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KINT 4825 - Africa rising

Type d'enseignement : Seminar

Semester : Spring 2017-2018

Number of hours : 24

Language of tuition : English

Voir les plans de cours et bibliographies

Pre-requisite

aucun

Course Description

Africa in 4 figures: 54 countries covering a space larger than the US, China, India and Europe combined. Africa today has a GDP reaching in 2015 USD 2,250 billion equivalent to the size of the Italian economy ; Africa tomorrow, this will be additional USD 407 billion in terms of goods consumption by 2020 ; Africa in longer term, this would be the largest working force in the world in 2035. Africa has a dual face: promising and risky. Africa is one of the most dynamic region in the world with Asia with an average growth rate of 5% between 2005 and 2014, even 6% excluding South Africa. 10 out of the 20 most dynamic countries in the world are currently located in Africa. The potential demographic dividend is huge, extreme poverty declined and an African middle class is growing. In parallel, the context has changed since 2014 and macroeconomic challenges are growing. Fiscal deficits have increased in many countries causing some debt sustainability concerns. Finally, a growth more inclusive is crucial to reduce inequalities and to make it more sustainable in the long run. Such a large continent hides huge disparities. The development of Africa was very dependent on concessional resources but the paradigm of aid has changed. A global understanding of technical terms will be provided to explain how concessional lending terms are calculated and how those terms have been driving the development agenda for more than 20 years. While concessional resources are necessary, they are largely unsufficient to finance the huge needs of the continent. They call for innovative financing and instruments to attract investors with right risk mitigation approaches. In parallel, more countries have an access to capital markets but mid-term predictability remains uncertain. Finally, a special business outlook will be provided. While historical major multinationals in particular European ones still occupy strong positions, new comers – especially China, Brazil, India, Turkey, are more and more visible. Simultaneously, new African companies have emerged like the family Group of Aliko Dangote. More and more African companies are willing to embody the new face of Africa.

Teachers

CHERVALIER, Benoît R. (Président de "One2five advisory")

Course validation

The assessment of the course will be based on three components: - A presentation by students on specific items and oral participation (30%) ; - A case study to present in small working groups (30%) ; - A written questionnaire at the end of the course (40%).

Required reading

  • Ernst & Young Africa Attractiveness Survey 2015 (http://www.ey.com/ZA/en/Issues/Business-environment/EY-africa-attractiveness-survey-2015)
  • Mc Kinsey Global Institute, Lions on the Move: the progress and potential of African economies, September 2016
  • African Development Bank Group, Africa Economic Outlook 2016

Additional required reading

Global credit research Moodys (September 2016) - https://www.moodys.com/research/Moodys-Sub-Saharan-African-economies-vulnerable-to-risks-posed-by--PR_334899

Plans de cours et bibliographies

Session 1: Context and rationale: from the hopeless continent to a rising Africa

Africa has a dual face: promising and risky. Africa is one the most dynamic regions in the world with Asia with an average growth rate of 5% between 2005 and 2014, even 6% excluding South Africa. 10 out of the 20 most dynamic countries in the world are located in Africa. The potential demographic dividend is huge, extreme poverty has declined and an African middle class is growing. In parallel, the context has changed since 2014 and macroeconomic challenges are dramatically growing for some countries. Fiscal deficits have increased in many countries causing some debt sustainability concerns. Finally, a growth more inclusive is crucial to reduce inequalities and to make it more sustainable in the long run. Such a large continent hides huge disparities.

Session 2: A focus on African institutions

Africa is willing to increase its voice domestically and internationally. A lot of progress has been made. Still a lot remains to be done to achieve a game changer role.

Recommended readings:

  • Memoirs of A. Romeo Horton, “For Country Africa and my people”, Ghana Universities Press, 2004

Student’s work on African’s institutions:

  • The African Union

Session 3: The Africa’s traditional financing framework

Africa was very dependent on concessional resources but the paradigm of aid has changed. A global understanding of technical terms will be provided to explain how concessionnality is calculated and how those terms have been driving the development agenda for more than 20 years.

Recommended readings:

  • The Debt Sustainability Framework of the IMF

Session 4&5: Aid financing is necessary but not sufficient: how to reduce the financing gap, in particular the infrastructure gap: the role of financial markets?

Concessional resources are necessary but unsufficient to finance the huge needs of the continent. A shift of paradigm calls for innovative financing. In parallel, more countries have an access to capital markets but causing some debt sustainability risks. Mid-term predictability remains uncertain.

Student’s work

  • FDIs and Remittances: huge flows but small use?

Session 5: Risk mitigation in Africa from a financial and political perspective

Mitigating risks is a key challenge to attract investors. Various initiatives have been launched with mixed outcomes.

Session 6&7: Trade in Africa

Trade flows (exports plus important values) have dramatically changed over the past decade with the increasing weight of emerging countries. However, traditional partners still remain key.

Students’ work:

  • China in Africa today
  • Brazil in Africa today
  • Turkey in Africa today

Session 8&9

  • Working groups will be set up.
  • No readings. Instructions will be provided during the course.

Session 10: Foreign companies in Africa: traditional stakeholders and new comers

For historical reasons, some major multinationals in particular European ones have been present for many years in Africa. They still occupy strong positions. However, new comers are more and more active, especially from emerging countries

Student’s work:

  • American companies in Africa
  • Morocco: the new Sub-Saharan Africa hub?

Session 11: the growing role of African companies

New companies have emerged like the family Group of Aliko Dangote. More and more African companies are willing to embody the new face of Africa.

Student’s work:

  • The Dangote Group: the reasons of a success story?
  • The Top 50 African companies

Session 12: conclusion and wrap up session

  • Key stakes and expected outcomes for the ten coming years will be presented.
  • Key findings will be presented and followed by a quick presentation: “Working for the benefit of Africa in 2015”
  • Q&A with students.

Biographical Information

Benoît Chervalier is Chairman and Co-founder of one2five advisory, a merchank bank dedicated to financial sovereign advisory services in Africa. He has a rich and diverse experience in the financial sovereign advisory industry, as Director of Rothschild & Co’s Sovereign Franchise for Africa, as an executive civil servant at the French Treasury Department and the German Federal Ministry of Finance, and with the African Development Bank, where he notably managed the replenishment negotiations of its concessional financing window in 2013, successfully raising USD 7.5 billion. In addition, He has been delivering courses for more than ten years in the development and financial services industry. He is the author or various publications. He has graduated from Sciences Po (Master), the French Air Force (Officer) and Harvard Kennedy School (LMD).