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Voice of Belady
06-07-2025
- Politics
- Voice of Belady
The passing of the global order
Mahmoud Mohieldin How should the countries of the Global South react to the ongoing changes in the international order? Those most aware of the end of the so-called global order are its own architects. They are like the owner of a football club who invites other teams to play on a field of his own design. He also hires a referee who is told to implement rules that he has designed as well. The teams play match after match, which always end with the victory of the owner's team, because its members know the pitch better and the rules work in their favour. However, then the other teams grow more familiar with the terrain, master the rules, and begin to win some matches. Initially, the owner doesn't mind, as long as he retains the upper hand. But when the competition gets tough and he can no longer ensure victory, he grabs the ball and leaves. These new outcomes were never my intention, he shouts, as he fires the referee, obliterates the lines on the field, tears up the rules, and makes up new ones that ensure his team comes out on top again. Of course, the real world is much more complex than this example might have us believe. One main difference is that the other teams in the game of nations are not about to wait for the master of the old order to bestow on them a new one that has been rigged in his favour. Instead, they will pursue alternative and more equitable arrangements to facilitate trade and investment and to settle any disputes that arise. At the same time, they will try to contain the anger of the owner of the formerly dominant team. They have too much to lose from his attempts to perpetuate his hegemony by creating friction and lashing out against all and sundry with combinations of soft and hard power, while imagining he is clever enough to avoid getting burned by his own ruses. While we are on the subject of the use of power in international relations, let's turn to an article by the late Harvard professor Joseph Nye published just days before his death in the April edition of the journal African Economy. Writing on 'The Future of World Order,' Nye noted how the end of the Cold War in 1991 had given rise to a unipolar world order that allowed for the strengthening of existing international institutions and agreements and the creation of new ones affirming a rules-based approach to the management of international relations. In the role of referees in the global game were the Bretton Woods institutions the International Monetary Fund (IMF) and the World Bank, the World Trade Organisation (WTO), and the UN Framework Convention on Climate Change, among others. However, Nye writes, 'even before Trump, some analysts believed that this American order was coming to an end. The twenty-first century had brought another shift in the distribution of power, usually described as the rise (or more accurately, the recovery) of Asia.' Asia's gains have come more at the expense of Europe than the US, which still represents a quarter of global GDP, as it has since the 1970s, Nye writes. While the Chinese economy has grown considerably, it has not yet surpassed its US rival, and while the Chinese defence industry has progressed by leaps and bounds, China still lags behind the US in overall military weight, alliances, and technology. However, the crucial point with which Nye concludes his article, which draws on both his academic expertise and his experience as a former US assistant secretary of defence, is that 'if the international order is eroding, America's domestic politics are as much of a cause as China's rise.' He leaves readers with the open question as to 'whether we are entering a whole new period of American decline' triggered by the current Trump administration's attacks on the country's institutions and alliances, or whether the current situation 'will prove to be another cyclical dip' from which the US will recover after it hits rock bottom. He suggests that we may not know the answer to this before a new president takes office in 2029. Fate did not grant Nye the chance to see what a post-Trump presidency might look like. However, I doubt the rest of the world will hold its breath until US voters cast their ballots depending on whatever the American mood is at the time. In the interim, we can expect more tit-for-tat in the ongoing global tariff skirmishes. The latest round of these was kicked off on 2 April by the blanket unilateral tariff hikes US President Donald Trump declared on what he called 'Liberation Day.' It ended on 9 April – 'Freeze Day' – when he suspended those tariffs for 90 days because the international financial markets had been severely rocked by the escalating trade war. Since then, various parties have been trying to work out better trade agreements with the US or at least terms that are not as bad as they could have been. The UK managed to strike such a deal, and the European Union is working on one. As for the countries of the Global South, such as the Arab and African nations, perhaps they will heed the advice to increase the added value of their sources of natural and mineral wealth by processing them domestically instead of persisting with the low-yield trade relations based on exporting raw materials and primary goods. They could achieve the desired shift by encouraging companies to invest in domestic manufacturing activities. Working in favour of this is the US' rush to secure critical raw materials for its advanced technological industries, particularly given how China has already made inroads into sourcing such materials, especially in Africa. On precisely this point, economists Vera Songwe and Witney Schneidman believe that the US, in its new trade agreements with Africa, should prioritise opportunities to increase manufacturing partnerships in order to compete with China, which has had a head start in the continent. More important than the foregoing is how the countries of the Global South, having recognised the collapse of the old order, manage the process of development and progress by focusing on people, economic diversification, digital transformation, investment facilitation, and data revolution.
Zawya
27-06-2025
- Business
- Zawya
CORRECTION: New Study Shows the Coca-Cola System has an Economic Impact of $10.4 Billion Across its Value Chain in Africa, Supporting More Than 1 Million Jobs
Across 54 African markets, The Coca-Cola Company and its authorized bottlers, collectively known as the Coca-Cola system, contributed $10.4 billion in economic activity across its value chain in 2024. The Coca-Cola system and its value chain supported more than 1 million jobs in retail, agriculture, manufacturing, transport and services in Africa. The Coca-Cola system purchased $4.3 billion from suppliers in Africa in 2024, representing 83% of the system's total procurement on the continent. The Coca-Cola Company ( announced the results of a comprehensive, Africa-wide socio-economic impact study during the 2025 U.S.-Africa Business Summit in Luanda, Angola. The study shows that the Coca-Cola system, made up of The Coca-Cola Company and its authorized bottlers, working with a wide network of suppliers, manufacturers, service providers and customers, contributed $10.4 billion in value-added economic activity across its value chain in Africa in 2024. The Coca-Cola system supported more than 1 million jobs across its value chain on the continent in sectors like retail, agriculture, manufacturing, transport and services. This included 36,800 direct Coca-Cola system jobs, plus 987,000 indirect jobs that are supported across the value chain, meaning the system collectively supported 27 additional jobs for every job it directly creates. The study, conducted by global consultancy Steward Redqueen, shows that the system invested $4.3 billion in the African economy in 2024 through the purchase of goods and services from local suppliers, representing 83% of its total procurement. 'Our long-standing presence in Africa, working with locally owned bottlers and suppliers, allows us to drive more sustainable growth and contribute to the continent's development,' said Luisa Ortega, president of the Africa operating unit of The Coca-Cola Company. 'Our unique operating model allows us to make a lasting impact in local communities.' The company's portfolio in Africa includes a wide range of brands in several beverage categories. Ingredients and packaging used by the Coca-Cola system in Africa are mostly locally sourced, supplied, produced, manufactured and distributed. 'The Coca-Cola Company's commitment to Africa remains steadfast,' Ortega said. 'The Coca-Cola system has announced investments of nearly $1.2 billion on the continent over the next five years, and we are hopeful that stable and predictable policy environments will enable more investments in the months and years ahead. Additionally, the Coca-Cola system will invest nearly $25 million by 2030 to help address critical water-related challenges in local communities in 20 African markets.' This study highlights the Coca-Cola system's role in Africa's long-term growth and driving more sustainable development across the continent. The approach adopted by Steward Redqueen integrates client-provided operational data with trusted third-party economic sources and industry benchmarks. More than just measuring direct contributions, the analysis uncovers economic interlinkages, showing how the Coca-Cola system drives production, generates income, and supports employment across a spectrum of industries and geographies. Teodora Nenova Managing Partner at Steward Redqueen added: 'Our impact assessment reveals the wide-reaching economic footprint of the Coca-Cola system across Africa. The findings highlight the scale of the Coca-Cola system's local presence and its ongoing contribution to economic opportunity and livelihoods across the continent.' Distributed by APO Group on behalf of Coca-Cola. About The Coca-Cola Company The Coca-Cola Company (NYSE: KO) is a total beverage company with products sold in more than 200 countries and territories. Our company's purpose is to refresh the world and make a difference. We sell multiple billion-dollar brands across several beverage categories worldwide. Our portfolio of sparkling soft drink brands includes Coca-Cola, Sprite and Fanta. Our water, sports, coffee and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa, Georgia, Fuze Tea, Gold Peak and Ayataka. Our juice, value-added dairy and plant-based beverage brands include Minute Maid, Simply, innocent, Del Valle, fairlife and AdeS. We're constantly transforming our portfolio, from reducing sugar in our drinks to bringing innovative new products to market. We seek to positively impact people's lives, communities and the planet through water replenishment, packaging recycling, sustainable sourcing practices and carbon emissions reductions across our value chain. Together with our bottling partners, we employ more than 700,000 people, helping bring economic opportunity to local communities worldwide. Learn more at
Mail & Guardian
17-06-2025
- Business
- Mail & Guardian
How banks can better serve small businesses in Africa
Traditional banks need to figure out a way to serve small businesses. Small companies power much of Africa's economy. But traditional banks haven't fully tapped into this potentially lucrative segment due to risk concerns and stringent onboarding and credit requirements. This gap is being filled. A growing assortment of telecommunications companies and challenger banks are willingly embracing the perceived risks associated with smaller businesses, offering microfinancing and innovative solutions that traditional banks have been hesitant to provide. The allure — higher lending margins today and long-term relationship building for tomorrow. If traditional banks want to remain competitive over time, they must figure out a way to serve this segment — quickly. The category of micro, small and medium-sized enterprises (MSMEs) contributes about Although 80% of MSMEs have bank accounts, about 70% still rely on personal accounts for business transactions. What's more, research from the In all, about 28% of MSMEs in Africa don't have access to credit, Effectively serving MSMEs presents significant opportunities for both banks and the broader economic development of Africa. The continent features a concentration of large commercial enterprises alongside a vast number of informal MSMEs. By formalising this sector, banks can help to unlock its potential, stimulating economic growth. As these businesses gain access to financial services, they can contribute more effectively to job creation and GDP growth, leading to a more resilient and diversified economy. Small and micro businesses present unique risks, such as limited financial records, lack of collateral and vulnerability to macroeconomic events, which explains banks' hesitance to provide a comprehensive range of services. But MSME banking also offers benefits, including fatter lending margins, strong customer relationships and a large value pool. The competitive landscape is fragmented, with players excelling in specific areas rather than holistically. Competition is heating up as digital banks, telcos and fintechs recognise the value of serving MSMEs and tailor products to them. The increasing focus on MSMEs is no coincidence; methods for managing risk and developing a fit-for-purpose risk appetite have evolved. Advanced scoring algorithms that use non-financial data and fintech innovations tailored for MSMEs are now available, all of which are further enhanced by the fast rise of artificial intelligence. Digital banks and fintechs are addressing the payment and financing difficulties of MSMEs in innovative ways. Fintech companies often start with a single product and rapidly diversify their offerings. Lula, for example, began as an MSME lending business and has since entered the banking space, while Yoco, initially focused on payments, is moving into lending based on insights into merchant cash flow. Challenger banks rooted in personal banking are also entering the MSME space. Capitec, for example, recently acquired Mercantile and relaunched as Capitec Business, implementing a new commission-based model for point-of-sale services. TymeBank has enhanced its offerings through the acquisition of an MSME-focused fintech, developing innovative solutions such as a loan product and an AI-driven tool to support businesses in managing their finances. Mobile network operators are broadening their financial service offerings to tap into the MSME market, using their extensive reach. Big tech companies are also launching MSME solutions as part of their broader financial initiatives, such as embedded finance, intensifying competition. Despite the rise of fintechs and challenger banks, traditional banks still have valuable opportunities to work with MSMEs. Their credibility and established reputation resonate with MSMEs, similar to their appeal to larger corporations. But many traditional banks face a dilemma in deciding which MSME segments to prioritise. While they excel in serving medium enterprises, they often struggle to connect with micro and small businesses, where fintechs have gained significant traction. The key question for traditional banks is whether their existing business models can adapt to this evolving landscape without major overhauls. Banks that dominate the upper MSME spectrum might find growth opportunities by targeting smaller enterprises and vice versa. But their current structures could hinder such transitions. As they pursue growth, traditional banks must protect their core business and maintain operational capabilities. Striking the right balance between defending existing operations and exploring new segments will be crucial for long-term success. While it's clear that financing and advisory services remain the most sought-after for MSMEs, there are also opportunities in non-financial services, including documentation assistance, operational support, training and data analytics. These 'beyond banking' services are increasingly seen as must-haves by all banking customers. To succeed, banks must recognise the unique needs of African MSMEs and develop tailored products and services that simplify business operations. This may involve partnering with fintechs and specialists to enhance capabilities and offer fit-for-purpose and personalised solutions. This strategy will not only generate new revenue streams for banks but also equip MSMEs with the essential support they need for growth. Ultimately, a collaborative approach will unlock significant opportunities, driving sustainable growth for companies — and banks — across the economy. Pierre Romagny is a partner in financial services at Oliver Wyman.
News24
03-06-2025
- Business
- News24
SA could see R870bn in debt savings with a new inflation target
A lower South African inflation target coupled with a revised borrowing strategy could save the government as much as R870 billion in debt-service costs, according to a research document published by the nation's central bank. The working paper by authors including Christopher Loewald, the head of the South African Reserve Bank's economic research department, builds on Governor Lesetja Kganyago's argument last week that a reduction in the target of 3% to 6% would boost growth and lower borrowing costs. The Bank and the National Treasury have been in talks about a new framework since February 2024, with discussions 'ongoing,' Deputy Finance Minister David Masondo said on Monday. Over a decade, a 3% target in tandem with a strategy that emphasizes short-term and inflation-linked borrowing could generate R870 billion in 'nominal cumulative savings' on debt-service costs, the authors said. Costs would decline to about 4.8% of gross domestic product by 2029-30, and 3.8% by 2034-35, absorbing a diminishing share of state revenue, they said. South Africa's current inflation regime hasn't been altered since its adoption 25 years ago. Policymakers aim to peg inflation expectations at the midpoint of that range and are currently beating their goal, with annual inflation in April running at 2.8%. That 'high and wide' target keeps inflation risks 'higher than they need to be, depressing economic growth and deepening inequality,' the authors said.
Zawya
02-06-2025
- Business
- Zawya
Why Uganda's private sector is squeezed out of credit market?
Uganda's private sector was pushed to the periphery of the credit market in the first quarter of 2025, even as the government tapped heavily into the local lending basket for funds. Data also shows that local telecommunications firms absorbed significant new loan facilities during the same period. Growth in private sector credit slightly declined to 7.9 percent between January and March 2025, compared to 8 percent recorded between October and December 2024, according to the latest Bank of Uganda (BoU) data. The growth rate for Ugandan shilling-denominated loans fell from 10.3 percent in the last quarter of 2024 to 10 percent during the first three months of 2025. In contrast, growth momentum in foreign exchange-denominated loans slightly increased, from 2 percent between October and December 2024 to 2.3 percent in the first quarter of 2025. The total value of commercial bank loans disbursed to the private sector rose by 4 percent to Ush21.5 trillion ($5.9 billion) between December 2023 and December 2024, while the industry loan default ratio fell to 3.9 percent over the same period. The increased government borrowing is attributed to slow growth in tax revenues and a surge in government expenditure driven by supplementary budget requests. Lenders also prefer lending to the government, as it offers higher returns, reducing their appetite for private sector lending as they seek to avoid risky loans.'Apart from domestic government borrowing raising rates for borrowers, its refinancing arrangements - through rollovers and not repaying principal amounts - reduce liquidity in financial markets, whose fund allocation is driven by market incentives,' said Dr Fred Muhumuza, a local economist.'It also diverts private investments from the real economy, which creates jobs and growth, to financial instruments that only generate financial wealth.'The real cost of borrowing incurred by private businesses seeking alternative sources of credit remains unclear. Average yields on the 91-day Treasury bill rose from 9.9 percent in the quarter ending April 2024 to 10.9 percent in the quarter ending April 2025, according to BoU data. Yields on the 364-day Treasury bill increased from 14.6 percent to 16.7 percent over the same period. The yield on the two-year Treasury bond rose from 13.3 percent to 15.5 percent, while that on the five-year bond increased from 14.8 percent to 16.2 percent. Similarly, the yield on the 10-year bond rose from 15.8 percent to 16.7 percent, and the 15-year bond yield climbed from 16.2 percent to 17.1 percent. Local telecommunications companies, however, dominated private sector borrowing during the same period. Their infrastructure investment needs and quarterly dividend payments were cited as key drivers of significant borrowing, though details of specific transactions remained unavailable at press time.'Most of the lending directed to telecommunications companies is meant for new infrastructure investments and quarterly dividend payments.'Their loans are priced on the Structured Overnight Financing Rate (SOFR), tied to a three-month average plus four percent, equivalent to an annual interest rate of 8 percent on US dollar loans.'Some loans disbursed to the telecommunications sector have a five-year tenure. These companies play a big role in the economy and provide a reasonable gauge for monitoring the country's economic health. We are less worried about credit risks in the telecommunications sector at this time,' observed a financial analyst at Absa Bank Uganda, who requested anonymity due to confidentiality obligations. Michael de Kock, an economist at Oxford Economics Africa based in South Africa, said that while precise data on borrowing costs from alternative sources was limited, tighter credit conditions suggest they are on the rise.'Despite tighter credit, April's PMI hit a five-month high, suggesting businesses are adapting to higher borrowing costs. The telecommunications sector's heavy bank borrowing reflects strategic confidence rather than financial distress.'The March 2025 network sharing agreement signed between MTN and Airtel further illustrates strategic capital optimisation while expanding coverage,' he explained. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
