An Economist, Dambisa Moyo has challenged African countries including Zambia to ensure that they acquire credit ratings and enhance the ease of doing business to enable them attract more investors.
Dr Moyo, who is author of the world renowned book ‘Dead Aid’, said it is sad that only 19 African countries are currently rated and that many African countries are doing badly on the International Transparency corruption perception index.
She said this when she addressed the 3rd Common Market for Eastern and Southern Africa (COMESA) Investment Forum during a formal discussion hosted by Bloomberg Anchor Maryam Namazee.
Dr Moyo said investors usually ask firstly whether a country is rated or not. She said credit ratings are not expensive and it is important for countries to consider acquiring them if they want to attract more investors.
Zambia is in the process of resuming its efforts to acquire a sovereign rating after earlier efforts were abandoned in the wake of the global financial crisis. Bank of Zambia governor Caleb Fundanga said Zambia has resumed the process of acquiring a sovereign rating.
Dr Moyo told the gathering that many African countries are also doing badly on the World Bank’s doing business index.
Dr Moyo, a Zambian, previously worked at the World Bank in Washington, DC. She is currently a member of the Boards of Lundin Petroleum and SAB Miller. She said that despite going through a genocide 15 years ago, Rwanda is now ranked as the most improved in the 2009 World Bank’s doing business report.
She said if African countries want to attract investments, they should be mindful that they are competing with other regions worldwide and should ensure they perform well on the corruption perception index as well as reduce the cost of doing business.
Dr Moyo said that whether African countries are really corrupt or are just perceived to be, the perception on the Transparency International Index matters to investors.
The forum, which ended on Tuesday, was attended by over 500 people, including businesspersons and policy-makers such as ministers, from 19 COMESA member states. The forum discussed investment opportunities in the region.
[Zambia Daily Mail]
The idea of a credit rating is very good and I am happy Zambia has resumed the process of acquiring a sovereign rating. The advice Dr. Dambisa Moyo has given is very good.
Whereas what Dambisa is saying is very true,it is also important to note that credit rating organisations such as Fitch,Moody’s and Standard & Poor have never had any interest in carrying out survey in Sub-saharan Africa beyond South Africa.Dambisa should use her influence and challenge these organisations to extend their services to the all of Africa than painting a gloomy image in their offices in the US.The last time I checked,Zambia was ranked 131 in the world(1997) and somewhere 19th in Africa.
Lets also look at this article… please google -Cheap borrowing under threat as S&P sounds alarm over Britain’s ballooning deficit- Dr Moyo’s advice may sound pleasant but it has its own set backs especially if we have people and opposition leaders who have open mouths they cant control.
How refreshing to see something like this make the news. Though I may not agree entirely with what Dambisa proposes in her book (in part because I have not read it entirely), I must say I would take her ideas for where African nations should be heading, over cheap politics any day.She, I think is a reflection of what investment in our own citizens can produce. She trully has a brilliant mind and her background, it would seem has allowed her to understand African economics at a level that I can only admire. Thank you to Lusaka Times for this wonderful suprise.
Dont want to score cheap political points but I think the point she makes about attracting investment is very pertinent at the moment. Zambia is currently viewed as a low risk investment destination which is quite an achievement given the negative portrayal of the African continent in general which means that those seeking high office should be very careful in maintaining the positive image of the country if they are to have realistic opportunities of delivering the promises that they make to the electorate.
#5 Shimwalule you are spot on!
Good Morning
Having stayed away from the ugly maelstrom of bickering that I was caught up in early this week, it’s great to be back and read some progressive ideas coming from serious-minded Zambians.
Whether a positive Trade rating can be a powerful instrument for African development or will guarantee long-term stability could be argued, but at least it is one way of exposing highly corruptible governments. On the other hand, I think that international corruption can only exist on a reciprocal basis (i.e. rich countries corrupt the poorer ones) and so these ratings can only make sense if they are backed by global fair-trade agreements.
Its good for Ms Moyo to begin helping tackle some of these problems including the problem relating to the time from registering an investment to actual production. The world bank chief says it takes close to 400 days. Dambisa refereed to it in her book which unfortunately is full of imaginary conclusions & unwarranted condemnation of aids. Her contributions are so great but hidden in a book that few would want read.
Its good for Ms Moyo to begin helping tackle some of these problems including the problem relating to the time from registering an investment to actual production. The world bank chief says it takes close to 400 days. Dambisa refereed to it in her book which unfortunately is full of imaginary conclusions & unwarranted, blind condemnation of FOREIGN AID. Her contributions are so great but hidden in a book that few would want read.
#8 Big Mule. I disagree with your statements regarding her book. Why do you, a Zambian also have to onto the band wagon of the West / devloping Countries/ Donors and their scholars who viciously attacked her on many global fora set-up to discuss and many cases challenge her thesis?? She may have erred on 1 or 2 things, but why should you also PULL HER DOWN (PHD) when she’s really flying our Great Eagle & pride of 14m Zambians very high!! I was watched one live programe where she debated her book & proposals with Denmark’s Premier. U know everyone one marvels at how a ZAMBIAN girl born in ZAMBIA could achieve what she did? You are Zambian? I smile. So lets support her please. On the topic at hand she’s right we need to work on TI indexes & not what we think we look like.
sorry for my bad English. “TI indices”
Good point, and good to see our sister and kindred contributing positively at high levels.
Credit rating will be good for Zed. It will offer accurate information on Zed’s trustworthiness. Just like at personal level, in the UK, if you there are no records on you by credit reference agencies, anyone wanting to lend you money will not know how trustworthy you are. They will assume the worst case and charge you teh highest interest rates. Your credit reference rates you.
Similarly, zambia and Zambian companies are charged high interest rates as it’s difficulty to know their credit worthiness in the absence of CI.
Challenge is, we’ll need politicians who dont destabilize the country. We need lower lending interest rates to boost our economic growth. We need cheaper capital.
Just after only one pulication/book, she is already a ‘Renowned Zambian Author’!
# 13 Your comment is a clear indication that u are suffering from the PHD syndrome.Ps have it cured before its too late…
Dambisa, you’re wasting your breath on these MMD morons. they have no ears to hear, no eyes to see, no brians for common sense. We need sisters like you to take up the challenge of running this country. How about that?
# 13, Dambisa is the most famous Zambian author on earth. Come on, support your sister, wena, man! Wa hao ki wa hao.
Big Mule
Please this young lady has achieved great things,World Bank and then this Book. Lets not take it away from her. I suppose you have children as well capable of achieving the same great things if only you can encourage them to do so. I agree to constructive criticism of her pleasant sounding advice yet she also knows very well that once you are graded then WHAT? Allow every jim and Jack to borrow recklessly?
11 & Digga & Mwamoneni I’m perfectly with you in exalting Dambisa’s new energy in giving this timely advice. She has a good standing because of her book that is over claimed by few westerners pleased to see an African lady bashing Africa. Lame as her fame maybe, we still need her input in crediting this idea of trade ratings. Many Zambians have said this already so many times but her position is unique because those she praised in her book are the same westerners with imminent influence on our economy. In this fora and on this thread, let us not discuss how detrimental, un-precise, selective, biased and unfair her book is.
@ Big Mule you sound like that buff.ion that always comments in the zambians in the UK magazine dr. Mulenga. @ youthful citizen I was going to rip your shared typing to shreads then I got hold of you alluding to the fact that you did not read Dr. Jewel of the Nile Dambisa’s book in it’s entirety.
Dambisa’s arguments and recommendations, which i agree with, are based on the premise that we move away from begging and start working for our development. “Free” money in the form of grants has failed to deliver development because by its nature – no one truly accounts for it. But, she argues, if we worked for this money by borrowing favourably (i.e. with good credit rating) we will take work hard to repay this money by investing in development.Defaulting is quite costly hence the motivation to invest wisely. Aid is charity and it is something we shouldnt be proud of.
#7 I admire your thought process brother. Corruption is indeed not only African made in most cases as it has support from the western world. If Africa was less corrupt and functional, most of the European countries will be much poorer and that’s a fact in economic terms. For someone to gain there has to be a loser. Let us think outside the box and not be perpetual losers.
19 @Knowledge and Wisdom, I am respectful of all the input(facts and all) that went her book surpassing many a master’s thesis requirements. The disastrous conclusion is what I detested. I believe even her will change as she matures and continues to work on the side of Africans as she has started to do now. Her transformation from a wall street monger to a positive contributor that understands Africa’s socio/cultural history is very apparent here and its what I celebrate! No am not Dr. Mulenga.