Africa’s rising bubble pricked by Mooi River’s copper-cable thieves

2012-01-28 00:00

DAVOS is the highest town in Europe. Sometimes, it also feels a million miles away from the real world. Here, during the last week of January every year, partners of Goldman Sachs swan around as though they don’t work for the most hated brand on Earth. Here, people who have never spent a night in a shack, pontificate about how to improve the lot of the poor. On the upside, here, too, are many authentically good sorts from all around the globe brainstorming ways to improve the world.

This is my ninth visit to Davos, all coinciding with the annual meeting of the World Economic Forum (WEF), a 42-year-old icon which puts together the greatest cerebral show on Earth. The five-day schedule is physically and mentally punishing. A boot camp for the mind. An injection of undistilled ideas from the best brains on the planet. These kings and queens of their own worlds don’t hold back. They say it like they see it. Even if they don’t really see it clearly.

I spent the first 24 hours of this year’s mental jamboree feeling really good about my home, my long-neglected Africa. A continent so rich with promise, but so pitiful in delivery. Pricewaterhouse Cooper’s (PWC) CEO survey released on the eve of the WEF annual meeting provided the initial lift. It revealed a double dip in business confidence everywhere but Africa. Only half as many Chinese CEOs are as confident as a year back. India’s business confidence fell, breaking a six-year streak. But African business leaders are buoyant, the world’s sole source of rising business confidence.

When I asked why, PWC’s global CEO Dennis Nally waffled about Africans not having the world’s problems. There was a much better steer afterwards from a one-time ­Pietermaritzburg schoolboy Warwick Hunt, who leads PWC in the Middle East. The Arab world, Hunt said, is piling money into ­African agriculture to secure its food supply. The Chinese are going for the minerals. In-between, Indians are coming over in greater numbers to focus on the commercial side. Then you have the smart South Africans moving north as well.

Deceptively simple, but Hunt has it in a nutshell. Africa is the last place on Earth where business leaders see the opportunity of earning super profits. So, those ahead of the curve are bringing their money in the hope of generating returns beating anything else on Earth.

Africa on the rise is a universal theme in Davos this year. The International Monetary Fund added impetus with a now well-quoted projection the continent will overtake Asia as the world’s economic-growth hot spot. Economists point out Africa has grown faster than East Asia in eight of the last 10 years. Business leaders add fuel. Like booze company Diageo’s Paul Walsh, who said Africa is only 15% of worldwide sales, but gets half the group’s new investment capital.

With all this happy juice from the global wise and powerful, why am I still feeling so uneasy?

It came through a rude reminder of on-the-ground realities which hit us on arrival here. We live on a farm just outside Mooi River. Unemployment is so high, locals provide piece-work for R60 a day, around the cost of a cup of coffee in Davos.

There are other real issues, too. This week, the copper-cable thieves targeting our district struck again. Some months back, they ripped away the connectivity of Balgowan. Then they moved north to Nottingham Road. Two weeks ago they hit the southern side of Mooi River. This week it was our turn. Telkom’s copper wire cable along Giant’s Castle Road is gone. Hidden in some scrap dealer’s back yard en route to China. Sold for a fraction of the replacement cost. Never to return, as Telkom says it is not commercially viable to replace the cable.

The copper-cable theft means we fly back next week to a very different home. No more connectivity means our hefty investment in a tailor-made ­radio studio at the farm might as well be written off. It seriously threatens the ability to be networked to the world. This small example should give pause for thought to Africa’s rampaging bulls. The continent offers outrageous returns because the risks are, well, equally outrageous. But right now that seems secondary in this elevated world of the powerful.

• Alec Hogg is the founder of Moneyweb.

 

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