Refining the Focus

Over the past few months, we have been refining our focus here at Fourth Watch. Although always open to other consulting opportunities related to the background and skills of the directors of Fourth Watch and our close associates, we are putting most of our effort behind a few projects that we feel have the opportunity to make a positive impact in Africa.

Focus Area:
Driving Impact Investing in the Natural Resource Sector in Sub-Saharan Africa (particularly South Africa and Zambia)
Three Stages:
1) Deal Sourcing
2) Project Design
3) Impact Evaluation

As always, a lot hangs on the definitions above, so here is a bit of elaboration.

Natural Resources - It is our opinion that it is very important to African development to move beyond the current model in many countries where the main driver of economic activity is primary resource extraction. In other words, mining or forestry (clear-cutting) activities where the raw material is extracted, prepared for shipment, and sent overseas for any subsequent secondary processing or value-added activities. In this model, the country gets some royalties for the resource and immediate and short term employment is created, but there is little lasting value added to the economy of the country. In most cases, the capital required is not available in the country, so the profits are also all exported to the international investors who provided the capital. It is our desire to move beyond this model and focus on projects that create a more sustainable development model. The natural resources sector allows for a great scope in such projects. We are currently looking at projects in agro-forestry, aquaculture, game farming, and eco-tourism. Although there aren't any on our radar at the moment, we are also actively looking for opportunities in agriculture.

Deal Sourcing - This is a service we can provide to international investors that are looking at making large investments into the above-stated focus areas and in the countries listed above. Through our strong network of local contacts throughout Sub-Saharan Africa, we are presented with a steady stream of investment opportunities. We welcome any suggestions on opportunities from readers, who can contact us at the email address listed on this site. Fourth Watch Global Analytics conducts its own preliminary due diligence on promising investments, and then presents them to funders. Many impact investing funds are currently experiencing a shortage of qualified investment leads, and we specialize in connecting the two.

Project Design - Most of this work occurs on the target investment side. When we have a project that has good potential, we often still need to redesign and repackage the investment in a way that it will be ready for funders to come in and do their own due diligence. For example, we can assist with designing such features as environmental remediation programmes, employee profit sharing systems, training and education programs, community building programs, and the design of innovative financial structuring that will retain or return majority ownership to local ownership or even employee ownership through a cooperative model.

Impact Evaluation - Fourth Watch and some close associates are designing social and environmental measures for our own investment deals, but are also interested in any opportunities to assist funders with designing customized measurement systems. We have the capacity to work on both design and implementation. We prefer to manage the ongoing monitoring and evaluation ourselves or through trusted associates contracted to provide such services. We are also open to discussing contracts to reliably manage monitoring and evaluation projects for impact investments that were sourced and placed by others. Although our specialty is on social and environmental measures, we also use associates to monitor financial performance.


So, with all that said, it is interesting to note that our best efforts at this point are going towards designing what we feel will be a very innovative impact investment. We are attempting with one of our projects to provide a template that can be followed by others, showing that it is possible to do resource extraction in a different way than that which I critically described earlier in this post. Is it possible to do a mining investment with a positive triple bottom line designed right from the start? Can it be done in a way that provides a net environmental benefit? Can profits and ownership be retained within the country? Can jobs be created that live well beyond the project? Can employees feel safe, valued, and personally connected to a mining company? We hope to answer yes to these questions, and in the coming weeks hope to share more details about the project on this site. Obviously here at Fourth Watch we do not shy away from a challenging project - let us know if you have such a challenge for us, and stay tuned for more information!

Cape of Storms Strikes Again

Because of the rainy weather in the long and wet Vancouver winters, weather reports out of Cape Town often make me homesick for my two years that I spent living there and studying for my Masters in Development Finance. August is one month where this very rarely happens, and often the reverse is true. This week has been no exception, as the winter storms on the Cape have been very fierce indeed.

Here is a picture I came across on my internet news scanning this morning of the recent shipwreck of the Kiani Satu:

I am very hopeful that the quick reactions to clean up the environmental damage are successful and that they are able to prevent significant damage from occurring in the nearby tidal estuary.

Cape Nature Article

Zambia Rising

I recently returned from a visit to Zambia and was struck by the speed with which the Africa Rising phenomenon is becoming evident there.

For readers who aren't aware of what I mean with the term "Africa Rising", I am speaking of the growing belief that the coming decades will see accelerating progress in combatting development challenges in Africa, and that economic growth will lead to the emergence of a middle class and major reductions in poverty. Those who hold this belief cite such statistics as the following:
- decline in rate of malaria deaths by 30% in many of the worst affected countries
- rate of new HIV infections dropping by up to 74%
- increasing literacy rates
- improving stats on infant and maternal mortality rates
- increased political stability and growth in democratic systems
- massive increases in real income
- sustained GDP growth of well over 5% in most countries
- exponential increase in foreign direct investment

Of course, massive poverty still exists and there are many cases of entrenched conflict (e.g. DR Congo), corruption, and neo-colonialist resource stripping by foreign companies. The evidence of improvements, however, has been noticed by many and reported in popular press to the point that old stereotypes are rapidly fading.

Just over ten years ago, the Economist magazine published a cover story on Africa entitled "The hopeless continent".


A decade later, they were big enough to admit that the picture had changed substantially, and the continent was indeed finding reason for hope and optimism. The cover story a couple of years ago was entitled "Africa rising".



Many others have piled on in the press in their rush to voice agreement, including Time magazine, The New York Times, and The Times.

An excellent book has also been written on this topic and with the title: "Africa Rising: How 900 million African consumers offer more than you think" by Vijay Mahajan.
 

Mahajan breaks down this phenomenon in very readable terms and then goes on to outline how businesses can take advantage of the massive opportunities that will come from not just the rising middle class in Africa, but also the mass of people at the bottom of the economic pyramid who are also making economic progress and who collectively represent a massive amount of potential purchasing power for consumer goods and services.

So, on my visit to Zambia I was very curious to see if there was any evidence of this progress and to see what the environment felt like.

Soccer Stadiums

Soccer (football) is the most popular sport across Africa. The stereotypical image of African football is a bunch of shoeless boys playing on a dusty field with rusty colonial-era goalposts and a ball made of twine and some wadded-up rubbish. Although I did see a couple of those fields in the rural areas, I was quite impressed with the following two stadiums. When the big game is on, these two beautiful stadiums full up with locals who have a few Kwacha to spare for admission.

Levy Mwanawasa Stadium in Ndola (Copperbelt):

And the Gabon Disaster Heroes National Stadium in Lusaka:

Shopping Malls & Strip Malls
In the last couple of years South African commercial real estate developers showed up in a partnership with some of the rapidly-expanding South African power retailers and have built several shopping malls in Zambia's major cities. There are four in the capital Lusaka, and I also visited a beauty in Ndola, and several more are in the planning stages.

One of the largest is the Manda Hill shopping centre in Lusaka. Walking through there was a sort of weird time warp back to my couple of years that I was in Cape Town. It was also interesting to note that there were many local Zambian entrepreneurs that had set up shop in Manda Hill as well. The parking areas were very busy, and the mall had a lot of people in it. One thing I took note of was that I didn't see a single other white person for the first five minutes until I saw a safari tour operator in the bank's waiting area. Not an expat to be seen - all the shoppers were part of the Africa One and Africa Two market segments that Mahajan writes about in his book. And they were spending real money and generating more economic activity, employment, and tax revenue for the government.

Manda Hill interior:

Manda Hill exterior:

I don't want to be accused of only showing one side, so here is a more typical shopping experience that most Zambians still make use of. In Manda Hill you can go to the Spur restaurant or Nando's, but a lot more Zambians go for a drink or bite to eat after work at a place like this roadside pub with the refreshingly honest name: "The Easy Come Easy Go Roadside Pub".

And to pick up the groceries, they might more likely pick up some vegetables at a stand like this in an informal market, and perhaps also buy a few things for the house at a shop like the "The Lord is my Shepherd Hardware Shop". More and more, however, will buy such necessities at a shop like the South African owned Shop-Rite in a commercial shopping centre.

Homes
I spent a few nights in the homes of middle-class Zambians. Things are fairly simple inside, but they are gradually adding new appliances, upgraded (functioning?!) toilets, and even artistic decorations for the walls. Repainting the home to more modern or preferred colours? Probably almost unheard of a couple of decades ago, but now the Builder's Paradise shops seem to be thriving in service of such growing consumer preferences.

All around the major cities I saw evidence of new construction such as these small but sturdy homes, probably destined to be owned by semi-skilled workers in the Africa Two category.

Most Zambians, however, live in rural villages and in homes that look something like this. Many do not yet have access to clean water or toilets, but the government is beginning with efforts to push such services out into rural areas and to upgrade slums outside the big cities. I saw many shiny new water wells while on my way through the country.

Here's another view of a rural setting, with some more typical homes along the road. This is the stretch where I saw the twine football match on the dusty pitch.

As the economy grows and these people move beyond subsistence agriculture, it is likely that more solid structures will arise here and more people will have access to proper water and sanitation. They will create jobs in construction and for municipal service workers as they build, thereby fueling more economic growth.

Church
While growing up in Canada, I often heard at church about mission projects in Africa and other developing regions where funds had to be raised to help people build a church building. Later, in my teen years, I heard of a lot of people including some of my friends who went on "Missions Trips" to go help build such a facility. Our family also gave donations to help support missionaries who would go and serve people overseas.

So, when I went to church at the Woodlands Baptist Church in Lusaka on Sunday morning, at some subconscious level I think I was half expecting to see a Baptist missionary from Arkansas USA and maybe a few white financial supporters in nice suits on an inspection visit. Well, apparently Africa is rising in the church just as well as in the economy. I was the only white person in the place. The Zambian pastor gave a rousing sermon on the practical power of the Holy Spirit, and after the service he gave the pulpit over to a member of the council to talk about the building project. A-ha! Now the American benefactors would be revealed?? But no, the announcement spoke of thanksgiving that the people of the congregation had already managed to raise 80% of the funds needed for their new and expanded building on the new piece of land that they had purchased for themselves.

My church visit also gave other evidence of economic growth - the parking lot was not filled with donkey carts, but rather Toyotas, Land Rovers, and Tatas.

Roads
While driving around the country, I couldn't help but notice the roads we were driving on. Here was a real land of extremes. This particular road was beautifully new, wide, and smooth, with deep drainage gutters on each side. Unfortunately after a couple of kilometres it abruptly ended and became a dirt road with massive potholes. I was told by one person that the entire crew pulled up stakes and relocated to a municipality that was about to have a byelection.

The main highway coming into Lusaka from the Copperbelt. Smooth, divided, with passing lanes. Just keep an eye out for the sudden/abrupt appearance of axle-snappingly large speed humps at police road checks in the middle of a 100km/h speed zone. Driver beware.

A closer look may be needed to see the depth of the ruts in the road surface. Look at the right side of the picture to see how much the road surface has settled - there is still a lot of progress to be made in Zambia.

Probably a fairly typical Zambian road scene, complete with random dead dog. Well, actually, most rural roads aren't anywhere near this smooth.

 

 

So, the road system in Zambia has a lot of extremes. On the Africa Rising side of things, however, it should also be noted that the President has recently announced over 8,000km of roads are currently in the planning stage and about to be built. If only half of that number materialize, it will have profound benefits to the efficiency with which commerce can be conducted.

People
The best evidence that Zambia is rising can from my conversations with all the people From Africa One and Africa Two that I met. These people and their families had poured everything into education both in their own country and overseas, and were now helping others to do the same. Most of them had at least one entrepreneurial venture in progress outside of their main employment, with four or five other ideas or opportunities in backup. Buying a franchise shop, building a few rental housing units, partnering with a couple of others to develop commercial space, etc. These were people who could probably have a good job in a developed country if they wanted it, but they love their country and believe in its future. They are putting their money where their hearts are.

In all my conversations with these Africa Rising entrepreneurs and domestic investors, they described one major challenge that is holding back their plans and the growth of the country. A lack of capital. A handful of fortunate souls can access the modest funds in government programmes, and the rest can only access finance companies that offer lending rates at 60%/month or higher.

Are there opportunities for foreigners with capital to do good business in Zambia while making a positive impact on the country's future?
Yes.

Do I believe that Africa is rising and that Zambia will be on the forefront of that wave of growth?
Absolutely yes.

The price of participation in BRICS?

The United Kingdom's International Development Secretary Justine Greening announced that the UK's bilateral development assistance program will come to an end in 2015. This announcement came as quite a surprise to a lot of people in the international development community, and it seems also to the government of South Africa. The official diplomatic reaction from South Africa showed that they were seriously displeased.

So what was the reason for this displeasure?

First of all, what was it that the Rt Hon Justine Greening announced? She said that the bilateral aid program will be ended, but that existing programs would be gradually brought to an end with expected wrap-up by 2015. She also mentioned that the current program includes 19million Pounds/year, which is less than half of the 40million from ten years ago. The current program includes working alongside SARS to strengthen other tax services in Southern Africa, helping the SA Dept of Health to share knowledge of medicines to other SADC countries, and helping with the establishment of the South African Development Partners Agency (an agency helping RSA to share experiences in tackling poverty since the end of Apartheid with other African countries). The Rt Hon Ms Greening's announcement also indicated that this wasn't an end to their participation in South Africa's development agenda - she also said that the UK would now focus on technical assistance and skills transfer in the areas of health and economic growth, as well as boosting South Africa's role as a development partner in Africa. (read the official press release here)

And why was South Africa's government particularly unhappy about the announcement? First of all, the announcement was made at a conference of business leaders and African ministers in London. The South African government felt that this was an inappropriate time and place for such an announcement, and I suspect would have been somewhat embarrassed about finding out about it through the media and perhaps frantic phone calls from South Africans attending the conference, rather than through official diplomatic channels. South Africa's official statement was quite strong in voicing displeasure about the decision, and particularly with the manner in which it was communicated. Spokesperson Clayson Monyela said: "This is such a major decision with far reaching implications on the projects that are currently running and it is tantamount to redefining our relationship." The South Africans seemed particularly disappointed that Greening didn't wait until later this year to discuss it at a planned Bilateral SA/UK Strategy Forum. They made it very clear that they plan to make this a topic of discussion at that meeting. (read South Africa's official statement here)

The majority of large organizations such as Oxfam and ActionAid that put out an official response were either guarded or directly critical of DFID's move in cutting off aid to South Africa. Although the announcement was sudden and made in an unexpected way, it should also not have come as a total surprise. First of all, the UK has been reducing its bilateral aid to South Africa steadily for more than a decade. Second, other members of the BRICS grouping have been cut off in recent years including Russia and China, and a similar announcement about support for India was made last year. At Fourth Watch, we speculate on whether there is a link between this and South Africa's participation in BRICS. Could this be the price of participation in the BRICS grouping of rapidly growing economies? South Africa has been far from quiet about its participation, and made much of hosting the group in Durban recently. Perhaps all this talk about South Africa's economic growth also got the attention of those who have been asked to make cuts to the UK's bilateral aid programs. Even if there is no cause/effect relationship, at the minimum the South African government has provided the UK with a handy rationale for cutting the program.

Another observation that doesn't seem to have been picked up on by many is that these program cuts will hurt other African countries as much or more than South Africa. The entire program in its current format is about helping leverage successes in South Africa into other African countries. It's also surprising to us that no comments seem to have been made about the unilateral UK declaration on what direction aid will go in the future - there was clearly no dialogue with South Africa on what assistance is needed or wanted, and the wording of the UK's announcement carries the underlying assumption that the UK has superior knowledge on how to manage an economy - which seems slightly ironic given the two countries' recent relative economic performance.

All that said, we don't disagree with the direction that the UK is going with the program. The announced new focus does seem like a very sensible one from the outside, and one that will help development of the region as a whole. It's just unfortunate that they chose to announce it in such a unilateral and abrupt manner.

Oxford Visit

Today I'll be on my way to the airport to go to the UK. Over the next week and a half, I'll be attending some of the sessions at the Skoll World Forum for Social Entrpereneurs, the parallel OxfordJam conference, and then the Impact Investing Programme at the Oxford University's Said School of Business.

The main reason for the trip is so that I can attend the Impact Investing Programme. The curriculum includes a comprehensive overview of this emerging field, including impact investing deal flow, identification and analysis of investments, and an introduction to the latest tools for measurement of results against multiple (financial and non-financial) objectives. The instructors include tenured Oxford profs and some other international experts that have been brought in for this programme. It should provide a great opportunity for learning and for strengthening of professional networks for all the attendees.

Immediately before the course is the Skoll World Forum on Social Entrepreneurship. Since the main reason for coming was to attend the impact investing programme, I didn't want to commit to the full three days of the world forum conference immediately before the courses begin. I was excited to discover that I could just purchase separate tickets for the four keynote addresses, leaving most of my time free for preparation and to ensure I'm ready for the coursework. The keynote addresses should be great - the speakers include Jeff Skoll, Pamela Hartigan, Muhammad Yunus, and Kofi Annan.

I also discovered a fringe event called OxfordJam running in parallel to the main Skoll World Forum. OxfordJam is a free conference with a wide variety of talks by lesser known speakers than those of the World Forum, but some of the sessions looked to be quite interesting in their own right. Where time allows, I'll also pop by there for a few sessions and see what an un-conference looks like. OxfordJam also claims to have legendary social gatherings, so it might be a good place to take in a nightcap at some point as well.

During my time in Oxford I hope to post a few times to share some of the most exciting learnings. I'll also be pinging out regularly on my twitter feed, so if you want to catch a few nuggets as I share them out through that medium, follow me at @4thWatchGlobal.

Jerome

Crowdfunding for Africa?

Crowdfunding has been around for quite a few years now, but has recently been getting much more attention in the media as new players proliferate and this fundraising medium goes mainstream. Here at Fourth Watch we have been following this trend with great interest, particularly as we watch for players emerging with specific focus on impact investing in Africa. This post takes a look at what we've been seeing and how this might impact on venture capitalists with a heart for Africa.

One category of crowdfunding that has been rapidly expanding is generic platforms that help assemble funding for all manner of ideas from art projects to business startups. A great example of this is RocketHub, which allows users to post their idea to their site where it can be found by potential funders surfing the site. Users also then promote their idea using social media and any other method they can think of, and once the idea is funded RocketHub takes a "platform fee" to pay for its services.

Greenfunder uses a similar model to RocketHub's, but specifically brands itself as being devoted to "green" projects. It has a nice clean interface and accessible graphics and explanations. The definition of "green" projects is very loose, but this relatively new platform seems to already have had pretty good success in getting some projects funded.

A pioneer in crowdfunding for entrepreneurs and a pioneer in the world of microfinance is the mighty Kiva. Kiva taps into socially conscious citizens from all over the world, and uses a huge network of Micro Finance Institutions to delivers loans to people with needs. Part of Kiva's success is undoubtedly derived from its beautiful and highly developed platform (nice summaries and visual, high accountability from local partner MFIs, ability to give credit as gifts to friends, etc.). A distinctive of Kiva as compared to the previously mentioned crowdfunding platforms is that it also has a repayment feature where funders expect to receive their contribution back again so that it can be leveraged into other investments or else withdrawn.

In addition to these more general crowdfunding platforms, there are also numerous specialized platforms. For example, MOSAIC focuses on solar energy investment and has clearly been highly successful in this effort since all of its invesments are now fully subscribed and they have had to put new funders on a waiting list.

So, where are all the African focused crowdfunding platforms?

In our recent search for such specialized providers, we found some very mixed results. A very interesting article and interview on Idea Bounty was a little unsettling and caused some reflection and speculation on how many of the funded ideas on the mainstream sites like RocketHub and others of its type are legitimate. Two quotes from the interview with the founder of a new platform intended to fund South African ventures would have sent me heading for the exit in a real hurry: "I have been very upfront that there will *not* be "transparency"." and: "I don't ever want to see a business plan." I don't know the founder that was interviewed here and make no comment whatsoever on her, but there are some interesting comments under the article. Apparently the site disappeared, and another which jumped into the gap with a hyphenated version of the same name didn't last long either (it now directs to Ching, an online payment site).

But surely there must be a few success stories?! Yes, we did find a couple of fairly well developed operations. The first is VC4Africa - a platform for networking and connections between investors and African businesses that need funding. It also includes a mentorship program, which should increase investor engagement and improve results. There's also a great infographic with some key stats on small business financing in Africa.


The most well developed example that we found was Invest Africa. They take a different angle than most others by openly stating that they do not fund startups. They connect investors with developed and successful businesses that need capital for expansion. They also differ from the Kiva model in that they ask businesses to repay the investments that they get with a percentage of profits rather than using interest rates. This is a refreshing change and a radical departure from the high interest rates they would otherwise be charged by traditional lenders. Invest Africa also provides mentorship support through an online coaching platform. There's a lot to love about Invest Africa. The only problem we noted was that it focuses on the micro investment sector like Kiva or slightly large amounts.

Is this proliferation of equity crowdfunding a threat to African-targeted large private investment funds, venture capitalists and angel investors? At this point we don't see it that way. We feel that the proliferation of crowdfunding will be a great benefit to Africa's small entrepreneurs at startup phase or micro businesses seeking to expand, but that there will still be plenty of under-served space at the top end of the funding spectrum for institutional investors, venture capitalists and angel investors with deeper pockets and the sophistication to do a proper investment analysis.

But what about the middle of the market? Fourth Watch is investigating this space, particularly for possibilities to connect investors in the space between $100,000 to $500,000 - too big for most of the crowdfunding platforms, but a bit on the small side for more sophisticated investors. If you're interested in exploring this space further as an investor, or if you've got an established business in Africa seeking funding in that range, we'd love to hear from you. Or, if you've noticed some crowdfunding platforms operating in this space and focusing on African investments, please point them out to us in our comment section on this post.

Is DFID open for business?

People from the AidWatch/Easterly school of thought must be very excited by Justine Greening's (UK's Secretary of State for International Development) speech yesterday at the London Stock Exchange. She is advocating a much more businesslike approach to international aid by DFID.

In our opinion this is absolutely fabulous stuff, and we are big fans of Justine Greening. Looking forward to seeing new PPP development programs emerge from DFID!

Here are a few snippets from her speech:

"I’ve said from the word go in this job that Britain’s investment in International Development isn’t just the right thing to do –but it’s the smart thing to do too. I've been clear that I want to see our investment in the right places, on the right things, spent in the right way. So, I've started driving better value for money within DFID, by strengthening Ministerial oversight of business cases and contracts, and improving our supplier procurement. But I also wanted to take a closer look not just at how we go about our development work, but what that work comprises. Today I want to talk about why I will be shifting DFID’s work to include a much stronger focus on economic development and the steps we are going to take to get that strategy in place."
Fourth Watch Response: We particularly love the first sentence in this quote. Most (all?) developed countries spent exponentially more on military than on international development. Is this the ideal approach to achieve peace for our citizenry? We think the balance off.


"So, there’s a lot to do but there's a lot we're already doing. DFID's work on technology investments has already helped to unlock smart business investment in developing countries. Look at Vodafone and the hugely successful M-PESA mobile banking phone service. DFID match-funded Vodafone's initial investment  and there are now 17m users in Kenya and a third of Kenyan GDP is expected to pass through the M-PESA system. A mobile bank account essentially for millions who otherwise wouldn't have one. One that they can do business and trade with."
Fourth Watch Response: We love the concept behind this kind of public-private partnership. This is an excellent way for governments to leverage public spending and tap into the capital, skills, and efficiency of private enterprise.


"If you ask people in developing countries what they want, they’ll give you one top priority – it’s a job. It doesn’t matter whether you ask men or women, they give the same answer. People, wherever they are, want the opportunity to be financially independent, and to have the dignity of being able to provide for themselves and their family."
Fourth Watch Response: This is the part where the AidWatch types get really excited. So do we. 

"Firstly, reducing overall barriers to trade and investment – whether regulatory, infrastructure, legal or institutional. Secondly, unlocking the ability of entrepreneurs and business people in developing countries to themselves drive economic growth through their own businesses being more and more successful. Thirdly and critically, I believe it also means greater investment by business, and I want to see UK companies joining the development push."
Fourth Watch Response: Yes, yes, and yes.

To read the full text of the speech, click here:
Justine Greening Speech at the London Stock Exchange, 11 March 2013

Africa in one hundred years?

This morning I stumbled across an opinion piece on the Russian International Affairs Council's (RIAC) website entitled "Africa in one hundred years". I find the idea of predicting the socio-economic and political future of Africa five years or even one year from now to be an interesting exercise, so I felt I had to take a further look to see what bold projections the RIAC might dare to make about what the continent will look like a century from now.

Near the beginning of this article the author comments on the possibility of a multi-ethnic federalism as a solution to the chronic problems of political instability since independence, stating that  it is an "illusion... that in case of coincidence of these (*political and ethnic) boundaries there would be peace and order in Africa". He cites the Soviet example as evidence, and one could easily add the Yugoslav experiment to that list.

He goes on to cite several examples within Africa, suggesting that struggles over resource control may be a more likely cause of many recent conflicts, and that an ethno-centric view would be far too simple of a rationale.

Since I was originally drawn to the article by the promised one hundred year forecast, I was a little disappointed to find only minimal commentary on the future picture. The author's comments about the unfolding of a new resource colonialism and the subtle suggestion that the new colonial master would include the Chinese and Indians was certainly an interesting piece of speculation however.

Of the entire article, I found the concluding sentence contained the one thought that really grabbed my attention: "If multinational corporations and governments of the world's leading powers are able to agree on joint exploitation of African natural resources, it will be a great boon for Africans and for all the people of the planet." It would be fascinating to see research on how this could work as a way of preventing resource conflict in Africa in the century to come. Could a variety of joint ventures between American, European, Chinese, and other multinationals be a way of preventing resource-driven territorial neo-colonialism and of therefore ensuring peace for the continent? It's certainly interesting fodder for further reflection, research, and debate.

Link to the Article: Africa in one hundred years


Who/what is the RIAC?
** excerpt from the RIAC website about us page**  "Russian International Affairs Council (RIAC) is a non-profit membership organization. RIAC activities are aimed at strengthening peace, friendship and solidarity between the peoples, preventing international conflicts and promoting crises settlement. RIAC mission is to facilitate the prospering of Russia through its integration in the global world. RIAC is a link between the state, expert community, business and civil society in an effort to find foreign policy solutions."

Private Sector Cooperation in Public Sector Development Aid

Today I wish was in Washington D.C. to attend the launch event for the Center for Strategic & International Studies' (CSIS) newly released report entitled "Our Shared Opportunity: A Vision for Global Prosperity". The report is said to push for the US government's official development assistance (ODA) to work more closely with the private sector.

The report quotes stats from the Hudson Institute’s Index of Global Philanthropy and Remittances, which shows that the flow of capital investment from the private sector is now much greater than the flow of ODA; it says that 87 percent of capital flows to the developing world are private. The report also encourages viewing aid recipients rather as economic partners, and recommends that aid should be reoriented towards encouraging economic growth by partnering with private investors and building existing incentive programs.

William Easterly must be jumping with joy since the report seems to validate a great deal of the criticism of foreign aid that he detailed at length in his book "The White Man's Burden" over five years ago. Aid critics like Easterly have for years been calling for more businesslike approaches to development assistance. Of course this isn't totally new ground for CSIS either, as their report from just over a year ago entitled "Leading from Behind in Public-Private Partnerships" also identified that there is a huge missed opportunity in that governments do not leverage private partnerships as a force multiplier of their aid programs in any significant manner.

Perhaps this is about to change? Here at Fourth Watch we certainly hope so. Although we agree with Jeffrey Sachs' argument that ODA needs to be increased significantly, it is the Easterly/CSIS approach to delivery that seems to us to be the more effective method of deploying it. It will be interesting to see what media pickup comes in response to today's launch event, particularly in connection with the much-covered recent sequestration of the American government's budget.

Refit of Zambian Railways

It has only been a few months since Prof Clive Chirwa was appointed the managing director of the Zambian Railways Corp, and now he has come out with an announcement of an extremely ambitious plan to totally refit the rail system there in just three years. A few other facts jumped out at me from this announcement as being quite noteworthy:

- the timeframes are very short
- he proposes to use local Zambian labour and materials rather than foreign (particularly Chinese) workers as has been the case with some other recent infrastructure projects
- the proposal is for the project to make extensive use of private sector project financing

If he succeeds, the plan will have a massively positive impact on the economy of Zambia through job creation and improved links between resources and markets, and would also have solid environmental benefits through a major reduction on the current reliance on heavy truck transport and fossil fuels (new system to be electrified).

Read the full article here on Times of Zambia or allAfrica.com

But, is it too good to be true? Leave your comments here and let us know your thoughts!
(note - comments need to be approved by Fourth Watch before publishing and will appear within a day - unfortunately I must limit spam posts this way)

Fourth Watch: The Name

What does our name mean?

At the surface level, the term Fourth Watch is a reference to the Roman army's time-keeping system which divided the nightly duties for watchmen into four shifts, or "watches". The fourth watch was the last one of the night and typically ended with the watchman witnessing the approaching dawn. The fourth watch is therefore a duty which is filled with progressively increasing optimism - the evidence of the end of the shift approaching.  Already in the middle of the fourth watch the watchman can see the evidence that dawn is coming and eagerly looks forward to the beautiful colours that will soon fill the sky and begins to hear the singing of birds that share this joy. It is a name that captures our hope and optimism that a better future is approaching.

The fourth watch is just beginning. Poverty and injustice are rampant around the world, and many investors, corporations, and governments have turned a blind eye towards environmental damage caused by their activities. We see light on the horizon, however. The United Nations’ Principles for Responsible Investing are gaining traction among the world’s largest institutional investors, and impact investing is growing at an exponential rate. We are very excited to be a part of what we believe is a turning point in the history of global economic systems!