IBM Expanding Operations in Africa

In a wave of well-publicized recent announcements [Fortune, Voice of America, Forbes, MarketWire, MarketWire 2] IBM announced it will be greatly expanding its activities in sub-Saharan Africa in 2008. IBM’s plans include: (1) an $120 million increase in investment in Africa over the next two years; (2) an Africa Innovation Center housing a High Performance On Demand Solutions lab in Johannesburg; (3) hiring 100 new professionals to meet growing regional demand for services, global delivery, and software development; (4) donating a $1.5 million BlueGene/P supercomputer to the Center for High Performance Computing in Cape Town; and (5) a joint venture with CARE to create an Africa Financial Grid for microfinance institutions. IBM currently has offices in 20 African countries.

The Africa Innovation Center, scheduled to open in the second quarter of 2008, will provide advanced software development capabilities and access to high-end servers and storage equipment. The Africa Financial Grid will consist of a shared services and infrastructure model to help microfinance institutions expand into other services, such as micro-insurance, bill pay, credit scoring, and international remittances. IBM will design and manage the Grid’s technology platform and CARE will provide local resources and infrastructure. The BlueGene/P supercomputer will be hosted by the Meraka Institute, a nonprofit technology and economic development organization. According to Forbes, the supercomputer will be used for programs requiring extraordinary processing capability, such as modeling the local effects of climate change, identifying more efficient ways to process local minerals, and predicting the spread of infectious diseases. IBM also named Dr. Robert Mayberry as Vice-President, Emerging Markets, Sub-Saharan Africa.

Nigeria Anti-Corruption Campaign Suffers Major Setback

Nigeria’s law enforcement agency recently announced that it was reassigning Nuhu Ribadu, the current Chairman of the Economic and Financial Crimes Commission, to a remotely located training institute for at least a year. According to the New York Times, Ribadu “has risen to become one of the most powerful and feared figures in Nigeria.” His aggressiveness in combating government corruption have been lauded at home and by the West. Not surprisingly, his willingness to take on powerful Nigerian politicians has put him in a precarious position. The move to sideline Ribadu was quickly condemned by activists, including Nigerian Nobel Prize laureate Wole Soyinka, as a step backward in the effort to clean up Nigeria’s government. According to Soyinka, “it is the ruling party itself, the PDP, that continues to suffocate the nation in its folds of corruption, negating every attempt to rid her of this incubus, since that party has exhibited itself, again and again, as the very quagmire of corruption, nurtured on corruption, sustained by corruption and dependent on corruption for its very survival.”

The Business of Health in Africa

The Business of Health in Africa, a new study commissioned by the International Finance Corporation (IFC), surveys and analyzes sub-Saharan Africa’s rapidly growing private health care industry. The study was conducted by McKinsey & Company and largely financed by the Bill & Melinda Gates Foundation. The study notes that the private health care sector in Africa is surprisingly large and constitutes an important, diverse component of the region’s health care systems. The study estimates that total health expenditures in the region will increase from $16.7 billion in 2005 to $35 billion in 2016. In addition to chronicling the constraints facing the provision of health care in Africa, the study makes five key policy recommendations. The study urges stakeholders to: (1) develop and enforce quality standards, (2) foster risk pooling programs, (3) mobilize public and donor money to the private sector, (4) modify local policies and regulations to foster the role of the private sector, and (5) improve access to capital. In conjunction with the release of the report, the IFC announced that it is launching an initiative to mobilize up to $1 billion of investment and advisory services support over the next five years. IFC’s strategy includes creating an equity investment vehicle for health care entrepreneurs and businesses, partnering with local financial institutions to improve access to long-term debt for health care organizations, and supporting country assessments and a biannual report on the climate for health care investments.

World Bank and China to Cooperate in Africa?

A Financial Times story on December 18 reported that the World Bank and China have agreed to undertake joint development projects in Africa. Robert Zoellick met with the Chairman of China’s Export-Import Bank during a recent visit. It remains unclear, however, whether the leaders of the two banks will succeed in moving from vague statements of their desire to cooperate to true cooperation in development lending. Zoellick’s comments were also covered in an article by the Associated Press — China Sees Rising World Bank Influence.