Politics gets in way of African ICT Achievers Awards

On Saturday evening I attended the African ICT Achievers Awards and for the most part was quite glad that we were congratulating ‘Africans’ for putting every effort in to develop the sector. This is especially so when many states have only recently realised the need to provide cheap and accessible telecommunications, which means many of the tools required to create a successful ICT sector are not in place yet.

So seeing Glory Mushinge, a journalist from Zambia dedicated to ensuring more people understood what ICT was about, even if they didn’t necessarily have access, win an award for Excellence in ICT Journalism in Africa was an absolute pleasure. However, I had to grit my teeth when the award for Top Public Sector CIO in Africa went to Kgabo Hlahla of the South Africa Department of Home Affairs (DHA). A website that isn’t exactly user-friendly is a common feature with government sites, however, the reason for the teeth gritting stems from a small device called the telephone; a device quite fundamental to ICT development.

Last week I called several DHA offices. Calls were either not answered, or when they were, were ‘transferred’ to someone who then didn’t answer. Although, auto-answering services and voicemail worked beautifully. This is a serious problem. How can a gentleman who heads a department that can’t even answer phones, quite a basic element to the ICT sector, win the accolade of being Africa’s best chief information officer? ICT use doesn’t appear to be particularly stretched either on the website, which could be used to allow people to make ‘free’ phonecalls to the department over the Internet using VoIP, not to mention providing addresses (with maps) of all the offices in a particular region.

I don’t for a second think that the rest of Africa’s CIO’s have faired this poorly, which brings me to a further problem I had with the African ICT Awards: Only a few countries outside South Africa were represented. If we are going to congratulate ‘Africa’, then we need to make sure that we know what the whole of Africa is up to.

Sticking with the trend of acknowledging South African companies, Sentech and Arivia.com both won awards. The South African signal distributor’s CEO Sebiletso Mokane-Matabane was named Top ICT Business Woman in Africa 2006. While she may have done many other things to deserve the accolade, Sentech reported a net loss of R74mn ($10.3mn) for the year to March from a loss of R68.8mn the previous period, partly because of the company's inability to win market share from competitors in the wireless broadband market. There is nothing notable about this.

Arivia.com won the award for Top ICT Company in Africa, yet their website doesn’t work properly in Firefox, a free webbrowser and Internet Explorer’s biggest challenger. Given that part of the difficulty of developing a vibrant ICT sector in Africa is the cost of software licenses, surely the top company would make sure that its website was at least compatible with open source alternatives?

The final insult, to those who deserved awards, came when South Africa’s Minister of Communications, Ivy Matsepe-Casaburri, won a Nepad special mention award for her work in driving ICT development on the continent. The gentleman sitting next to me was equally bemused by the prospect of this saying: “That’s politics, but perhaps she got it for driving Africa backwards.” There are countries much poorer than South Africa that have made regulatory changes far quicker and more effectively than Matsepe-Cassiburu. Just take a look at Uganda and bear in mind that it took the minister's department 4 years longer than necessary to license the country's Second National Operator (SNO).

As long as we continue to stroke the egos of those who don’t perform, we undermine the effort to congratulate and recognise those who do, which is sad given that there are people out there fully deserving of an African ICT Achievers Award.

Investing in the ‘resource curse’

The IMF has again cautioned against the ‘resource curse’. The thesis, by Richard Auty, is that resource abundant countries paradoxically grow slower than countries with far fewer resources.

It is widely suspected that the ‘curse’ is largely caused by the effects of over-dependence on resources. Governments, perhaps believing resources will never run dry (in their time), fail to wean economies off these commodities. One of the consequences of this is that in times of high prices, the real exchange rate rises making local industries less competitive, while encouraging borrowing as it becomes relatively cheaper to do so.

The danger though is when prices fall, exchange rates fall and debt repayments soar, and this is after industries have contracted, which dramatically decreases tax revenues. Sure, taxes could be pushed up to compensate, but this wouldn't do much for competitiveness.

Over-dependence is the big issue though. Botswana still gets 70 percent of its export revenues from diamonds, while Burundi, Rwanda and Uganda all earn more than 50 of their export earnings from coffee. Looking west to cotton producing nations, the picture isn’t really any better. And, then, of course, there’s oil, which earns Nigeria 95 percent of its export income. Perhaps part of Chad’s defection to China was because the Asian giant is more likely to be able to buy all of Chad’s oil than Taiwan is.

While earning lots of money from diamonds, coffee, cotton and oil should be encouraged, an economy that makes most of its money in one area, especially in mining, makes for a potentially unstable country, both economically and politically. Governments and militants can't easily steal the resources of a service industry; they can only try to tax it.

The rumours that Uganda’s president was trying to grab oil land shows quite clearly the temptation that goes with controlling what could be the most successful sector by far in the economy. A diversified economy makes it far more difficult to identify a sector for a 'coup' and, consequently, harder for unscrupulous governments to find military allegiance.

It also means that investments cover a broader spectrum of sectors, which, if well managed, effectively hedge against each other making for a more stable economy. This should make it far easier for governments to plan ahead.

Botswana may still find a way off diamonds; given the vast amount of money it spent on education to develop human capital. But perhaps governments can’t always be blamed.

Chris von Zastrow, a coffee specialist working for USAID and EAFCA, hinted at the possibility that much of the volatility in East African coffee markets is because too many farmers don’t see their farms as ‘a business’. They grow coffee one year, make some money, and then abandon their farms until they need money again.

So the bigger question perhaps is how do we get farmers, and indeed the entrepreneurs needed to truly diversify economies, to see their ventures as investments?

Is Nigeria's anti-cybercrime team really the answer?

Cybercrime is one of the fastest growing criminal activities in the World and it is unfortunate that Nigeria has often managed to keep ahead of the trend and although reports say that Nigeria isn’t taking the problem seriously, it’s clear that this is one area where the West African country does not want to be the world leader.

Even though the success of counter-crime measures may be questionable, Nigerian authorities are working around the clock to implement measures to contain and stop cybercrimes, even if that means removing the hands of the clock temporarily by closing cybercafés at night.

But criminal activity has always intrigued me somewhat. Sure, I get those annoying 419 emails all the time and the ones asking me to be a middle man for online auction sales (what on earth for? online payments can be directed anywhere in the World instantly). In fact, the last one even asked me – after telling me that my skills were in need – to fax my CV to a number in the United States. The fact that the emails keep coming suggests one of two things: a) ultimate desperation or b) that these scams actually work.

So while the desperate scammers, if we can call them that, are probably just copying their ‘scam-gods’, those who came up with the scams are almost certainly very capable and its this latent capacity that is interesting. If Nigeria is to overtake South Africa as Africa’s biggest economy by 2016, then more effort needs to go into making sure that intelligent people help push GDP growth. The sad reality is that it will probably be quite difficult to find these people as it is the ‘desperate’ scammers who are more likely to be caught.

What probably needs to happen in Nigeria then is a structural change to ensure that this capacity isn’t lost to the virtual underworld. If these people aren’t in formal employment because they can earn more through cybercrime, then perhaps the private sector isn’t compensating skills accordingly. Or it could be that the formal sector in Nigeria doesn’t provide enough challenge, thereby boring these people, or that jobs simply aren’t available. Looking at it like this, cybercrime may just be a kind of entrepreneurial venture. If this is the case, pushing support and financing into SMME development may be a far cheaper way to ensure that 419 becomes a number of the past.

Sure, the law undoubtedly has a part to play, especially when the perceived risk factor for a crime is significantly lower than the possible rewards and note I'm also not suggesting that scammers are necessarily unemployed.

Realistically though, scams won’t stop existing, in Nigeria or elsewhere, but perhaps some smart management of this otherwise wasted talent could put Nigeria on top.

Good governance vs Ubuntu

“Good corporate governance is a source of competitive advantage” (Dave Malcolmson, Head of Nepad Division for the Minister of Foreign Affairs, ASCCI AGM and Conference 2006).

Bang! There was nothing particularly peculiar or lucid about this statement, but I had been thinking about competition from various angles and this statement seemed to bring it all together, somehow.

I started off last week by thinking that if governments were forced to see themselves as a business that their administrations would be run better. However, for this competition is needed, the kind of competition that makes governments miraculously perform 4 to 5 years worth of work in the 6 weeks prior to elections.

For administrations to be ‘scared’, there needs to be spare capacity in the form of strong opposition potential that is all too eager to capitalise on the previous administration’s failures.

True, a general lack of capacity on the continent could sometimes mean that the posts are filled with slightly less capable individuals, and this may work against efforts to encourage officials, but looking at global politics today it is safe to assume that some ‘incapables’ slip through the rug and float to the top from time-to-time anyway. So perhaps capacity isn’t really the problem at all, and besides, competition will help develop capacity.

The next step is that administrations need to be encouraged. Zambia’s president saying that his country is the preferred African destination for FDI gives an incentive for other African administrations to try harder. Because good governance is a source of competitive advantage (i.e. corruption is not efficient), the desire to be number 1 can play an important role in keeping administrations clean, or at least cleaner.

The other reality is that as governments become more and more proud of what they have achieved, they begin to brag about these achievements. Mauritius’s claim to be looking into a low tax competitive economy may be one of many strategies that is already available today, but they are only ‘available’ because governments boasted about them.

The other part of becoming more competitive is that underperforming countries become somewhat embarrassed by their ‘figures’ and tend to try to go on a diet, but only end up shedding a few zeros. Zimbabwe’s cosmetic cover-up hasn’t helped anyone, but it does show that the government is becoming a little uncomfortable with the predicament of trading in billions and trillions for bread. While the negative publicity of the contentment is often unwarranted, embarrassing a few governments might help fill the accountability gap.

’Ubuntu’ certainly has its place, but right now what Africa needs to some hard-faced competition, the kind that will allow the continent to do 100 years worth of work in 5.

‘Right to education’ closes university

“‘Right to education’ closes university” read the headline in my mind after strike action led to the closure of East Africa’s oldest and possibly most prestigious university. Firstly, I have to question the quality of lecturers at Makerere University in Uganda who would rather see their institution burn (metaphorically of course) than work for less money. Secondly, I have to question the quality of education students, who think violence is an appropriate action in defending their ‘right to education’, have been getting.

Africa’s lack of appropriately skilled graduates has been talked about all over that place so I am going to have a look at this ‘right to education’ stuff.

Lecturers should be the first to agree that this right is important, especially given the amount of tutoring time that has been invested in them. After all, academics probably have more access to knowledge and training than many top government advisors. With this comes a certain responsibility – these lecturers are certainly intelligent and capable individuals, but they didn’t get there alone. While I do not expect lecturers to work for a pittance, I do anticipate that they will make sure that some of what was invested in them is reinvested to create a new and larger intellectual power-house.

The two questions that this poses is whether academics are earning too little and whether students’ right to education is being met, especially at a tertiary level. The 100 percent pay rise request may seem unreasonable, given that inflation has been in single digits for over a decade, however, pay increases are often ‘forgotten’ for several years. The area which may be cause for concern is that lecturers are asking for more than five times annual per capita earnings of $1 800. This seems a little excessive given that good academics should be earning additional income from their extracurricular research activities and effectively prices their services beyond the means of most Ugandans. So much for the ‘right to education’.

As for the students’ ‘rights’, I’m at a loss as to how the country’s educated elite could think hooliganism was acceptable in this case. I’m not saying that well-informed individuals aren’t violent, but I’d expect their actions to at least be well-reasoned and rational given that universities are meant to inculcate these kinds of skills. Making a mess of your university and your city is not likely to encourage lecturers to return to teach. If these scholars applied their teachings and still concluded that this was appropriate, then perhaps lecturers should be asking for less, not more.

Xenophobia, FDI and myths about wealth

There seems to be a massive misunderstanding as to how exactly wealth is generated with governments trying to mark their non-performance (i.e. their inability to effectively generate wealth rather than redistributing it) by throwing xenophobic tantrums.

Zambia’s opposition leader said that Chinese and Indian traders were taking local jobs and should be sent ‘home’, Chad decided to simply kick the foreigners out, while Tanzania is looking to shut out alien workers.

While this is most certainly not the case for the whole of Africa, it does highlight a worrying trend. Every African government is pushing for FDI to supplement poor levels of public spending, but what doesn’t seem to be anticipated is that large international companies are likely to want to bring in their own support staff, especially in areas that require skilled workers. Why? because this means minimal training is required, bosses know what their employees are capable of and then there’s speaking the same language.

Training is key though and government policy has seldom addressed this adequately. Tanzania’s labour minister inferred that locals were lazy, while his South African counterpart – more critically – noted that productivity was the issue. It is likely that ministers are realising that there is growing discontent by local workers at the expanding local aristocracy, who, like the foreigners, earn a lot more. It is far easier for ministers to blame the foreigners for 'stealing' the wealth, which the locals should somehow have, thereby minimising critique on themselves for implementing poor policies.

Perhaps what needs to change is to understand that foreigners, and the aristocracy who probably benefited from them, did not pick dollar bills out of the ground. Instead of blaming foreign workers for ‘stealing’ wealth, governments need to ask how this wealth was generated.

Part of the answer can be found in Africa’s incredibly skewed Gini coefficient. Africa has massive supplies of unskilled labour, with a relatively small supply of skilled labour. Dealing with this coefficient has very little to do with empowerment and everything to do with decreasing the amount of unskilled labour in favour of skilled labour. This is simple economics: More skilled labour means skilled labour costs less, while less unskilled labour pushes up the price.

As for this apparent trend towards xenophobia, I would hate to see Africa expel those who can in favour of those who can’t because governments, by alienating foreign workers, are also alienating the tiny aristocracies they helped create in the hope of becoming self-sufficient.

Africa's anti-trade reality

I have often wondered whether Africa really wants to trade. It seems absurd to think that African states wouldn’t be pro-trade, but perhaps the trade problem isn’t as much tariff related as NGOs and African lobby groups would like us to believe. Perhaps it’s that many African states have chosen policies that make it difficult to impossible for their goods and services to even entertain the idea of accessing outside markets. While I’m not disputing the fact that EU and US subsidies are unfair – especially since structural adjustment programmes call for the scrapping of subsidies by African governments in the name of free trade – I am saying that poor links to other states and the outside world make us unlikely benefactors of globalisation.

Gauteng’s - Africa’s most economically active region – premier recently said that "we must trade more with ourselves if we are to trade more effectively with the world". Effectively he said that a lack of infrastructure acts as a barrier to entry for intra-trade and this inhibits our capacity to access global markets. This seems obvious, if you can’t move your goods, you can’t sell ‘em. Simple. But what about areas where ‘economic infrastructure’ is already available?

In 1999 African states met with the aim of opening up their skies and by 2006 all that has been managed is a small task team comprising of airlines that do not necessarily have the best track record in terms of an ‘open sky policy’. South Africa’s state-owned carrier features prominently and has been accused many times of abusing market dominance and its link to the state. I definitely don’t see this carrier leading the way in opening up Africa’s skies, thereby promoting trade.

So while it may be easy to say that big international countries are hampering the growth of goods from African markets, it may be wise to take a step back and question the trade barriers within. There are some goods things happening though. New road links are being negotiated almost daily, rail networks are being expanded and redeveloped, and some of the political barriers are being abolished. These are big steps forward and should be applauded and perhaps after all this development, international trade barriers won't matter all that much.

Focus on Urban, not Rural

Is rural development really the way to go for Africa, especially ahead of urban development? Both need to happen, but the sensitivity of this issue may mask the fact that a focus on rural development is unsustainable. Why? Well, if we assume that rural communities are undeveloped, then it is unlikely that they will be contributing their ‘fair’ share towards development funds in the country.

I started thinking about this issue again after a speech by Nigerian President Olusegun Obasanjo. He said that African stock exchanges needed to integrate to achieve economies of scale. Sure, ‘integrating’ rural areas through development can help bring economies of scale, but Obasanjo also used the words “fast-track” and “short-cut”. Development in urban areas, even just ‘rural’ shantytowns in cities, seems more of a fast-track solution to me.

The danger though is that when development in rural areas is too heavily subsidised by richer urban areas is that rural inhabitants will become poorer as urban living will need to become increasingly more expensive to compensate. Building 1km of road for 1 000 urban residents, each paying $1 for it, is far more expensive per person than building 1 000km of road for 1 rural dweller paying $1.

Follow China we must (apparently), but the Chinese are actively making rural living more expensive by pushing rural inflation ahead of urban inflation to make it possible for rural dwellers to enter urban living. This, I guess, is much easier to do in an environment when you don’t need to be voted in though. The equation in a ‘democracy’ is: ‘free’ amenities equals votes.

Sure, going back to the road analogy, there are security advantages to developing rural areas, which would undoubtedly benefit urban areas too (especially the potential for increased food security). It also becomes easier to protect rural areas, which will definitely help increase the value of pastoral land. As ground becomes more expensive, it is increasingly necessary for landowners to consider the land as an investment. An unfortunate consequence of this is that poorer landowners may not be able to afford to keep their plots anymore, effectively being pushed off their land by development, but at least healthy payments for land would be more likely, making it easier to enter urban living.

This leads to another consideration. If governments are going to commission roads into the countryside, they need to make sure than the return on investment is justifiable. This means they need to make sure that the land is used productively, i.e. bigger farms, more machinery and fewer jobs. Perhaps when this leads to cheaper food in cities, this gain will make it easier to justify urban areas subsidising rural areas. Increased spending power also enables new opportunities for jobs in the economy, possibly making some space for urban migration.

The bottom line is that rural development can’t just happen. Sacrifices and pain are going to be involved and it’s important that those running for office make the electorate aware of this. There may be some wisdom after all in the adage: No pain, No gain.

Too much independence makes taxi industry unworkable

Last night on my drive home I saw the spotlights illuminating a small chicken-fenced paddock that was to be one of the project sites for the Gautrain, South Africa’s first high-speed train. (Note that South Africa already has rapid transport, they’re generally called taxis.)

And so, almost 150 years after the Metropolitan Railway started conveying passengers, Johannesburg will get in on the action. The ‘Met’ was the birth of the London Underground, the oldest and biggest underground system in the world.

What I was wondering was whether it’ll take South Africa as long to develop a sustainable transport network as London did. Initially, the underground was massively inconvenient because lines were owned by different firms, making changes clumsy and confusing. Poor planning meant that many lines had to be rerouted later and several stations were simply never opened.

The solution came with the removal of ‘independence’ when financial difficulties made it possible for an American investor to buy out the independent lines and eventually brand the lines as one company, thereby creating a city-wide integrated network, which could then be used to sell the city.

Now while the Gautrain will give South Africa its very own slice of rattling underground, it is unlikely to integrate much while the government is subsiding its inefficiency rather than making it an affordable alternative (much like the Heathrow Express line). Taxis, however, offer the real opportunity (across Africa) to provide a convenient and sustainable service.

There are some serious ‘buts’ though and perhaps some entrepreneurial minds can tackle these more succinctly, but here are some of the ‘buts’.

Firstly, the multitude of independent syndicates running taxis will need to be rationalised down to many less than 10 and will then need to be branded appropriately. ‘Banged-up taxi’ is not a brand.

This has quite a few advantages both socially and economically. Taking it to the extreme, a monopoly can’t incite taxi violence over routes, unless –of course– a boss is silly enough to shoot himself in the foot. Hopefully in this case market forces will prevail and someone (like the American investor) will quickly buy his operating licence and take over the fleet. (Taxi violence is the absurd situation where taxi drivers shoot the drivers of any other form of transport because they somehow believe they have a right to a particular route. Supply and demand fundamentals are never questioned.)

And the operating licence is the next thing. Independent syndicates are difficult to regulate (aka ‘police’). If the risk is real that you may lose your licence if your drivers decide to drive double the speed-limit, because it’s unfair that the Gautrain, at 160km/h, can now out-speed them, then you’ll explain to your drivers that life isn’t fair. Other small offences will quickly fall away too as it becomes possible to fine the operator, who can then take action on the particular driver.

So while I definitely don’t see the Gautrain being the answer to Gauteng’s transport problems, I can see a gem of an opportunity for an entrepreneur who’s willing to buyout all the little syndicates to create a real metropolitan transport solution. This could be sorted out even before the Gautrain's expected launch in 2010.

The next step would be to look at route planning. Inclusively is a lovely ideal, but if there are too many stakeholders it becomes cumbersome and unworkable. Just a look at the EASSy cable shows this clearly. A small group of key players will be able to negotiate with government and possibly set up a company that will build, maintain, and label taxi stops with timetables. Such a company could be something more for entrepreneurs to have a look over and maybe, just maybe, the government will come to the party too.

And maybe, just maybe, the next time I jump on a taxi I’ll know for sure where I’m going and what time I'll arrive.

Nigeria, Egypt & Iran's nuclear exploits

How different is Nigeria really from Iran? International critics say Iran’s massive oil and gas reserves mean that it does not need nuclear energy (if its oil and gas wealth was efficiently managed and the US lifted sanctions to allow for further investment). Nigeria also has massive oil and gas reserves (producing about 2.3 million bpd) so surely the same argument should apply?

Perhaps the US is just sore at Tehran’s proposed euro-based oil bourse, which is unlikely to help appease the US’s yawning deficit, or has realised that it has created its own ‘problem’ by starving Iran of oil and gas energy investment opportunities and then saying that Iran couldn’t invest in alternatives. I’m more interested in the potential threats posed by Nigeria’s (and Morocco, Egypt and maybe even South Africa’s) nuclear interests though, not being much of a specialist in Middle East affairs.

Nigeria sees nuclear as a method of securing power post-oil. At some point oil will run out and so this move seems wise enough, however, Nigeria can’t even produce enough energy now and has actually gone backwards over the last 7 years, with the Nigerian National Power Authority (NEPA) failing to maintain electricity installations. Failing to maintain old electricity installations may be a little annoying to customers, but failing to maintain a nuclear station may be a little bit more disastrous: Need I say ‘Boom’?

So while there are probably some political hitches in Iran that the US feels it needs to tell the world about, providing help to a nation that has a poor track record of maintaining power installations may not be the best idea either. I am not against Nigeria’s nuclear ambitions; nuclear powers in Africa increase the likelihood of things like aid and diplomacy. I do, however, worry, that in 30 years time, an African country may be labelled with the dreadful title of being Africa’s very own Chernobyl.

While none of the African countries with current nuclear power programmes have been considered hostile (unlike Iran), African states must be aware of the fact that their nuclear ambitions may hurt their own people.

Eastern 'medicine' may further hurt Zimbabwe

Zimbabwean officials have gone giddy at the prospect of attracting Russian investment in what appears to be a diehard attempt at stalling the inevitable failure of their president’s ‘look east’ policy.

Recently an Indian firm pulled out of a massive steel production deal presumably because although they’d come to manage the state-owned iron and steel works, the government felt it best to retain control even after the government had recognised that their management was to blame for killing productivity at the steel producer.

The bottom line is that although the East has shown interest in helping (1, 2) President Mugabe sustain an unsustainable regime by allowing the president to believe that eventually it’ll work, it won’t. In time, the East is going to want to be paid and, given that Zimbabwe can’t even pay its phonebills at the moment, how is it going to pay for all the infrastructure development and loans for oil? Socialism may sound friendly and altruistic, but it's unlikely the Chinese or Russians are going to be too pleased when Zimbabwe can't pay.

So while China may be able to show how socialism and capitalism can be creatively mixed, perhaps the Russians can show Mugabe a thing-or-two about how nationalism failed the world’s biggest country, leaving its people poor and without food.

Viva la mini price-war

Perhaps Kulula’s CEO was right when he said that Mango would become rancid (he used the Afrikaans word "vrot"). Try as I may, I have been unable to access the website of South Africa’s newest entrant into the low-cost airline segment. Thankfully, Mango’s call centre (+27 (0) 8611-MANGO) didn’t play me any music, utilising instead the harmonious pulse of an engaged tone.

I did, however, manage to have a look at the website last night - in ‘Matrix-style-slow-motion’ - and was even able to book two return tickets between Johannesburg and Durban at a more than comfortable R338 (about $45) each. I did feel a little betrayed given that just two weeks ago I paid almost double this for the same flight on SAA, but there are enough articles about the ‘dubious’ link between Mango and SAA. I’m not really interested in whether this is fair or how much the tax-payer is supposedly subsidising Mango through state-owned SAA because, if true, this is one of those rare opportunities which may see me benefit from my taxes.

What I am interested in is that it seems the South African low-cost airline sector, which Kulula likes to remind us is already 5 years old, has graduated into the ‘first world’. We’re not used to price-wars in South Africa and although analysts are saying Mango’s prices are unsustainable, Kulula has already started undercutting some of Mango's introductory offers, albeit by only R2 ($0.25).

First world not in terms of quality - the umpteen grammar mistakes on www.flymango.com probably won’t cause planes to fall out the sky - but in terms of ballooning advertising budgets, which are used to prop-up, given that this is a marketing ploy, unsuitable ticket prices. (That is if we believe those who say that cut-throat prices aren’t sustainable and looking at some of the prices of the pioneers of the low-cost industry, these prices aren’t nearly as cut-throat as some may want us to believe.)

While price-wars can result in some players going out of business, which can create a less competitive environment, they can also force enterprises to rethink their profit margins and revenue streams, find ways to increase productivity, and become more efficient. Those who can’t find ways to compete should be left behind as they’re charging their customers too much and perhaps that is what SAA realised when they decided they needed to launch their own low-cost airline in response to the threat from low-cost carriers, which it says can sustainability offer prices 20 percent lower than its rivals. So I say, viva la mini price-war and perhaps, if this war leaves a stink, it’ll encourage some other partly-state-owned enterprises, one in particular, to reconsider the sustainability of their super-profits.