts, the crown dependency provides a safe business environment for those either with existing investments in Africa or looking to make investments in the continent. Its tax neutrality makes it an ideal location for the efficient pooling of funds from investors across the globe.
Jersey has also had contact with the African Tax Administration Forum, which we hope will support capacity building and knowledge transfer particularly around governance structures and information exchange. In addition, Jersey has a longstanding relationship with the Commonwealth of Nations through the United Kingdom, and participate in various Commonwealth institutions such as the Commonwealth Parliamentary Association.
Africa’s SME industry holds huge potential to generate growth, create employment and build wealth across the continent. Jersey, and other international financial centres, has the expertise and experience to provide practical support to those driving Africa’s economy forward.
G7 Summit guide: What it is and what leaders hope to achieve
Unless you’ve had your head buried in the sand, you’ll have seen the term ‘G7’ plastered all over the Internet this week. We’re going to give you the skinny on exactly what the G7 is and what its purpose on this planet is ─ and whether it’s a good or a bad collaboration.
Who are the G7?
The Group of Seven, or ‘G7’, may sound like a collective of pirate lords from a certain Disney smash-hit, but in reality, it’s a group of the world’s seven largest “advanced” economies ─ the powerhouses of the world, if you like.
The merry band comprises:
- The United Kingdom
- The United States
Historically, Russia was a member of the then-called ‘G8’ but found itself excluded after their ever-so-slightly illegal takeover of Crimea back in 2014.
Since 1977, the European Union has also been involved in some capacity with the G7 Summit. The Union is not recognised as an official member, but gradually, as with all Europe-linked affairs, the Union has integrated itself into the conversation and is now included in all political discussions on the annual summit agenda.
When was the ‘G’ formed?
Back in 1975, when the world was reeling from its very first oil shock and the subsequent financial fallout that came with it, the heads of state and government from six of the leading industrial countries had a face-to-face meeting at the Chateau de Rambouillet to discuss the global economy, its trajectory, and what they could do to address the economic turmoil that reared its ugly head throughout the 70s.
Why does the G7 exist?
At this very first summit ─ the ‘G6’ summit ─, the leaders adopted a 15-point communiqué, the Declaration of Rambouillet, and agreed to continuously meet once a year moving forward to address the problems of the day, with a rotating Presidency. One year later, Canada was welcomed into the fold, and the ‘G6’ became seven and has remained so ever since ─ Russia’s inclusion and exclusion not counted.
The group, as previously mentioned, was born in the looming shadow of a financial crisis, but its purpose is more significant than just economics. When leaders from the group meet, they discuss and exchange ideas on a broad range of issues, including injustice around the world, geopolitical matters, security, and sustainability.
It’s worth noting that, while the G7 may be made up of mighty nations, the bloc is an informal one. So, although it is considered an important annual event, declarations made during the summit are not legally binding. That said, they are still very influential and worth taking note of because it indicates the ambitions and outlines the initiatives of these particularly prominent leading nations.
Where is the 2021 G7 summit?
This year, the summit will be held in the United Kingdom deep in the southwest of England, with Prime Minister Boris Johnson hosting his contemporaries in the quaint Cornish resort of Carbis Bay near St Ives in Cornwall.
What will be discussed this year?
After almost two years of remote communication, this will be the first in-person G7 summit since the novel Coronavirus first took hold of the globe, and Britain wants “leaders to seize the opportunity to build back better from coronavirus, uniting to make the future fairer, greener, and more prosperous.”
The three-day summit, running from Friday to Sunday, will see the seven leaders discussing a whole host of shared challenges, ranging from the pandemic and vaccine development and distribution to the ongoing global fight against climate change through the implementation of sustainable norms and values.
According to the UK government, the attendees will also be taking a look at “ensuring that people everywhere can benefit from open trade, technological change, and scientific discovery.”