Visualizing Africa’s Free Trade Ambitions
A united African continent working towards common goals would be a major force on the global economic stage.
To this end, nations in the region have been working towards an ambitious plan to create the world’s largest trade area. The Gambia recently became the latest country to ratify the African Continental Free Trade Area (AfCFTA), helping the agreement reach critical mass to move forward.
Today’s graphic helps put the region – and the status of AfCFTA – into perspective.
The Patchwork Problem
One key to unlocking the region’s economic potential is making it easier for Africa’s 55 countries to trade with one another.
Currently, Africa is a patchwork of regulations and tariffs, and trade between countries has suffered as a result. For example, only 10% of Nigeria’s annual trade activity is with other African countries. This is a surprising given the country’s dominant economic standing and location firmly in the center of the continent.
As a whole, Africa’s intra-continental trade level hovers at just around 20%, while nations in Europe and Asia are at 69% and 59%, respectively. Clearly, there is a lot of room for growth.
What is AfCFTA?
AfCFTA is the biggest free trade agreement since the establishment of the World Trade Organization.
The objective of the agreement is to create a single continental market for goods and services, with free movement of business people and investments.
Last year, 44 African leaders signed an agreement to ratify AfCFTA, with half that number needed to move the agreement forward. Earlier this week, The Gambia was the 22nd country to announce that its government has ratified the agreement, meeting the threshold to officially put the wheels in motion.
We have witnessed a historic moment for the African Continent. AfCFTA is now set to become operational within
the month, creating a single continental market for goods
– Mark-Anthony Johnson, CEO, JIC Holdings
The good news for the agreement is that many of Africa’s largest economies – including Egypt and South Africa – are already on board. There is, however, one significant holdout.
The Elephant in the Room
Even though the threshold for pushing AfCFTA forward has been reached, Nigeria’s lack of commitment is still a major blow to the strength and credibility of the agreement.
Nigeria’s situation is complicated. The country’s economic prospects are bright, and Lagos is on a trajectory to become the world’s largest city over the next few decades. On the other hand, there is fierce opposition from labor unions, and the country is home to largest concentration of people living in extreme poverty in the world.
[AfCFTA is] an extremely dangerous and radioactive
neo-liberal policy initiative.
– Ayuba Wabba, President of NLC, Nigeria’s largest labor union
While the majority of African nations appear to be on board with the plan to enact AfCFTA, it remains to be seen whether Nigeria comes along for the ride or decides to go it alone.
The Big Five: Largest Acquisitions by Tech Company
The ‘Big Five’ tech companies are rapidly reshaping the global tech landscape with their acquisitions, devouring any competitor who gets in their way.
The Big Five: Largest Acquisitions by Tech Company
The Big Five tech giants, or “FAAMG”—Facebook, Amazon, Apple, Microsoft, and Google (Alphabet)—have a combined market capitalization of over $4 trillion.
These powerful tech behemoths often devour the talent, technology, or entire businesses of aspiring competitors. Given their financial weight, mergers and acquisitions have become a key tactic in maintaining their strong grip on tech supremacy.
Today’s Chart of the Week explores the world’s most powerful tech companies and their biggest acquisitions to date.
Which Acquisitions Were a Success?
While these tech giants may have had big aspirations for these exceedingly large deals, they have mixed success rates.
Microsoft made its big move 2016 to buy LinkedIn for $26.2 billion, and it’s the most sizable acquisition by any of the Big Five tech companies.
Microsoft’s 5 Biggest Acquisitions:
|LinkedIn (2016)||$26.2 billion||Social Media|
|Skype (2011)||$8.5 billion||Telecommunications|
|GitHub (2018)||$7.5 billion||Software|
|Nokia (2014)||$7.2 billion||Telecommunications|
|aQuantive (2007)||$6.3 billion||Marketing|
The LinkedIn deal was made due to the synergy between the two companies’ offerings, and Microsoft’s desire to gain access to LinkedIn’s 575 million members.
However, not all of Microsoft’s acquisitions have been as successful, such as its 2014 purchase of Nokia’s Devices & Services business for $7.2 billion. This seemed like a smart move at the time, considering the Finnish company held 41% of the global handset market.
Yet, Microsoft sold the asset for a mere $350 million just two years later. Microsoft shifted its strategy and exited the feature phone market, choosing to focus on a narrow, niche market for their hardware.
Amazon has closed more than $20 billion in acquisitions and investments since 2017. This includes the purchase of Whole Foods, which Amazon bought for $13.7 billion, and is the company’s largest acquisition to date.
Amazon’s 5 Biggest Acquisitions:
|Whole Foods (2017)||$13.7 billion||Retail|
|Zappos (2009)||$1.2 billion||Retail|
|Ring (2018)||$1.2 billion||Technology|
|PillPack (2018)||$1 billion||Pharmaceuticals|
|Twitch (2014)||$970 million||Social Media|
From purchases to bolster the AI of smart assistant Alexa, to Wi-Fi enabled doorbell Ring, recent additions clearly show the company intends to cement its presence in people’s homes.
After acquiring Whole Foods, Amazon began offering store discounts to Prime customers, in an attempt to bundle its home offerings and provide a more holistic customer experience.
Alphabet has made several daring moves into the hardware and data science sectors. The company’s biggest acquisition was Motorola, which it bought in 2012 for $12.5 billion.
Alphabet’s 5 Biggest Acquisitions:
|Motorola (2012)||$12.5 billion||Telecommunications|
|Nest (2014)||$3.2 billion||Technology|
|DoubleClick (2007)||$3.1 billion||Marketing|
|Looker (2019)||$2.6 billion||Software|
|YouTube (2006)||$1.7 billion||Social Media|
However, the purchase of Motorola was a bet that didn’t pay off. Alphabet sold off much of Motorola’s assets for less than $3 billion in 2014, a little less than two years after it had originally acquired it.
Alphabet continues to consolidate its acquisitions in order to simplify its organizational structure. DoubleClick, acquired in 2007, merged with Google Analytics 360 Suite under the Google Marketing Platform—making it easier for marketers to access their metrics using one platform.
Out of the Big Five companies, Apple has the fewest acquisitions over $1 billion. Its largest purchase was for Beats Electronics, which it acquired for $3 billion in 2014.
Apple’s 5 Biggest Acquisitions
|Beats (2014)||$3 billion||Music|
|Dialog Semiconductor (2018)||$600 million||Manufacturing|
|Anobit (2011)||$500 million||Manufacturing|
|Shazam (2017)||$400 million||Music|
|NeXT Computer (1996)||$400 million||Technology|
Apple’s increasing music streaming efforts have been evident, with the acquisition of Shazam three years after it purchased Beats Electronics.
In an intriguing recent turn of events, Apple recently announced it will acquire the majority of Intel’s smartphone modem business. This $1 billion deal will allow Apple to build all of its devices in-house, and better prepare the iPhone for the upcoming 5G push.
Facebook’s largest acquisition has been WhatsApp Messenger, which it purchased for $22 billion in 2014. The WhatsApp acquisition is the second largest of the Big Five, following Microsoft’s LinkedIn purchase.
Facebook’s 5 Biggest Acquisitions:
|WhatsApp (2014)||$22 billion||Social Media|
|Oculus (2014)||$2 billion||Technology|
|Instagram (2012)||$1 billion||Social Media|
|LiveRail (2014)||$500 million||Marketing|
|Onavo (2013)||$200 million||Analytics|
Aside from absorbing any competitors who encroach on Facebook’s turf—such as WhatsApp and Instagram—Facebook’s takeovers have been aimed at venturing into uncharted territory. The acquisition of virtual reality manufacturer, Oculus, is evidence of Facebook’s bet on virtual reality as the future of engagement.
“After games, we’re going to make Oculus a platform for many other experiences. Imagine enjoying a court side seat at a game, or studying in a classroom of students and teachers all over the world —just by putting on goggles in your home.”
Predicting the Next Shift
The Big Five are some of the most influential companies in the world today.
Beyond rapidly reshaping the global tech landscape, these acquisitions provide important context on how tech companies consolidate power—and, more importantly, what will fuel their next phase of growth.
The Most Miserable Countries in the World
The annual Misery Index ranks the most and least miserable countries, based on four economic factors—unemployment, inflation, lending rates, and GDP growth.
The Most Miserable Countries in the World
Some people believe that happiness comes from within. In the world of economics, however, happiness may be more linked to quantitative factors such as inflation, lending rates, employment levels, and growth in gross domestic product (GDP).
This week’s chart uses data from Steve Hanke of the Cato Institute, and it visualizes the 2019 Misery Index rankings, across 95 countries that report this data on a consistent basis.
The index uses four key economic variables to rank and score countries:
- Lending rate
- Unemployment rate
- GDP per capita growth
Here are the Misery Index scores for all 95 countries:
|Rank||Country||Contributing Factor||Misery Index Score|
|#4||🇧🇷 Brazil||Lending Rates||53.6|
|#7||🇿🇦 South Africa||Unemployment||42.0|
|#8||🇧🇦 Bosnia and Herzegovina||Unemployment||38.2|
|#9||🇪🇬 Egypt||Lending Rates||36.8|
|#10||🇺🇦 Ukraine||Lending Rates||34.3|
|#23||Costa Rica||Lending Rates||21.7|
|#26||Dominican Republic||Lending Rates & Unemployment||20.3|
|#29||Papua New Guinea||Lending Rates||19.2|
|#35||Sri Lanka||Lending Rates||16.0|
|#40||Trinidad & Tobago||Lending Rates||14.7|
|#41||New Zealand||Lending Rates||14.4|
|#62||United Kingdom||Lending Rates||9.6|
|#68||United States||Lending Rates||8.7|
|#71||Hong Kong||Lending Rates||8.3|
|#87||Czech Republic||Lending Rates||5.0|
To calculate each Misery Index score, a simple formula is used: GDP per capita growth is subtracted from the sum of unemployment, inflation, and bank lending rates.
Which of these factors are driving scores in some of the more “miserable” countries? Which countries rank low on the list, and why?
The Highest Misery Index Scores
Two Latin American countries, Venezuela and Argentina, rank near the top of Hanke’s index.
1. Vexation in Venezuela
Venezuela holds the title of the most “miserable” country in the world for the fourth consecutive year in a row. According to the United Nations, four million Venezuelans have left the country since its economic crisis began in 2014.
Turmoil in Venezuela has been further fueled by skyrocketing hyperinflation. Citizens struggle to afford basic items such as food, toiletries, and medicine. The Cafe Con Leche Index was created specifically to monitor the rapidly changing inflation rates in Venezuela.
Not only does Venezuela have the highest score in the Misery Index, but its score has also seen a dramatic increase over the past year as the crisis has accelerated.
2. Argentina’s History of Volatility
Argentina is the second most “miserable” country, which comes as no surprise given the country’s history of economic crises.
The 2018 Argentine monetary crisis caused a severe devaluation of the peso. The downfall forced the President, Mauricio Macri, to request a loan from the International Monetary Fund (IMF).
To put things in perspective, this is the 22nd lending arrangement between Argentina and the IMF. Only six countries have had more commitments to the international organization, including Haiti (27) and Colombia (25).
The Lowest Misery Index Scores
The two countries with the lowest scores in the index have one thing in common: extremely low rates of unemployment.
1. Why Thailand is the Land of Smiles
Thailand takes the prize as the least “miserable” country in the world on the index. The country’s unemployment rate has been remarkably low for years, ranging between 0.4% and 1.2% since 2011. This is the result of the country’s unique structural factors. The “informal” sectors—such as street vendors or taxi drivers—absorb people who become unemployed in the “formal” sector.
Public infrastructure investments by the Thai government continue to attract both private domestic and foreign investments, bolstering the country’s GDP alongside tourism and exports.
2. Hungary’s Prime Minister Sets the Score
Hungary is the second least “miserable” country in the world according to the index.
In 2010, Prime Minister Viktor Orbán implemented a workfare program which diverted menial tasks to thousands of job seekers. Over the same period that the program ran, the national unemployment rate fell from 11.4% to 3.8%.
Orbán won a controversial fourth term in 2018, possibly in part due to promises to protect the country’s sovereignty against the European Union. Despite accusations of populism and even authoritarian tendencies, the Prime Minister still commands a strong following in Hungary.
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