Author: Laurence Sithole

• Shares of Tesla the pioneer of electric vehicles fell spectacularly in 2022. This trend was the same for auto shares which list substantial amounts of value during the year.
• Tesla despite its anemic showing in terms of share price performance managed to deliver a record number of EVs.
• The EV company increased production of its products by as much as 40%.
• This impressive development by Tesla failed to excite the market which hammered the share price resulting in the EV company shedding 64% of its value in 2022.
• Notwithstanding the skepticism from the market Tesla has been making positive strides with its Gigafactory initiatives.
• Africa has been the focus of the Gigafactory initiatives by Tesla. A Gigafactory is a massive manufacturing facility that aims to speed up and scale up the manufacture of electric vehicles.
• The Gigafactory concept will contribute substantially to the economic wellbeing of African countries where Tesla

The continent as always, has great promise. This was the unanimous conclusion from the just-ended World Economic Forum, which is traditionally held at the Swiss resort town of Davos every year. However, significant obstacles stand in the way of the continent reclaiming its mantle of economic growth.

• The World Economic Forum held in Davos every has just ended. This year’s conference ran under the theme of Collaboration in a fragmented world.
• Africa was on the agenda of the World Economic Forum as is frequently the case.
• Discussions on Africa at the conference mainly centred on how the continent can regain its growth trajectory.

The World Economic Forum (WEF) identified four principal factors causing economic headwinds in Africa and will stall its economic growth as a continent unless dealt with. The so called “stallers” of Africa’s economic growth are and will remain as conflict, COVID, climate, and cost of living.

WEF…

• Edwin Moyo, Zimbabwe's horticulture industry magnate flies under the radar. He is unlike your typical successful Harare businessman. He is not bashful about his wealth or his influence and yet he is very influential.
• The entrepreneur made his mark in a number of ventures most notably horticulture. His success culminated in his operations at a farm in Zimbabwe's eastern highlands called Kondozi.
• At its peak, Edwin Moyo's Kondozi horticulture venture employed as many as 15,000 people and supported the local economy of Mutare.
• Kondozi exported fresh produce as far as Europe and Edwin Moyo managed to secure long term supply contracts with leading United Kingdom retailers like Tesco.
• Edwin Moyo's experience in Zimbabwe is very telling of the culture of that country to persecute and to hound its most successful businesspeople and entrepreneurs.
• Kondozi is one of the farms that was forcibly taken over by the government under the guise

• Africa is host to some world class companies that investors should consider adding to their portfolio in 2023. However, the investment climate has been choppy at best and investors need to be shrewd when it comes to their portfolio investment decisions especially in 2023.
• The investment climate was at the beginning of the year quite optimistic with the world finally putting COVID and its pandemic behind it. Investing in African companies would have been in a no-brainer given the circumstances around the world at this time.
• Things started to go side ways when Russia invaded the Ukraine and set in motion a chain of events which have profoundly altered the global investment climate and flow if investment capital which would otherwise be directed to the top African companies.
• The United States dollar was resurgent in 2022 nearing parity with the Euro and the Pound Sterling as the cost of living

In terms of the fiscus, South Africa expects to run a deficit of -4.1 per cent in 2023, however, the deficit is expected to narrow for the next 3 years closing 2026 at -3.6 per cent. This demonstrates significant fiscal consolidation.

Over the next 3 years the South African government expects to consolidate its public finances and reduce its deficit by inter alia increasing revenues and or managing or containing costs. According to Investec, “The current fiscal year (2022/23) has seen a substantial boost to nominal (actual) GDP due to high inflation, which has eased both the fiscal debt and deficit projections as a per cent of GDP, although does not boost real GDP, which is the measure of the country’s growth and has the distorting effect of inflation removed.”

Among countries in Africa, South Africa is getting its public financial act together. The country is paying down its debts,…

African countries looking to anchor their currencies on either gold, or a combination of gold, precious metals, and other minerals would need to start with legislation which would make it legal for the governments of those countries to redeem paper currency with either those minerals or a derivative of those minerals.

Zimbabwe in late August began an initiative where it sold actual gold coins to its citizens which had been minted by that country’s central bank. This move was initiated to halt the slide of the currency on the parallel and official markets. This county’s policy so far has been successful in slowing down the trend of inflation which had begun to run amok.

It would be remiss to attribute the slowdown inflation to the gold coins. The country dramatically tightened its monetary policy by increasing interest rates to over 200 per cent in May 2022 and temporarily banned commercial…

Eritrea’s debt stands at 175 per cent of its GDP.

This is very high for the agriculture-based economy.

Eritrea is an outlier on the African continent. Unfortunately for the Horn of Africa country, it is not for good reasons. The nation has held on to a counterproductive form of government which has retrogressed the country economically and kept its people in poverty.

The country maintains a political system which is largely autocratic in nature and is not a democracy by any stretch of the imagination. The country was at war with Ethiopia and only recently managed to broker a peace deal which is no more than a truce to fight another day.

• Eritrea has a sovereign debt load that is nearly double the size of its GDP according to the World Bank and the IMF.
• The country has an archaic system of governance and is for that reason a negative

Why is agriculture so important? The World Bank estimates that “Healthy, sustainable, and inclusive food systems are critical to achieving the world’s development goals. Agricultural development is one of the most powerful tools to end extreme poverty, boost shared prosperity, and feed a projected 9.7 billion people by 2050.

Growth in the agriculture sector is two to four times more effective in raising incomes among the poorest compared to other sectors. Agriculture is also crucial to economic growth: it accounts for 4% of global gross domestic product (GDP) and in some developing countries, it can account for more than 25% of GDP.”

Agriculture not only eliminates hunger, but its support and success will lead to the attainment of the world’s development goals, end poverty, and boost shared prosperity. CGAP, which published an article about “The Role of Financial Services in Reducing Hunger”, states that for the majority of the 1.4…