Friday, November 11, 2005

Ghana's 2006 budget encourages Venture Capital Funds

Business News of Thursday, 10 November 2005

The private sector is talked about a lot as one of the highest potential drivers of growth for the economy, but acess to capital is usually an obstacle in promoting private enterprise. Baah'Wiredu's 2006 budget gives previously unheard of incentive to people interested in launching VC funds, so hopefully this should spur some innovation and private enterprise. One of the highlights is tax deductions for financial institutions who invest in VC subsidiaries (100% of their investment), and the Ghanaweb article also says:
"The incentives are the upfront relief from stamp duty in each year on subscriptions for new equity shares in venture capital funds, the full tax exemption from corporate income tax, dividend tax and capital gains tax for five years and the provision for the losses from disposal of the shares during the tax exempt period to be carried forward to the post-exempt period up to five years."
It is great that the government is not putting itself in the middle of this, and is encouraging the private sector to take it up. It does however raise a question someone brought up in a conversation we had. The issue of regulation. The tax breaks are pretty substantial, and we could see a slew of people setting up VC funds to finance (in my friend's words) 'their sister's rice importing business.'

File under: ghana, vc, baah-wiredu

Thursday, November 10, 2005

Togo: the (largely) untold story

People around the world were quick to decry Faure Gnassingbe being put in power by the Togolese army after the death of his father, Gnassingbe Eyadema. This led to elections marred by violence, and after that little has been heard about the situation in Togo. In September, the UN released a report stating that almost 500 people were killed in violence surrounding the elections, but the report has received little attention, and the plight of the Togolese people goes largely unnoticed.

Togo comes to mind after a talk I went to on Tuesday, where a Togolese human rights journalist spoke about the situation, and showed pictures of the post-election brutality. The pictures were horrifying, to say the least, and gave a perspective of the story we don't hear much. The journalist was in the US talking to groups of people and trying to rally people to put pressure on governments to put pressure on Faure and Togo to aloow for a more pluralistic democracy in Togo. He argues that while there may have been elections, they were far from fair, and opposiiton supporters are still being persecuted in Togo. The journalist himself is currently in exile in Ghana, after narrowly escaping in his words, an attempt on his life by the Togolese government.

The talk raised a lot of issues for me, the first just the most basic one of people being denied their fundamental human rights. The journalist showed multiple pictures of people who had been killed and beaten just for wearing opposition colours - horrific pictures. Can there be progress/development when people do not have the right to hold and assert particular points of view, when a perception of your opinion is enough to mark you for death?

Another issue was why he was in the states to begin with - something we talked about at length. I asked the journalist why he didn't talk to leaders in Africa, Kufuor, Obasanjo and those of other neighbouring countries, afterall, their pressure helped to force elections. He recounted how they have tried that to no avail; he was adamant about collusion between the regional governments, but I will not pursue that for now. What struck me most about this was the similarity between the current situation in Togo and what has previsouly happened in Ghana and many other places. The extra-judicial kidnappings and murders are reminiscent of stories from Ghana under a certain leader who shall remain nameless, and few African countries are strangers to elections where the incumbent military junta wins under what many people believe to be dubious circumstances. Why then would African leaders not go to the aid of people fighting many of the same battles they fought? Is there something to his claims of collusion, or are each countries problems just too large and numerous to warrant attention to any others?

This is an issue I've been thinking about for a while, particularly in relation to the idea of an African identity( a topic i will leave for a future posting). Are we largely blind to the problems of neighbouring African countries because we see them as having no bearing on us? This issue came to the forefront again when I was listening to a Ghanaian radio programme online. The host was commenting on a news story about violent protests by a rgoup of refugees in Ghana. He and his co-host made uncomplimentary comments about the refugees, and how they should be sent back to their countries,since Ghana has its own problems. Admittedly Ghana has many problems, and unrest caused by refugees is certainly not something to turn a blind eye to, but surely such comments go against any semblance of commiseration and attempts to provide support to fellow Africans.

I digress, but my point was to look at why to a large extent, Africans are unwilling to help each other. I could understand the (Togolese) journalist when he calimed to have lost faith in international institutions, but when he made the same statements about other African countries, particularly the governments, that hit me hard. He was largely convinced that none of them cared about the plight of the Togolese people.

Later in the day I saw emails which had been sent to him from other Togolese in exile in Ghana. My heart tore as I read stories of their misery, strangers in a foreign land, dying to go home, but having to make a choice between a familiar environment and comfort, and their lives. It was as simple as that.

I'm the first to admit that Africa has many problems, perhaps some arguably more threatening than human rights abuses in Togo, but this shouldn't fall between the cracks. When people do not have the right to express themselves freely without fear for their lives, there is a problem. A similar situation is brewing in Ethiopia, with the government of Meles Zenawi victimizing protestors.
Is this a cycle we will never break?

Wednesday, November 09, 2005

BBC NEWS | UK | Education | Illiteracy 'hinders world's poor'

BBC NEWS | UK | Education | Illiteracy 'hinders world's poor'

BBC carries this story on the link between illiteracy and poverty. It's another point in favour of focusing on literacy as a driver of development. I would agree that literacy is important, but to play the devil's advocate here, the article fails to make a strong case for the link between redusing illiteracy and increasing people's economic wellbeing. Sure, it shows that there is a link between poverty and illiteracy, with the poorest regions of the world having the lrgest percentagees of illiterate people, but stops there. As a former professor of mine would say 'correlation does not imply causality'

File under: education, literacy

Tuesday, November 08, 2005 - Fab Labs unshackle kids' imaginations - Nov 8, 2005 - Fab Labs unshackle kids' imaginations - Nov 8, 2005

CNN carries a story about the Fab Labs MIT is setting up around the world, and the story of the innovation of one girl in Boston. A Fab Lab has also been set up in Takoradi, in Ghana, and wired news has previously carried a story about this. This is an interesting venture in design, and according to fablab staff, kids are picking up computing and design skills fairly quickly. Is this perhaps a way to encourage indigenous innovation and solutions to some of Ghana's challenges? One of the projects being worked on looks at harnessing solar power for cooking etc.

FIle under: fablab, Ghana, MIT

Wednesday, November 02, 2005

"i go chop your dollar"

I'm still laughing to myself after seeing the hilarious video for 'i go chop your dollar', by Osuofia of 'Osuofia in London' fame.The video itself is rather poorly done, with little in the way of innovation, poor cinematography and a set of not very enthusiastic dancers. It is the song itself I find funny, since the video was the first time I heard the song. Osuofia sings about '419' crimes, or advanced fee fraud. He talks about 'the white man' as the victim, and is resolute in his plans to continue perpetrating such fraud. He makes amusing statements about the amount of power he has and the resources at his disposal - not dissimilar from the claims in these '419' messages. Central to the song though is the claim that '419 it no be crime, it's just a game, everybody dey play am.' I was highly amused when a friend sent me this, and indeed still am, but it raises a few questions i think are pretty serious.

A UK presentation at the 2002 International Conference on Advanced Fee (419) Fraud claimed that global losses to this fraud may total $1.5 billion. That's some pretty serious money. The song is meant to be taken lightly, but is it really taken lightly by everyone who hears it? Or does it provide some sort of justification for perpetrators of this fraud, and exacerbate an already bad situation. After all, the song begins with Osuofia bemoaning his suffering in his former penurious state, and in that way justifying the crime as a source of income. If I was a low-income person ( as I would imangine mostof these criminals are) considering perpetrating such a crime, that would certainly make me see it as slightly more reasonable.

Another justification used is that 'the white man' is too greedy. Admittedly there is something somehwat avaricious about someone who beleives they have been randomly selected to help with some secret transaction, often with a promised reward in the millions of dollars for little to no effort on their part. Not to mention the fact that many of these letters make no bones of the fact that it is an illegal transaction; trying to avoid government scrutiny or the payment of some form of fees. That being said it is not (in my opinion) justification for committing such crimes, although the song gives the impression it is.To cut a long story short, is this seemingly harmless song actually encouraging the continuation of 419 scams?

On another note, in one attempt to combat the spate of these crimes, which to a large extent originate in Nigeria, the Nigerian government has considered outlawing spamming. While the hefty fines might serve as a deterrent to an extent, how much of a dent can this really make in the crimes? There is the problem of enforcement to begin with, and perhaps this is not the best use of Nigeria's resources( ie the tracking of spammers). In addition to this, is this the way to tacke the problem? Some of the 419 emails are quite ingenious, to say the least, and take some amount of brain power to cook up, not to mention following through till the money is collected. Given an estimated success rate of 1%, very few scammers are making money (even though the payoff can be tremendous when they do). That being said, might not another way to address the problem be to channel the energies of these people elsewhere? Perhaps training schemes to encourage people to set up in private enterprise? Or business plan compeittions as an incentive to use their brain power for something more beneficial?
Just a piece of my mind....

And to end, here is my favourite 419 email of all time :-)
Dear Mr. Sir,


I am Dr. Bakare Tunde, the cousin of Nigerian Astronaut, Air Force Major Abacha Tunde. He was the first African in
space when he made a secret flight to the Salyut 6 space station in 1979. He was on a later Soviet spaceflight, Soyuz T-16Z to the secret Soviet military space station Salyut 8T in 1989. He was stranded there in 1990 when the Soviet Union was dissolved. His other Soviet crew members returned to earth on the Soyuz T-16Z, but his place was taken up by return cargo. There have been occasional Progrez supply flights to keep him going since that time. He is in good humor, but wants to come home.

In the 14-years since he has been on the
station, he has accumulated flight pay and interest amounting to almost $ 15,000,000 American Dollars. This is held in a trust at the Lagos National Savings and Trust Association. If we can obtain access to this money, we can place a down payment with the Russian Space Authorities for a Soyuz return flight to bring him back to Earth. I am told this will cost $ 3,000,000 American Dollars. In order to access the his trust fund we need your assistance.

Consequently, my colleagues and I are willing to transfer the total amount to your account or subsequent disbursement, since we as civil servants are prohibited by the Code of Conduct Bureau (Civil Service Laws) from opening and/ or operating foreign accounts in our names.

Needless to say, the trust reposed on you at this juncture is enormous. In return, we have agreed to offer you 20 percent of the transferred sum, while 10 percent shall be set aside for incidental expenses (internal and external) between the parties in the course of the transaction. You will be mandated to remit the balance 70 percent to other accounts in due course.

Kindly expedite action as we are behind schedule to enable us include downpayment in this financial quarter.

Please acknowledge the receipt of this message via my direct number 234 (0) 9-234-2220 only.

Yours Sincerely, Dr. Bakare Tunde Astronautics Project Manager
Tags: nigeria, africa, 419