globalEDGE Blog - By Tag: kenya

With climate change exacerbating inclement weather and environmental norms across the globe, experts predict an increase of as much as 7 degrees Fahrenheit in global temperatures by the end of the century. To help quell the rapidly rising temperatures, initiatives are pouring millions of dollars into new geoengineering projects worldwide.

Almost every large company in the world has used fossil fuels at some point, whether at a federal level or a state level. Restrictions are being placed on how certain corporations handle their carbon footprint. While some companies have pledged toward a more carbon-neutral future, reaching those sustainability goals takes time, effort, and money. This has led to a new industry solely based on carbon dioxide extraction from the atmosphere. The carbon capture and storage industry is on the rise, with Fortune 500 companies investing millions into reducing their carbon credit and billionaires launching their start-ups in the sector.

Human interaction has historically been essential for the education of all kinds. As a result of the COVID-19 crisis, schools, businesses, and others have scrambled to find solutions to continue growth in a time of heavy restrictions.

Sustainability has been heavily talked about in media around the world. Especially the past few decades as scientists warn about the environmental impacts of human acts. As phrases of “global warming” and “species extinction” surface, people are starting to realize the impacts of human activities. Despite the common notion that sustainability has only been a concern in the past few decades, the history of this concept goes back further in time.

Have you ever gotten into an Uber or a Lyft and expected either a good or bad experience? This is because it is a gig economy company. This past week, Uber, Lyft, and DoorDash have almost guaranteed approval on Proposition 22, which will change the way that these companies expand and treat their workers.

This is the fifth post in a five-part blog series focused on the energy industry.

The future of energy is often discussed in the news.  Many publications will say that the energy market’s future rests in one form or another but the future of the energy industry whole is difficult to predict because much of the future of energy is rooted in the policies of politicians. However, the Earth is not yet close to running out of these nonrenewable fuels so while there will be a need to fully replace the use of fossil fuels in our world at some point; running out of fossil fuels is not really the most pressing need at this time. 

In 2012, the UK-based oil exploration company, Tullow Oil, discovered oil in Kenya's northwestern Turkana region. Over four years later, the country is now announcing its plans to go forward with the production of crude oil.

Islamic finance presents an interesting contradiction between religion and modern economics. The world of finance is in large part built on the premise of interest. The debt market now dwarfs the equity (stock) market, and a majority of debt products inherently carry some form of interest. The world of Islam, however, strictly forbids usury, or the practice of charging interest. Islam is also the world’s second largest religion with over a billion adherents, which makes it impossible for its practitioners to not participate in the world of finance. This seemingly huge dilemma is solved by the practice of Islamic finance. Bridging the gap between religion and business, Islamic finance is quickly growing in both size and importance.

When commodity prices tumbled last year, economists worldwide forecasted a steep decrease in GDP growth for many African countries. For decades, the continent has been worryingly dependent on commodities to power economic growth. So when prices collapsed, economics would also theoretically nosedive. While this was true of some nations, others managed to weather the storm. The dichotomy is most illustrated by the stark differences between the Sub-Saharan and East African regions.

When a business expands into a new international market, many obstacles and uncertainties stand before it. Although Africa is the fastest-growing continent today, managers in the region must deal with a variety of questions in order to achieve continued growth. In a market that has a volatile history like Africa, managing uncertainty effectively has been a critical aspect for many companies. International business managers also deal with many uncertainties as regulatory differences and political disputes are common when a company operates in several markets. Analyzing how managers in Africa deal with uncertainty can provide us with great insight on how to successfully manage an international business.

While it is no secret that Sub-Saharan Africa has been plagued with poor infrastructure throughout the region’s history, the region’s economic prospects and investment opportunity just took another major hit. On August 7th, a massive fire damaged much of Kenya’s main international airport, Jomo Kenyatta International Airport, causing the airport to close indefinitely with no flights arriving or departing since the blaze was first reported. What made the fire so devastating to the airport was that the Nairobi County fire department did not have a single working fire engine, due to an auction last month where three of their engines were sold in order to pay a $1,000 USD repair bail, which local papers called a “disgrace of biblical proportions.” Despite the physical damage done to Kenya’s major airport, the destruction caused by the flames is unfortunately only the tip of the iceberg when it comes to the economic havoc that this fire most likely will unleash upon developing Sub-Saharan Africa.

Over a decade of recurrent high energy prices has prompted Kenya to look beyond traditional energy sources.  The traditional energy supply line in Kenya is unstable and has been for many years, which has caused consistently high prices that will unlikely subside.  Green energy firms are emerging and have been largely successful thus far because of the increasing demand for alternative energy sources.

Africa is the second largest mobile phone market in the world. Does this fact surprise you? Probably, but Africa is expected to reach over 700 million mobile subscribers in the next year. Not only is the African mobile market large in size, it is also the fastest-growing on the planet as well.  This provides an abundance of opportunity for investors, technology and mobile companies, and service providers.

Most African economies are known for their valuable commodities like oil, copper, and gas. But as of late, countries in Africa are adding a new focus to their economies with technology innovation. Countries throughout the continent have acknowledged technology as a key component in the battle to boost prosperity. This has sparked a technology revolution in a continent with high ambitions.

Businesses and countries alike are finding new ways to protect the environment by reducing emissions of harmful pollutants. One of these ways is a market-based approach called carbon trading which provides economic incentives for business firms that limit their output of carbon emissions. These carbon trading markets are beginning to form all around the world and the country of Kenya plans to launch Africa’s first carbon exchange.

As globalEDGE has discussed in the previous posts for this month’s blog series, not only are frontier markets growing extremely fast, they also have a lot of systematic risks. These risks can range from extremely prohibitive government regulations to a communist run government that feels it’s appropriate to expropriate private assets when it deems necessary. To transition to a stable growing economy these countries must remove these risks and increase its population’s education and consumption. These will create sustainable investment opportunities and the increase in consumer spending will continue to fuel economic growth.

A lot of activity has been taking place in Africa lately.  The World Cup has been drawing constant attention to Africa, and recently five east African countries made history by forming a common market called The East African Community (EAC).  Kenyan President Mwai Kibaki launched the EAC this week with Kenya, Tanzania, Rwanda, Burundi, and Uganda all agreeing to take part in the effort. This agreement will better allow people, products, and capital across borders, leading to improved trade and employment opportunities. 

A recent story by BusinessWeek describes the value of a country focusing on the education of its female populace.

Some interesting statistics:

- When a girl in the developing world receives seven or more years of education, she marries four years later, on average, and has 2.2 fewer children.

- An extra year in primary school statistically boosts girls' future wages by 10% to 20%, and every additional year a girl spends in secondary school lifts her income by 15% to 25%. The size of a country's economy is in no small part determined by the educational attainment and skill sets of its girls.

- Young women have a 90% probability of investing their earned income back into their families, while the likelihood of men doing the same is only 30% to 40%.

- A girl's school attainment is linked to her own health and well-being, as well as reduced death rates: For every additional year of schooling, a mother's mortality is significantly reduced, and the infant mortality rate of her children declines by 5% to 10%.

The latest event in a recent upsurge in pirate activity off Africa’s coast was also the biggest attack yet. A Saudi Arabian supertanker carrying $100 million worth of oil was commandeered by pirates 450 nautical miles away from the Kenyan coastline. This attack was unprecedented in both the size of the target and its distance away from shore, and as such represents a higher level of boldness on the part of the pirates.