<p><strong>Mike van der Westhuizen and Nishlen Govender | Citadel</strong></p>
<p>&nbsp;</p>
<p>Recent Bitcoin mania has raised a heated debate as to what the world’s largest cryptocurrency (by market capitalisation) is actually worth. Until recently Bitcoin garnered attention from mostly computer science boffins and the criminal underworld, but the 350% price rise since the beginning of the year has started turning heads around the world.</p>
<p>As the famous Wall Street saying goes: “When even shoeshine boys are giving you stock tips, it’s time to sell.” Is this adage warranted in the case of Bitcoin?</p>
<p>Bitcoin’s appeal centres on the fact that it operates independently of any central bank. As such, it is seen as the new age of global currency and payment methods. Of the roughly US$100 billion total cryptocurrency universe, Bitcoin comprises just under half. And although it is prominent now, it has in fact been active since 2009.</p>
<p>Bitcoin’s rapid price acceleration has been attributed to:</p>
<ul>
<li>Japan’s adoption of the currency as an official medium of payment. As well as, possibly, the removal of high-value bank notes in India and Venezuela or even the continued devaluation of the Chinese yuan.</li>
<li>Its potential as a hedge to global market uncertainty.</li>
<li>A relatively smooth “hard fork” – basically a permanent divergence in the (Bitcoin) blockchain which would essentially mean that Bitcoin splits into two different “coins” [Bitcoin and Bitcoin Cash], and hence potentially only one of those would be of real value.</li>
</ul>
<p>The technology/algorithm behind Bitcoin, namely blockchain, is a far more powerful platform than Bitcoin itself, in our view. A fintech specialist describing the technology on question-and-answer site Quora said: <em>“Blockchain technology creates a decentralised digital public record of transactions that is secure, anonymous, tamper-proof and unchangeable. Instead of a bank or other intermediary maintaining a private database of records, blockchain technology makes all records public.” </em>Disintermediation is blockchain’s biggest advantage: removing the middle-man ensures that users of the blockchain are in control of their information and transactions, data integrity is affirmed and, in theory at least, transaction times and transaction costs are minimised.</p>
<p>Uses of blockchain technology in the real world include making payments (the most commonly known); supply-chain management (for example, tracking your food at every step from farm or sea to table); smart contracts (including land registries); cloud storage; online voting; trade settlement and payments of grants. Being a relatively new technology there is still much potential to be unlocked in blockchain, and many large corporations are exploring potential uses.</p>
<p>But how should Bitcoin be valued? A key factor is to determine whether it is an asset class and, if so, what the appropriate valuation criteria to assess it might be. There are significant stumbling blocks here as there are no underlying fundamentals that allow us to price or value Bitcoin.</p>
<p>If we assume that Bitcoin is a currency, we would try to ascertain a long-run fair value by using various models: relative purchasing power parity, inflation differentials or interest rate differentials. But these values are impossible to ascertain for Bitcoin given the lack of central bank involvement, the absence of a domiciled area or, indeed, any linking economic fundamentals. If we treat Bitcoin as a basic security, then there are no fundamentals that we can use to assess it, leaving us unable to reach an appropriate valuation assessment.</p>
<p>Despite this stumbling block, there is no doubt that Bitcoin has done exceptionally well. A fact which is clearly evident if you merely consider the performance of the cryptocurrency in recent months (see Figure 1).</p>
<div id="attachment_282021" style="width: 548px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-282021" class="wp-image-282021 size-full" src="http://cnbc.africa/wp-content/uploads/2017/08/Citadel.CryptoCurrency-Graph.png" alt="" width="538" height="263" /><p id="caption-attachment-282021" class="wp-caption-text">Figure 1: Price appreciation over a two-year period (Source – Bloomberg)</p></div>
<p>If we cannot estimate value using traditional criteria, we can still assess a tradeable asset based on its supply and demand. For Bitcoin, we can break down participants into two broad spheres: those using Bitcoin for trading and those who are speculators. We know from anecdotal evidence that Bitcoin still isn’t widely used as legal tender, based on the lack of vendors accepting it and the relative charges from third-party providers that link consumers with vendors. Additionally, as a store of value, it is extremely volatile and an unlikely source for long-term wealth preservation.</p>
<p>There is also a vast portion of trade that could be based on unreported illicit activity, but without further information it is difficult to understand the supply/demand dynamics from those users. We do believe that cryptocurrencies will be used much more in the future but, at present, this represents only about 0.12% of global trade.</p>
<p>If the only way we can value Bitcoin is based on supply and demand, and if those using Bitcoin practically as legal tender comprise just a small part of its demand, then we are left with a large portion of the current demand for Bitcoin being speculative.</p>
<p>With no viable way to determine what price Bitcoin, or any cryptocurrency, should be trading at based on usual valuation criteria, should demand slump it could result in spectacular losses along the lines of those seen during previous bubbles (something which is true even in Bitcoin’s relatively short history).</p>
<p>To fully understand how important underlying fundamentals are, consider the fact that Figure 1 above does not represent Bitcoin but rather BlackBerry from the period 2006 to mid-2008, a time when the brand (within the company RIM), was absolutely soaring: it rose 525% in under three years. Since that peak the stock has lost 92% to its current price. Just consider whether you would have bought or sold the stock during the period in 2008 when it traded at a lofty price. You would consider any number of factors, including the company’s underlying fundamentals, its strategic positioning and the overall competitive landscape.</p>
<p>We believe that the hype and price appreciation of select cryptocurrencies belies any of the underlying traits that we would look for in a sound investment, and rather feeds on optimism regarding the future of cryptocurrencies. We cannot tell you if these currencies are expensive or not, but we believe that without this knowledge it is impossible for us to invest in an asset class that seems to trade purely on momentum and sentiment.</p>
<p>In addition, there are some headwinds which – at least at this stage – could prevent Bitcoin being rapidly and widely accepted. These include:</p>
<ul>
<li>Bitcoin’s transaction processing is relatively slow, handling up to seven transactions per second, whereas service providers like Visa and Mastercard can handle thousands per second.</li>
<li>The size relative to the global monetary base is tiny.</li>
<li>Without acceptance from regulating authorities, involvement in cryptocurrencies by large institutional players and governments will remain limited.</li>
<li>It is unlikely that Bitcoin will replace money in the near to medium term because governments have far too much to lose from this move.</li>
<li>Although Bitcoin can be used pay for goods and services, its heightened volatility negates the definition of a currency as a store of value.</li>
</ul>
<p>Ultimately, Bitcoin is just a mathematical algorithm. There is no doubt that the technology behind bitcoin (blockchain) is revolutionary, bitcoin itself requires much wider acceptance and continual improvement in order for price moves like we’ve seen to be sustainable. Other than its pure (but declining) dominance, Bitcoin has no distinguishable competitive advantage over other cryptocurrencies.</p>
<p>Bitcoin is to cryptocurrencies what the Motorola DynaTAC 8000X was to mobile phones. The first of its kind is not necessarily always the best, and technological innovation changes rapidly. As there is no clear way of accurately valuing any cryptocurrency, it does not instil confidence in making any kind of rational investment decision.</p>
<p>Momentum is a powerful force, and while the price can continue to run, the biggest risk is not missing out but rather in waking up to the realisation that Bitcoin isn’t the chosen one. Just ask BlackBerry.</p>


Bitcoin, blockchain and bubbles: cutting through the hype

<p><strong>Linda Trim | Giant Leap</strong></p>
<p>The traditional 8-hour workday is an outdated, ineffective approach to work that actually diminishes productivity.</p>
<p>Linda Trim, Director at workplace specialists Giant Leap, said: &#8220;It’s time for a change of thinking.&#8221;</p>
<p>She noted the 8-hour workday was a relic of the industrial revolution created in an effort to cut down on the number of hours of tough manual labor that workers were forced to endure on the factory floor.</p>
<p>“But like our ancestors, we’re expected to put in 8-hour days, working in long, continuous blocks of time, with few or no breaks. Most people even work right through their lunch hour.”</p>
<p>Trim notes that if people want to be as productive as possible, they need to let go of this Dickensian approach.</p>
<p>Here’s a better way:</p>
<p><strong>Structure Your Day</strong></p>
<p>A study recently conducted by the Draugiem Group, a social networking website,  tracked employees’ work habits by measuring how much time people spent on various tasks and compared this to their productivity levels.</p>
<p>“They stumbled upon a fascinating finding: the length of the workday didn’t matter much. What mattered was how people structured their day. In particular, people who were strict about taking short breaks were far more productive than those who worked longer hours,” Trim said.</p>
<p>The ideal work-to-break ratio was 52 minutes of work, followed by 17 minutes of rest. They didn’t check Facebook or get distracted by e-mails. When they felt fatigue after about an hour, they took short breaks, during which they completely separated themselves from their work.</p>
<p><strong>The Brain Wants an Hour On, 15 Minutes Off</strong></p>
<p>People who have discovered this ‘magic’ productivity ratio tapped into a fundamental need of the human mind: the brain naturally functions in spurts of high energy (roughly an hour) followed by spurts of low energy (15–20 minutes).</p>
<p>“For most of us, this natural ebb and flow of energy leaves us wavering between focused periods of high energy followed by far less productive periods, when we tire and succumb to distractions,” Trim noted.</p>
<p>Instead of working for an hour or more and then trying to battle through distractions and fatigue, when your productivity begins to dip, take this as a sign that it’s time for a break.</p>
<p><strong>Boss Your Workday</strong></p>
<p>The 8-hour workday can only work well for you if you break your time into strategic intervals that aligns with your natural energy. Here are the best ways to do it:</p>
<p><em>Break your day into hourly intervals &#8211;</em> We naturally plan what we need to accomplish by the end of the day, the week, or the month, but we’re far more effective when we focus on what we can accomplish right now. “Planning your day around hour-long intervals simplifies daunting tasks by breaking them into manageable chunks,” said Trim.</p>
<p><em>Respect your hour &#8211; </em>The interval strategy only works because we use our peak energy levels to reach an extremely high level of focus for a relatively short amount of time. When you disrespect your hour by texting or checking e-mails you defeat the entire purpose of the approach.</p>
<p><em>Take real rest &#8211;</em><strong> </strong>Getting away from your computer, your phone, and your to-do list is essential to boosting your productivity. Breaks such as walking, reading, and chatting are the most effective forms of recharging because they take you away from your work. On a busy day, it might be tempting to think of dealing with e-mails or making phone calls as breaks, but they aren’t, so don’t give in to this line of thought.</p>
<p><strong>The wrap</strong></p>
<p>“Breaking your day down into chunks of work and rest that match your natural energy levels feels good, makes your workday go faster, and boosts your productivity.” Trim concluded.</p>


Is the 8 hour workday outdated and ineffective?

<p><strong><span class="fn author-name">Suellen Shay | </span>University of Cape Town</strong></p>
<p>Jonathan Jansen, vice-chancellor of the University of the Free State in South Africa until a year ago, has written a book on the country’s higher education sector. As by Fire – The End of the South African University is one of a number of recent books that set out to make sense of the current crisis in South African universities.</p>
<p>The crisis began in early 2015 with the #RhodesMustFall protests and gained momentum over the course of 2015. These protests fuelled, and eventually overtook the national #FeesMustFall movement. The underlying economic, cultural and political issues that drove the protests remain largely unresolved.</p>
<p>As by Fire is structured around three main questions: What in fact happened? Why did it happen? And what does the protest crisis mean for the future of South African universities?</p>
<p>Jansen draws on his own experience as well as interviews with 11 vice-chancellors in the country. His conclusion is:</p>
<blockquote><p><strong><em>In a nutshell, there is no future, and</em></strong></p>
<p><strong><em>What we are witnessing is a full system meltdown.</em></strong></p></blockquote>
<p>There are several problems with Jansen’s apocalyptic thesis.</p>
<h2>An irresponsible thesis</h2>
<p>Firstly, for a scholar of Jansen’s calibre, the analysis lacks a broad comparative perspective. His main reference point is the story of failing universities on the rest of the continent.</p>
<p>Jansen doesn’t make any comparisons to student protests across the globe– in Hong Kong, Canada, Chile, the UK, the US and Turkey, to name a few. These were also characterised by occupations of leaderless movements, threats of violence by police and militant students, reassertion of identity politics in curriculum and political stalemate.</p>
<p>A more thorough comparative analysis of what is happening in South Africa in relation to continental and global trends could have led to a more constructive conclusion that posed a range of future scenarios instead of a single “no future” story.</p>
<p>The more serious problem with Jansen’s “no future” thesis is that it’s irresponsible. Someone of Jansen’s profile has tremendous power to shape the narrative. And how South Africans interpret the events of the past two years shapes how the sector will go forward. In other words, his conclusion has consequences. Why would academics stay if they believed Jansen’s predictions with the certainty that he projects them? Why would students apply? Why would donors invest?</p>
<p>In the final few paragraphs Jansen attempts to wave a small flag of hope by appealing to civic action under the banners of free education for the poor and the right to education for all. This is an unconvincing attempt to end the book on a happier note.</p>
<h2>An important perspective on leadership</h2>
<p>What the book does offer is a view of university leaders under crisis – a close-up, zoomed-in, largely unedited perspective of 11 VC’s “under fire”, in some cases, literally. This is why the book will be of interest to anyone in higher education management.</p>
<p>The extensive literature of higher education leadership and management needs more of this kind of “in the trenches” study – leaders describing in their own words what it feels like to be flattened between a rock and a hard place, managing competing and contradictory demands from all sides while always under the watch of an unsympathetic media.</p>
<p>The book presents a view of leaders in a lose-lose situation, required to make on-the-spot judgement calls. The reader gets a close-up view of the ways in which they worked tirelessly to defend their institutions and were battered from every side. And Jansen is right to expose the extreme pressure and the personal costs that the VCs and their families paid. The accounts expose both their vulnerability and their resilience.</p>
<p>Jansen concludes by arguing that what’s needed more than ever before is</p>
<blockquote><p><strong><em>university leadership that is both compassionate in speaking to the student heart and competent in leading our universities in a demanding world of teaching, research, and public duty.</em></strong></p></blockquote>
<p>The missed opportunity of the book is that Jansen doesn’t explicitly extract from his interviewees what that compassionate competence looks like. In retrospect, what do they think they did right? What do they regret? What did they learn as leaders in crisis about the complexities of leading a university community at this stage of South Africa’s democracy?</p>
<p>Rebecca Solnit, American activist and author of Hope in the Dark, writes of the times we are living in that</p>
<blockquote><p><strong><em>this is an extraordinary time full of vital, transformative movements that could not be foreseen. It’s also a nightmarish time. Full engagement requires the ability to perceive both.</em></strong></p></blockquote>
<p>What South Africa’s universities need from their leaders now is not prophecies of doom, but deeper reflection on the transformative potential of this difficult historical moment.</p>
<p>&nbsp;</p>
<p><em>This article was first published in The Conversation.</em></p>


Op-Ed: The end of South African universities?

<p><strong><span class="fn author-name">Miemie Struwig, Laura Best, Sibongile Muthwa | Nelson Mandela University</span></strong></p>
<p>Across the globe consumers are increasingly realising their power. In many countries this consumer consciousness, which marries consumer rights to sustainability issues, has been greatly helped by dynamic consumer protection policies.</p>
<p>In Africa, the rise of the middle class is fuelling a consumer economy and countries have begun to beef up their consumer protection policies. But they tend to be disconnected from sustainability issues.</p>
<p>South Africa, which leads the continent in terms of consumer protection regulations, showcases this limitation. The country has a good consumer protection policy regime, benefiting consumers and providing them with rights and redress possibilities. But it’s not linked to sustainability concerns.</p>
<p>The South African situation is not helped by the location of consumer affairs and sustainability in two separate government departments. Consumer protection policy is the responsibility of the Department of Trade and Industry. For its part, sustainability is primarily located in the Department of Environmental Affairs. As a result there’s a disconnect between the two.</p>
<p>South Africa – and other African countries suffering from this disconnection – need to develop a new framework. Our study identifies key areas countries should focus on to get to an integrated approach.</p>
<h2>International experience</h2>
<p>In recent years many countries have amended their consumer protection laws to connect them more closely with sustainability concerns. We looked at a number of international experiences to identify key aspects that could make up a comprehensive consumer protection framework.</p>
<p>Brazil provided helpful insights. It established the National Consumer Bureau in 2012. It was designed to plan, prepare, coordinate and implement the country’s national policy on consumer affairs.</p>
<p>Brazil’s system runs on a model that actively pursues an integrated approach to consumer protection and sustainability. It connects a number of government departments to work together. Departments and agencies in sectors like tourism, health, transport, aviation, municipalities. Together with business representatives they cooperate to ensure consumers rights.</p>
<p>Chile has implemented a national initiative titled education for sustainable consumption. It was designed to provide consumers with information about the environmental and social impact of their daily choices. The underlying policy premise is encouraging responsible consumption.</p>
<p>In Europe, Germany aligned its consumer protection law with European Union consumer rights directive. The emphasis is on giving consumers balanced and independent information so that they can make comparative choices.</p>
<p>China unveiled new consumer protection laws in 2014. Critical changes included raising penalties for false advertising, including false statements about human health or safety. But the law is silent on measures retailers must take to ensure the accuracy of product information.</p>
<p>While many countries are incorporating some elements of sustainability into their consumer protection legislation, it isn’t happening fast enough on the African continent.</p>
<p>&nbsp;</p>
<h2>Lagging behind</h2>
<p>Our study showed that consumer protection policies in many African countries tend to be narrow. This is partly dictated by economic conditions. In poorer countries the basic needs of consumers are given precedence over sustainability considerations.</p>
<p>In addition, poverty limits consumer choices. Products that are produced in a way that doesn’t damage the environment tend to be more expensive.</p>
<p>Ideally, there should be a mix of policy instruments to enable consumers to make more sustainable consumption choices. These must touch on product safety regulations, product information provision and consumer information standards.</p>
<p>South Africa’s Consumer Protection Act has gone some way to closing the gap. The act provides for industries to voluntarily implement minimum sustainability compliance requirements. In addition, the government has powers to prescribe minimum industry sector standards.</p>
<p>But little has been done to put in place mechanisms to enforce these provisions. This also limits the insertion of sustainability goals into consumer protection policy.</p>
<p>On top of this the act should be amended with a view to:</p>
<ul>
<li>improving the definition of key concepts of sustainability and sustainable consumption</li>
<li>making the link between consumer protection and sustainability explicit</li>
<li>and setting down minimum requirements for self-regulation.</li>
</ul>
<p>Because sustainability straddles multiple policy domains, there needs to be joined-up implementation across government.</p>
<p>Consumer education and stakeholder engagement are important because individual’s choices and behaviour also have an impact.</p>
<h2>The way forward</h2>
<p>Sectoral self regulation is an immediate starting point. To trigger this, the business community should review business processes. They must find ways to integrate sustainability and consumer protection.</p>
<p>Debates among policymakers in regional bodies such as the African Union can play an important role. The advances that have been made in the EU provide</p>
<p>But these debates must be underpinned by the knowledge that poverty limits consumer choices. Basic needs of poor consumers need to be protected. South Africa has made a head start and can lead the way.</p>


The gap between consumer protection and sustainability in Africa

<p><strong><span class="fn author-name">Henning Melber |</span> University of Pretoria</strong></p>
<p>These days the African middle class is widely discussed as a phenomenon considered indicative of social change.</p>
<p>But a great deal of the debate hasn’t been very well informed. For a long time contributions lacked a rigorous analysis, failing to examine the so-called middle class in terms of its potential as a proper class. People involved in the debate hardly bothered to engage with the more methodological aspects of the analysis of classes, which has a long tradition in social sciences and should be an integral part of any analysis.</p>
<p>Most problematic was the fiddling with figures, which classified people according to a minimum income as middle class. This is clearly not a very sensible way to approach proper class definition. It puts almost exclusive emphasis on financial and monetary aspects. But professional and social status, cultural norms and lifestyle related attributes as well as political orientation(s) and influence were often ignored. Where they were considered, it was often only in passing.</p>
<p>The debate largely ignored earlier analyses on African elites. It promoted the assumption that the middle class(es) are a positive ingredient for the development of and in African societies.</p>
<p>But such optimism is unhelpful both in terms of the potential economic role of these loosely defined middle classes, as well as the expectations about their political relevance.</p>
<p>In the meantime that’s started to change. Scholars from various disciplines related to African Studies are gaining the upper hand and claiming ownership. <a href="http://witspress.co.za/catalogue/the-rise-of-africas-middle-class/">New publications</a> testify to increasingly concerted efforts to respond with different and more nuanced perspectives.</p>
<p>These engagements offer insights based on more than lofty generalisations void of any social realities on the ground. Rather, the case studies test some of the assumptions and are able to portrait existing identities and practices of social segments of societies, which might be considered as middle class &#8211; or not.</p>
<p>So then, what class is the middle class?</p>
<h2>Caution required</h2>
<p>What is lumped together as middle classes represent at best an opaque awareness – if not about themselves (in the plural) – then at least about society and their position, aims and aspirations. Such ambiguity explains the different political and social orientations of members of a middle class, their different roles and positions in social struggles and their difference in interests.</p>
<p>The conclusions seem to suggest that there is no social force in the making, which by status and definition would indeed be the torch bearer for more democracy, participation, human rights, social equality and redistribution of wealth beyond benefiting just the group. One might call this a class interest, shared by many members of these middle classes across the continent.</p>
<p>But depending on the circumstances, ethnicity, pigmentation and other criteria (not least religion) matter at least as much as (at best) diffuse class awareness.</p>
<p>This should not stand in the way of continued interest in this species called middle class, which at a closer look is not as new as some contributions to the wider debate suggest. After all, there were always some middle layers of societies with a set of differing interests and orientations – only that their visibility and size in African countries seems to have increased lately.</p>
<p>But we should be much more cautious about providing simplified and sweeping explanations about the scope for potential social and political reforms and the impact on transformation of societies these middle classes are able – or willing – to promote.</p>
<p>After all, it is neither the middle class(es) nor even the upper fifth of the income pyramid that has any influence on the distribution of wealth in societies. They too are at the receiving end.</p>
<p>It is indeed the top decimal if not the top 5% or an even smaller fraction that <a href="https://www.theguardian.com/profile/andy-sumner">drives inequality</a>, and it is these haves that have grasped the steering wheel. Their forms of appropriation and enrichment are the ultimate determinants of the scope and limit of poverty reduction by means of redistributive measures in favour of those in the bottom half of society.</p>
<p>To understand inequalities and the mechanisms of their reproduction, the motto coined by University of Cambridge economist <a href="http://www.econ.cam.ac.uk/people/emeritus/jgp5">Gabriel Palma </a>is appropriate. He points to the decisive impact of the wealthy segment of societies as regards growing inequalities on a global scale and <a href="http://www.networkideas.org/featart/mar2011/Palma.pdf">concludes</a>:</p>
<blockquote><p><em>It’s the share of the rich, stupid.</em></p></blockquote>
<p>One is tempted to suspect that the middle class(es) hype seeks to propose a historical mission of these social layers in terms of future perspectives. But, in the light of the real (also material and political) power relations and structures of societies and the global economy, they are never able to live up to this mission.</p>
<p>Despite this sobering conclusion, the current engagement with the phenomenon called the African middle class(es) is anything but obsolete. Independent of their size, they signify modified social relations in African societies, which indeed deserve attention and rigorous analysis – with the emphasis on the latter.</p>
<p><em>These edited extracts are from the Introduction and Conclusion of Henning Melber (ed.), <a href="http://witspress.co.za/catalogue/the-rise-of-africas-middle-class/">The Rise of Africa’s Middle Class</a>: Myths, Realities and Critical Engagements.</em></p>


The African middle class matters: but not for the reasons commonly put forward

<p data-reactid="32">Talks between African and U.S. officials to review the African Growth and Opportunity Act (AGOA) free trade deal ended on Thursday with no decision and a feeling on all sides that it has achieved little since it was set up.</p>
<p data-reactid="33">President Donald Trump&#8217;s top trade negotiator Robert E. Lighthizer and other U.S. officials have been in the tiny West African nation of Togo over the past two days to discuss the Clinton-era trade pact with sub-Saharan Africa.</p>
<p data-reactid="34">Trump&#8217;s &#8220;America First&#8221; campaign has seen him withdraw from the Trans Pacific Partnership, threaten to tear up NAFTA and seek to renegotiate the U.S.-South Korea free trade deal.</p>
<p data-reactid="35">But his administration has said little about Africa, and had not previously mentioned the 2000 AGOA trade agreement. It is not clear whether the U.S. wants to change the deal before it expires in 2025 or extend it further &#8211; no decision was made on either count.</p>
<p data-reactid="36">AGOA allows tariff-free access for thousands of goods from 38 African nations to U.S. markets.</p>
<p data-reactid="37">&#8220;The number of countries benefiting from AGOA is very limited, as is the number of sectors,&#8221; Peter Barlerin, Deputy Assistant Secretary in the Bureau of African Affairs, said at the forum on Wednesday.</p>
<p data-reactid="38">&#8220;We will see if the situation improves in the coming years, but it is also up to the beneficiary countries to enhance their business climate.&#8221;</p>
<p data-reactid="39">Bernadette Legzim-Balouki, Togo&#8217;s trade minister, who presided over the meeting, was equally lukewarm on AGOA.</p>
<p data-reactid="40">&#8220;Not all the countries eligible have benefited from the law,&#8221; she said. &#8220;We are trying to examine the constraints that prevent some African countries from profiting.&#8221;</p>
<p data-reactid="41">Legzim-Balouki added that the United States and the nations eligible for AGOA had agreed on some loose aims, including: to develop a better plan to take full advantage of the pact, for each eligible country to have bilateral talks with the United States, and the need for a mechanism to protect African producers from price volatility.</p>
<p data-reactid="43">The U.S. trade deficit with the AGOA countries shrank to about $7.9 billion last year from a peak of $64 billion in 2008, as U.S. shale oil production increases have lessened the need for oil imports from major exporters Nigeria and Angola.</p>
<p>&#8220;AGOA is an excellent opportunity but we aren&#8217;t making the most of it, mainly due to a lack of knowledge about it,&#8221; Beninois agribusinessman Sylvain Adewoussi told Reuters.</p>
<div class="Attribution_attribution_o4ojT" data-reactid="44">
<p class="Attribution_content_27_rw" data-reactid="45">Writing by Tim Cocks; Editing by Andrew Bolton</p>
</div>


Africa-U.S. AGOA trade talks end with no decision

<p data-reactid="40">Unemployment in Nigeria, sub-Saharan Africa&#8217;s largest economy, is running at more than 14 percent and climbing; in South Africa, the second largest economy, it is over 27 percent. For youth in both places, it is far more.</p>
<p data-reactid="41">This may seem bad enough, but according to International Monetary Fund calculations the sub-Saharan Africa region&#8217;s jobs travails are in danger of reaching uncharted territory in less than two decades.</p>
<p data-reactid="42">That is, unless the economies can create jobs for their burgeoning, young population.</p>
<p data-reactid="43">&#8220;By 2035, sub-Saharan Africa will have more working-age people than the rest of the world’s regions combined,&#8221; the IMF wrote in a blog post this week. &#8220;This growing workforce will have to be met with jobs.&#8221;</p>
<p data-reactid="44">This has major implications for the region&#8217;s economy, its security and wider immigration patterns.</p>
<p data-reactid="45">In the past, some of the jobs strain has been taken up by the so-called informal economy which is dominated by street vendors, household workers and off-the-radar cash jobbers.</p>
<p data-reactid="46">Typically, these workers pay no tax and do not come under regulation, but they do add to a country&#8217;s wealth.</p>
<p data-reactid="47">The informal sector in sub-Saharan Africa was around 38 percent of gross domestic product in 2010-14, according to the IMF.</p>
<p data-reactid="48">This represented a steady decline from nearly 45 percent in 1991-99, possibly a reflection of more formal growth in some parts of Africa. But up to 90 percent of jobs outside agriculture are still in the informal sector.</p>
<p data-reactid="49">It is not generally by desire.</p>
<p data-reactid="50">The IMF found that a third of new entrepreneurs in sub-Saharan Africa said they were doing what they were doing out of necessity.</p>
<p data-reactid="51">&#8220;Most would prefer a job in the formal sector, but don’t have that option,&#8221; it said.</p>
<p data-reactid="52">The International Labour Organization goes further.</p>
<p data-reactid="53">&#8220;Some of the characteristic features of informal employment are lack of protection in the event of non-payment of wages, compulsory overtime or extra shifts, lay-offs without notice or compensation, unsafe working conditions and the absence of social benefits,&#8221; it notes.</p>
<p data-reactid="54">&#8220;Women, migrants and other vulnerable groups of workers who are excluded from other opportunities have little choice but to take informal low-quality jobs.&#8221;</p>
<h3 data-reactid="55">ECONOMIC IMPACT</h3>
<p data-reactid="56">For the economy, informal sector work can be both positive and negative for growth. In some cases, for example, it represents entrepreneurship and start-up businesses.</p>
<p data-reactid="57">But a lot of it is far from opportune for growth. The informal sector tends to be low productivity work, partly because it attracts lower skilled workers.</p>
<p data-reactid="58">&#8220;In a country where the informal sector is large, the rate of economic growth is reduced,&#8221; the IMF said.</p>
<p data-reactid="59">This would suggest that countries such as Tanzania and Nigeria, where the informal economy is 50 to 65 percent of GDP, will fare worse than others such as Mauritius, South Africa and Namibia, where it ranges from between 20 to 25 percent.</p>
<p data-reactid="61">Africa is not alone, of course. Indeed at the moment the region where the informal sector plays the biggest role is Latin America and the Caribbean. It also amounts to around 15 percent of GDP in developed countries.</p>
<p data-reactid="62">But with the large working age population about to explode, the countries of the region are facing a crunch.</p>
<p data-reactid="63">&#8220;Countries need to adopt a balanced approach in the design of policies to grow the formal sector. This means focusing on ways to increase the productivity of the informal sector, while working to support the expansion of formal businesses,&#8221; the IMF said.</p>
<p data-reactid="64">It also called for improved access to finance to create the right kind of jobs.</p>
<p>The IMF blog post can be read at: <a href="http://bit.ly/2vKPAfl">bit.ly/2vKPAfl</a></p>
<div class="Attribution_attribution_o4ojT" data-reactid="65">
<p class="Attribution_content_27_rw" data-reactid="66">Reporting by Jeremy Gaunt; Editing by Andrew Bolton</p>
</div>


Informal economy not enough to handle Africa’s workforce explosion

<p><strong>Wessel Lemmer, Senior Agricultural Economist | Absa</strong></p>
<p>The practice of cultivating grasses such as wheat, nearly 10,000 years ago, laid the foundations of today’s large urbanized communities. And strangely enough, traditional farming practices as we know today have not changed that much during this age.</p>
<p>It is only in the past century that we have seen significant leaps in agriculture, as the challenge of feeding a global population confronted producers. Machinery, irrigation, road and rail infrastructure, markets, and seed modification, are just some examples of technology that have revolutionized crop output in this time.</p>
<p><strong>Water scarcity</strong></p>
<p>In the last two decades, South Africa has lost close to 30% of its farmlands due to water scarcity. Recently, the Western Cape has seen the worst drought to hit the region in the last century. Deciduous fruit growers in the province feel increased pressure to conserve water as rainfall becomes less predictable and other industries demand a greater share of piped water. This means that farmers face the challenge of producing more fruit, while reducing the impact they have of the province’s water supply.</p>
<p>The Western Cape Agricultural Department has decided to fund the development of an open web portal, called <em>FruitLook</em>. This application grants farmer’s access to satellite-based information catered to their location, crop, water usage, and a multitude of other factors. The software also provides detailed weekly updates on actual evapotranspiration, biomass production and leaf nitrogen content.</p>
<p>Statistics released by SA Wine Industry and Systems, showed that 300 000 jobs relied on the wine industry in South Africa, and contributed R36 billion to the nations GDP in 2016. However, factors such as water scarcity and competitive global markets has had its affects, whittling away 900 producers in the past decade.</p>
<p>The Department has now made <em>FruitLook</em> free-to-use for farmers in the region, meaning meteorological data, satellite imagery and available local data that provide near real-time information on crop health, give farmers greater security and control of their businesses. Stress areas such as water, soil and disease, can then be investigated further to determine what solutions farmers can implement to mitigate production loss.</p>
<p><strong>Technology disruption</strong></p>
<p>Mobile technology is aiding in far more than physical data. Farmers in rural areas on the continent are increasingly using mobile solutions to source buyers, other traders that allow for better leveraging, and the best prices possible for their produce, using platforms such as <em>Agrista</em>, of which Absa is a partner.</p>
<p>Simple changes in practices can result in better efficiencies, reduced impact on the environment, and farmland less prone to climatic changes, all of which have a positive influence on production yields. There is much room for development to harness the potential of agriculture in young people’s lives, by improving financial literacy, building technology and innovation skills and creating a new breed of policymakers in order to see the implementation of better policies.</p>
<p>The South African wine industry and agricultural sector as a whole, has shifted towards a more intensified production system. This shift from the traditional sense of farming has included increased irrigation, fuel, mechanization, use of genetically modified seed and fertilizer inputs. In coping with increasing populations, and our fragile ecosystem experiencing more frequent droughts, modern technologies will continue to impact on farming methods we have traditionally come to know.</p>
<p>&nbsp;</p>


Water scarcity drives a new wave of practices in Cape winelands

<p><strong><span class="fn author-name">Signy Wegener, Anne Castles | Macquarie University</span></strong></p>
<p>Children’s oral vocabulary – their knowledge of the sounds and meanings of words – is strongly <a href="http://cdp.sagepub.com/content/24/4/322.full">positively associated</a> with their reading all the way through school. Understanding this relationship is important for making children’s reading as strong as possible.</p>
<p>Our <a href="http://onlinelibrary.wiley.com/doi/10.1111/desc.12577/full">new research</a> has pointed to one mechanism underlying this association: when primary school children know a spoken word, they form an expectation of what that word should look like when it is written down – and they do this even if they have never seen it before.</p>
<p>Using eye-tracking technology, we demonstrated that these expectations can help children to process orally familiar words more quickly when they read them for the first time.</p>
<h2>The tech: understanding eye-tracking</h2>
<p>Advances in technology have made it much easier to use eye-tracking with children. Unlike old systems that were mounted on participants’ heads, new systems (shown below) sit on the desk in front of the child. The eye-tracker finds a small target sticker on the child’s forehead and uses it to work out where the child’s eyes are.</p>
<p><img loading="lazy" decoding="async" class="alignnone wp-image-268504 size-full" src="http://cnbc.africa/wp-content/uploads/2017/08/Kids-Class_Computers_Flickr.jpg" alt="" width="1024" height="683" /></p>
<p>Eye-trackers are special cameras that can follow the movement of the eyes as children read in real time. They provide information about where children look and how long they look for, giving insight into what is happening <a href="http://journals.sagepub.com/doi/10.1177/0963721414530145">when children read</a>.</p>
<p>When the properties of a written word are changed (for example, how many letters it has or how frequently it occurs in written language), this influences how easy or difficult those words are to process.</p>
<p>Put simply, when processing is easy, looking times are shorter. When processing is hard, looking times are longer.</p>
<h2>The experiment: from hearing to seeing</h2>
<p>In order to form expectations about written words that have not yet been seen, children require a combination of knowledge about:</p>
<ul>
<li>the pronunciation and meaning of a spoken word; and</li>
<li>the links between the sounds in spoken words and the written letters that represent them.</li>
</ul>
<p><em>The figure below illustrates that by drawing this information together, children can imagine the written form of words they cannot see.</em></p>
<div id="attachment_268521" style="width: 860px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-268521" class="wp-image-268521 size-full" src="http://cnbc.africa/wp-content/uploads/2017/08/Figure_01.png" alt="" width="850" height="273" /><p id="caption-attachment-268521" class="wp-caption-text">The formation of ‘Finch’. Author provided</p></div>
<p>We taught children in Year 4 the pronunciations and meanings of some made-up words. We told them the words were inventions coming from “<a href="https://doi.org/10.1016/j.jecp.2010.11.005">Professor Parsnip’s</a> invention factory”. Each invention had a name and a function. A “nesh”, for example, is an automatic card shuffler (see below).</p>
<p>During this training period children learned some new oral vocabulary but they never saw any of the words written down.</p>
<p>Later we took the words the children had learned about and some other words they hadn’t learned about, and put them into some simple sentences. We then tracked the movement of the children’s eyes as they read.</p>
<h2>Previously heard versus previously unheard words</h2>
<p>We found that when children had previously learned about a spoken word, they spent less time looking at it than other words they hadn’t heard about. This suggested their reading was enhanced by their previous oral vocabulary.</p>
<p>The time spent looking at the words they had learned about was also affected by how predictable the spellings of the words were. This revealed that children formed advance expectations about how the words were likely to be spelled.</p>
<p>When a word was spelled in a way that was what they expected to see, this helped their reading. For example, if the children had learned the spoken word “nesh”, we showed them the written word <em>nesh</em>.</p>
<p>[embedyt] https://www.youtube.com/watch?v=9YgR-PKh1Ns[/embedyt]</p>
<p>But when we showed them a word that was spelled in a way the children probably did not expect to see, the children were surprised by this and they focused on it longer. For example, the children were surprised when they learned the spoken word “coib” but we showed them the written word <em>koyb</em>.</p>
<p>[embedyt] https://www.youtube.com/watch?v=hXHLKBDyik8[/embedyt]</p>
<p>In the two videos, there is a clear difference in reading times for the unpredictably spelled word <em>koyb</em> and the predictably spelled word <em>nesh</em>.</p>
<p>The fact that children’s reading was affected by whether they knew the spoken form of the word and how predictably it was spelled shows that when children hear spoken words they form expectations about what those words should look like before they see them. In turn, this can help their reading.</p>
<h2>Building oral vocabulary and boosting literacy skills</h2>
<p>Making deposits in children’s spoken word banks – their store of words with known pronunciations and meanings – is an important and practical way of helping to support their literacy development.</p>
<p>Classrooms are logical places to teach children new spoken words, but parents can create learning opportunities at home too. If an unfamiliar word arises during conversation or shared book reading, perhaps try starting a dialogue by asking your child whether they have heard it before.</p>


Op-Ed: How building your child’s spoken word bank can boost their capacity to read

Watch: Climate’s Next Frontier

Watch: China’s Clean Tech Revolution

<p><a href="http://www.cnbc.com/mike-juang/" rel="author">Mike Juang</a> | <span class="twitter-url"><a href="http://twitter.com/mikejuangnews">@mikejuangnews</a></span></p>
<p>There&#8217;s never been a better time to go droning.</p>
<p>Rising varieties, advancing technology and falling costs are making drones flexible, specialized and ubiquitous. New drones, like <a class="inline_asset" title="http://www.cnbc.com/2017/05/25/dji-spark-drone-unveiled.html" href="http://www.cnbc.com/2017/05/25/dji-spark-drone-unveiled.html">the $499 DJI Spark</a>, are heralding a wave of affordable, high-quality drones that are simple to use. It&#8217;s easy for anyone to make a drone fly — and becoming easier to make money from the technology.</p>
<h2>First, you will need to make a small investment</h2>
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<p>It still takes money to make money. The first step in becoming a drone entrepreneur is to make a small investment.</p>
<p>If you&#8217;re looking to fly for anything other than fun, <a class="inline_asset" title="https://www.faa.gov/uas/getting_started/" href="https://www.faa.gov/uas/getting_started/">the FAA requires all pilots to have a Remote Pilot Airman Certificate.</a> Any drone more than 0.55 lbs must <a class="inline_asset" title="https://registermyuas.faa.gov/" href="https://registermyuas.faa.gov/">also be registered with the FAA</a>. While <a class="inline_asset" title="http://www.nbcnews.com/news/us-news/appeals-court-strikes-down-faa-registry-recreational-drones-n763871" href="http://www.nbcnews.com/news/us-news/appeals-court-strikes-down-faa-registry-recreational-drones-n763871">a recent ruling has thrown the FAA&#8217;s authority into flux,</a> &#8220;best practice is to comply with FAA regulations,&#8221; said Christopher Beall, an attorney at Fox Rothschild who specializes in drone litigation.</p>
<p>Then learn to fly well, as in really well. Know your drone inside and out, what it&#8217;s built for and how it flies. Drones built for filming (stable with a high-quality camera but slow) are very different from racing drones (built for durability and speed) and surveying drones (designed to carry specialized equipment, like a LIDAR unit).</p>
<p><b>Start-up costs</b>: $150 (for the license); $5 (for each drone registration)</p>
<h2>Start shooting photos and videos</h2>
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<p>Take it out for a spin and see what you can photograph.</p>
<p>&#8220;Fantastic drone footage doesn&#8217;t necessarily need to be traditional aerial or &#8216;top-down&#8217; style,&#8221; said <a href="http://www.cnbc.com/2017/05/06/thats-no-balloon-its-a-drone-halo-takes-to-the-skies-as-latest-trend-in-uavs.html">drone photographer and Spacial founder Will Chatham</a>. &#8220;Often, the best drone videos are ones that break this mold.&#8221;</p>
<p>Videographer Tim Sessler, for instance, uses <a class="inline_asset" title="https://vimeo.com/163590531#t=2m27s" href="https://vimeo.com/163590531#t=2m27s">a drone fitted with a zoom camera to create a &#8220;dolly zoom&#8221;</a> (also called the &#8220;Vertigo effect,&#8221; after the Hitchcock classic).</p>
<p>Make interesting enough videos and you might even be able to win prizes with your work. Just be sure the work is solid: Festivals are rare, and your entry will compete against pros and industry veterans. The <a class="inline_asset" title="http://nycdronefilmfestival.com/" href="http://nycdronefilmfestival.com/">New York City Drone Film Festival</a> awards prizes like <a class="inline_asset" title="http://freeflysystems.com/alta-8" href="http://freeflysystems.com/alta-8">a $17,500 Alta 8 drone</a> and a $5,000-per-month grant to a top director for one year. The <a class="inline_asset" title="http://www.drone-filmfestival.com/" href="http://www.drone-filmfestival.com/">Peugeot Drone Film Festival in Europe</a> will sponsor a winner to create a drone film for six weeks and puts a DJI drone, travel stipend and two cars at the winner&#8217;s disposal.</p>
<p><a class="inline_asset" title="https://www.airvuz.com/" href="https://www.airvuz.com/">Drone video websites like AirVuz</a> (think YouTube for drones) allow you to set up donation and tip buttons and can even get you hired for freelance filming assignments.</p>
<p><strong>Payout</strong>: Freelance filming opportunities; festival grants and prizes that can run to the thousands of dollars</p>
<h2>Fly commercially</h2>
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<p>From <a href="http://www.cnbc.com/2016/12/14/the-future-arrives-amazons-prime-air-completes-its-first-drone-delivery.html">Amazon package deliveries</a> to <a href="http://www.cnbc.com/2016/11/18/drones-will-transform-the-way-food-is-grown-next-year.html">scanning farms for increased crop yield,</a> commercial drones are finding niches in every field.</p>
<p>&#8220;Many of the industrial applications of [drones] are being adopted by survey and engineering firms,&#8221; said Jordan Rising, director of flight and technology at <a class="inline_asset" title="http://flight-evolved.com/" href="http://flight-evolved.com/">commercial drone specialists Flight Evolved</a>. &#8220;Most of these companies are hiring pilots who can likely expect to make between $50,000 and $70,000, depending on their expertise and the equipment they are operating.&#8221;</p>
<p>Many of the drone pilots who can command the upper salary range are ex-helicopter pilots, not novices. Weekend drone gigs, or contract work, can net $2,500 to $7,000 per job, depending on the type of role. Specialized <a class="inline_asset" title="https://www.dronebase.com/" href="https://www.dronebase.com/">drone job boards, like Dronebase.com</a>, are a good place to start, says Tyler Mason of AirVuz. &#8220;Some industries (i.e. real estate) will post on the site that they&#8217;re looking for pilots, and pilots can then accept the jobs from the Dronebase website.&#8221;</p>
<p>Camera drones are being used to capture <a class="inline_asset" title="http://www.hollywoodreporter.com/news/drone-cameras-big-budgets-how-la-real-estate-trailers-are-selling-mega-mansions-989237" href="http://www.hollywoodreporter.com/news/drone-cameras-big-budgets-how-la-real-estate-trailers-are-selling-mega-mansions-989237">dramatic real estate videos</a> for the residential real estate sales market, an example of growing types of paid freelance work available to drone pilots.</p>
<p><strong>Payout</strong>: $2,500 to $70,000, depending on experience and expertise</p>
<h2>Win a drone race and become a sponsored pilot</h2>
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<p>How does <a href="http://www.cnbc.com/2017/03/13/drone-racing-league-six-figure-salary.html">a $100,000 contract sound</a>?</p>
<p>An easy way to score a big payout is to start competing in drone races and hopefully win races and sponsorships.</p>
<p>&#8220;It&#8217;s allowed [pilots] to quit their jobs and do what they do full-time,&#8221; DRL co-founder and CEO Nick Horbaczewski said in an interview with CNBC earlier this year. Dominate the global field and you might even score the $100,000 contract, plus sponsorships from big technology firms such as Samsung.</p>
<p>Even <a class="inline_asset" title="https://www.airvuz.com/blog/how-to-make-money-flying-your-drone" href="https://www.airvuz.com/blog/how-to-make-money-flying-your-drone">social media companies like AirVuz</a> and <a class="inline_asset" title="https://www.florotors.com/" href="https://www.florotors.com/">framemakers like FloRotoRs </a>sponsor pilots, helping defray the cost of parts like frames and spare propellers. Beware — <a href="http://www.cnbc.com/2017/03/10/drone-invasion-is-moving-from-photography-and-deliveries-to-racing.html">races are fast (up to 60 mph), crashes are fierce,</a> and replacement parts are a must.</p>
<p><strong>Payout</strong>: Up to $100,000</p>
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3 ways you can turn a cheap drone into a money-making job

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<p>The bounce in Treasury yields witnessed after the election of <a href="http://www.cnbc.com/donald-trump/" target="_self">Donald Trump</a> is now decaying in the D.C. swamp. If the <a href="http://www.cnbc.com/id/43752521" target="_self">Federal Reserve</a> continues to ignore this slow growth and deflationary signal from the bond market and continues along its current rate hiking path, the yield curve will invert by the end of this year and an equity market plunge and a recession is sure to follow.</p>
<p><a class="inline_asset" title="http://www.investopedia.com/terms/i/invertedyieldcurve.asp?lgl=myfinance-layout-no-ads" href="http://www.investopedia.com/terms/i/invertedyieldcurve.asp?lgl=myfinance-layout-no-ads" target="_self">An inverted yield curve</a>, which has correctly predicted the last seven recessions going back to the late 1960s, occurs when short-term interest rates yield more than longer-term rates. Why is an inverted yield curve so crucial in determining the direction of markets and the economy? Because when bank assets (longer-duration loans) generate less income than bank liabilities (short-term deposits), the incentive to make new loans dries up along with the money supply. And when asset bubbles are starved of that monetary fuel they burst. The severity of the recession depends on the intensity of the asset bubbles in existence prior to the inversion.</p>
<p>The Fed has traditionally controlled overnight lending rates between banks. That all changed when the Fed started to buy longer-term Treasurys and mortgage backed securities as a result of the Great Recession. Nevertheless, outside of these quantitative easing programs, the long end of the yield curve is primarily influenced by the inflationary expectations of investors. The yield curve inverts when central banks believe inflation is headed higher; but bond investors are convinced of the opposite.</p>
<div id="inline_movable_ad"> The last two times the yield curve inverted was in the years 2000 and 2006. The inversion and subsequent recession that began in the year 2000 caused NASDAQ stocks to plummet 80 percent. The following inversion caused the Great Recession in which the S&amp;P 500 dropped 50 percent and, according to the Case/Shiller 20-City Composite Index, home prices fell over 30 percent.</div>
<p>This next inversion will occur in the context of record high equity, real estate and bond market valuations that will require another government bailout. However, this time around the recession will commence with the balance sheets of the Fed and Treasury extremely overleveraged right from the start.</p>
<p>As you can see from the chart below, if the 10-year note yield (orange line) continues to fall along its current trajectory; and the Fed plods along with its avowed Dot Plot hiking path (blue line), the yield curve should invert around the end of 2017. Market chaos and another brutal recession should soon follow.</p>
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<p>What could prevent this baneful scenario from happening?</p>
<p>One of the most popular Wall Street myths is that long-term interest rates rise simply because the Fed is raising the Fed Funds Rate (F.F.R.). This normally occurs because the central bank is trying to catch up to rising inflation and is initially behind the curve. However, later on in the tightening cycle long rates begin to decline as inflation is stamped out of the economy.</p>
<p>For example, from June 2004 thru June 2006 the Fed raised the F.F.R. from 1 percent-5.25 percent; but the 10-year note only increased from 4.7 percent-5.2 percent. That means the benchmark note went up just 50 basis points even though the F.F.R. was raised by 425 basis points. What is especially notable here is that GDP growth was well above 3 percent in both 2005 and 2006; as opposed to today&#8217;s environment of 1.6 percent GDP growth for all of 2016, and just 1.2 percent in the first quarter of 2017. The fear of recession and deflation is the primary reason why the 10-year note yield is currently falling.</p>
<p>The Fed has been tightening monetary policy since it started to taper its $80 billion per month quantitative easing program back in December 2013. It has subsequently raised rates three times and is now most likely already ahead of the curve due to the anemic state of the economy. But, as always, the Fed fails to read the correct economic indicators and is now fixated on the low unemployment rate and its dubious effect on inflation.</p>
<p>Some argue that the yield curve won&#8217;t invert if economic growth stalls because the Fed will then truncate its rate hike path. And indeed there is a lot of evidence for the second quarter recovery narrative to be proven false. For instance, April data on existing home contract closings declined 2.3 percent month over month, to a 5.57 million annual rate versus a forecast of 5.65 million. And new homes weren&#8217;t much better as single family home sales declined 11.4 percent to 569,000 annualized vs. the 610,000 forecast. Pending home sales also disappointed falling 1.3 percent. Then we had durable goods falling 0.7 percent, and core capital goods orders showed no growth at all.</p>
<p>These data points highlight the reality that the second quarter will not spring higher from the anemic first quarter growth rate. But the problem is that the F.F.R. is already close to 1 percent. Therefore, even if we get just two more hikes before the Fed realizes growth is faltering, that rate will be near 1.5 percent. If the economy slows enough that even the Fed takes notice, the 10-year note yield should retreat back to where it was in July of 2015 (1.35 percent). In this second scenario, the yield curve inverts despite the Fed&#8217;s failure to consummate its dot plot plan.</p>
<p>Of course, there is a small chance that the yield curve doesn&#8217;t invert due to an aggressive reverse QE program&#8211;a very quick unwinding of the Fed&#8217;s $4.5 trillion balance sheet. While this may avoid an inversion of the yield curve, it would also siphon off capital from the private sector, as investors divert yet more money to the Treasury.</p>
<p>An aggressive selling of the Fed&#8217;s balance sheet is a very unlikely scenario given the minutes of the May Federal Open Market Committee meeting. In that meeting the Fed decided to merely taper the re-investment of its balance sheet, which is the pace in that it stops reinvesting its assets. With a total debt to GDP ratio of 350 percent, this third scenario has very low odds of occurring; but should remand the economy into a recession even if such a plan is deployed.</p>
<p>Therefore, the only rational way to avoid an inverted yield curve, market chaos and a recession is if long-term Treasury yields reverse their long-term trend lower due to a rapid increase in GDP growth. This would only occur if Trump&#8217;s agenda of repatriation of foreign earnings, tax cuts and infrastructure spending is imminently adopted. But the probability of this happening very soon is getting lower by the day.</p>
<p>An inverted yield curve will lead to market disorder as it did in 2000 and 2006. But this next recession starts with our national debt over $20 trillion dollars and the Feds balance sheet at $4.5 trillion. Therefore, when the yield curve inverts for the third time this century you can expect unprecedented chaos in markets and the economy to follow shortly after. This is because the yield curve will not only invert at a much lower starting point than at any other time in history but also with the Fed and Treasury&#8217;s balance sheets already severely impaired.</p>
<p>There will be unprecedented volatility between inflation and deflation cycles in the future due to these factors. This represents a huge opportunity for those that can identify these inflexion points and know where to invest. To be more specific, sell your long positions and get short once the curve inverts; and then be prepared to hedge against inflation when the Fed responds with helicopter money.</p>
<p><em>Commentary by Michael Pento, the president and founder of Pento Portfolio Strategies. He is also author of the book, &#8220;<a class="inline_asset" href="http://www.amazon.com/Coming-Bond-Market-Collapse-ebook/dp/B00C42S5KE/ref=sr_1_1?s=books&amp;ie=UTF8&amp;qid=1368206596&amp;sr=1-1" target="_blank" rel="noopener noreferrer">The Coming Bond Market Collapse</a>,&#8221; and </em><em>produces the weekly podcast, &#8220;<a class="inline_asset" href="http://pentoport.com/blog/subscription/" target="_blank" rel="noopener noreferrer">The Mid-week Reality Check.</a>&#8220;</em></p>
<p><em><strong>Follow CNBC&#8217;s Opinion section on Twitter <a class="inline_asset" href="http://www.twitter.com/CNBCopinion" target="_blank" rel="noopener noreferrer">@CNBCopinion</a>.</strong></em></p>
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Op-ed: This market indicator has predicted the past 7 US recessions. Here’s what it’s signalling now

<p>On Wednesday, May 17, the government’s subsidised maize flour (locally referred to as unga) became available in supermarkets at KSh90 for a two-kilogramme pack – down from KSh150 previously – just in time to halt opposition momentum on the issue of rocketing prices on the campaign trail. Customers are limited to two packs each.</p>
<p>Prices of milk and sugar have also become a concern for the public and import duties have thus been removed for milk powder and sugar in addition to maize.</p>
<p>Minister of Agriculture Willy Bett announced on Tuesday, May 16, that the government would subsidise maize to the tune of KSh6.5bn. This amounts to around 44% of the cost of a 90 kg bag of maize to millers – selling imported maize that costs KSh3,600 per 90 kg bag to millers for KSh2,300 (locally-produced maize reportedly costs KSh4,620 per 90 kg).</p>
<p>The subsidy is expected to stay in place until the end of July – elections are scheduled for August 8.</p>
<p>The rising cost of food has threatened to give the opposition the boost it needs to take President Uhuru Kenyatta’s Jubilee Party (JPK) on on the campaign trail after a late start due to wrangling over who would head its alliance.</p>
<p>On May 14, presidential candidate for the opposition alliance, the National Super Alliance (Nasa), Raila Odinga tweeted “We have heard your cries. The cost of living has become unbearable. Just 86 days na mambo yatabadilika [and things will change].” But with the government’s maize subsidy, things have changed sooner and the wind has been taken out of the opposition’s sails somewhat.</p>
<p>With this being said, the latest polling data from Radio Africa Group, published in The Star, shows that Mr Odinga’s support has increased since March.</p>
<p>The poll showed that 40% of respondents would vote for Mr Odinga compared to 24% in March.</p>
<p>While this appears to be a big bump in his numbers, it should be kept in mind that he was only formally announced as Nasa’s flagbearer in April, so the increase was expected as previously-undecided voters waiting to hear who would head the opposition threw their support behind him – the proportion of undecided voters dropped from 20% in March to 10% in the latest poll.</p>
<p>Mr Kenyatta, meanwhile, saw his support drop slightly from 51% in March to 49%.</p>
<p>Polling by Ipsos in February had indicated 47% of voters would cast their ballots for Mr Kenyatta and only 30% would choose Mr Odinga, but again that was prior to the latter being announced as the opposition candidate.</p>
<p><img loading="lazy" decoding="async" class="alignnone size-medium wp-image-124460" src="http://cnbc.africa/wp-content/uploads/2017/05/Kenya-1-300x200.png" alt="" width="300" height="200" /> <img loading="lazy" decoding="async" class="alignnone size-medium wp-image-124461" src="http://cnbc.africa/wp-content/uploads/2017/05/Kenya-2-300x201.png" alt="" width="300" height="201" /></p>
<p>The maize subsidy is only the latest in a number of developments Mr Kenyatta hopes will improve his chances – including abolishing fees for title deed searches, cutting duties on vehicle parts to boost employment in the automobile industry and paying government doctors the salaries that had been withheld during their 100-day strike.</p>
<p>On May 1, he announced that the minimum wage would go up 18%.</p>
<p>The largesse can be expected to continue right up until polling stations open – much to the dismay of those keeping a wary eye on the country’s budget deficit.</p>
<p>Fiscal policy remains a concern in Kenya, with the government attempting to reconcile an ambitious infrastructure investment programme with fiscal consolidation efforts.</p>
<p>While the 2017/18 budget proposal is generally considered a departure from recent expansionary budgets, with official projections putting the 2017/18 budget deficit at 6% of GDP compared with government expectations of a 9% of GDP deficit this year, the expenditure profile will see a significant transition away from development spending towards recurrent spending – a reduction in development spending while maintaining an elevated recurrent expenditure bill is not the ideal form of fiscal consolidation.</p>
<p>Government finances will remain a salient source of macroeconomic risk due to the inability to hit fiscal targets and the numerous channels for potential fiscal slippages.</p>
<p>The devolution process remains a concern, and the upcoming elections could hamper efforts to improve government financial management, delay fiscal consolidation plans, and potentially lead to perceptions of political instability – thus increasing borrowing costs and perhaps necessitating a reorientation of spending.</p>
<p>In February, Ipsos’ opinion poll showed that the high cost of living and corruption were considered the most serious problems facing the country.</p>
<p>Since then, food prices have increased sharply and the US has cancelled aid to the health ministry citing worries over corruption – graft in the health ministry is closely linked to Mr Kenyatta due to his sister and cousin being accused of unfairly benefitting from government contracts in the ‘HealthGate’ scandal last October.</p>
<p>This would suggest that the opposition would have the upper hand in campaigning.</p>
<p>However, voting in Kenya traditionally runs along ethnic lines rather than reacting to issues. Furthermore, what the recent maize subsidy clearly illustrates is the advantage of incumbency that Mr Kenyatta enjoys.</p>
<p>Next month he is expected to cut the ribbon on the Mombasa-Nairobi line of the Standard Gauge Railway – a great photo opportunity for his campaign.</p>
<p>Another significant factor aiding JPK is that voter registration in its strongholds was higher than in the opposition areas.</p>
<p>Thus, we still believe Mr Kenyatta is the favourite to take the election.</p>
<p style="margin-bottom: 12.0pt;">


Op-Ed: Kenya – Kenyatta takes the wind out of opposition sails with maize subsidy

<p>When rich countries wrote off billions of dollars of African debt in 2005, they hoped governments would think twice about borrowing again in costly foreign currencies.</p>
<p>Over a decade later, most sub-Saharan African countries still rely on U.S. dollar-denominated debt to finance their economies. Some investors say this is sowing the seeds of future debt crises if local currencies devalue and make dollar debt repayments more expensive.</p>
<p>Aside from South Africa and Nigeria, governments have not yet done enough to develop capital markets that would have allowed them to raise more money in their own currencies, investors say.</p>
<p>United Nations trade body UNCTAD estimates that Africa&#8217;s external debt stock rapidly grew to $443 billion by 2013 through bilateral borrowing, syndicated loans and bonds. But since then sharp currency devaluations across the continent have pushed up the cost of servicing this debt pile, which continues to grow.</p>
<p>&#8220;We all thought (Africa) was going to be the next emerging market. Governments should have been getting rid of dollar liabilities and moving into local currency liabilities, which is what Brazil did 20 years ago and Mexico 30 years ago,&#8221; said Bryan Carter, head of emerging debt at BNP Paribas Investment Partners.</p>
<p>In 2007 Carter was optimistic enough to hold a third of his fund in sub-African local debt. Now he has zero exposure outside of South Africa, he said, adding: &#8220;They just fell back into the &#8216;original sin&#8217; trap of borrowing in dollars.&#8221;</p>
<p>After the debt, owed to multilateral organizations such as the International Monetary Fund, was wiped out, investors such as Carter were prepared to accept the risks of buying local currency bonds, in exchange for higher returns.</p>
<p>That would have allowed governments to run their economies, regardless of exchange rate moves between the U.S. dollar and domestic currencies. Currency and interest rates fluctuations have long been a source of emerging market crises.</p>
<p>Stimulating local bond markets, could have helped start a domestic savings and investment industry and also helped to reduce the reliance on commodities exports &#8211; a major source of the dollar income needed for debt repayments.</p>
<p><strong>LITTLE PROGRESS</strong></p>
<p>But there&#8217;s been little progress on the steps needed to foster local debt markets &#8211; pension reform, inflation targeting and making currencies more flexible. Those markets that have emerged are small and with low trading volumes, a similar story to many African equity markets.</p>
<p>Data from Frankfurt-based index provider Concerto Financial Solutions shows 37 sub-Saharan African nations with outstanding local currency debt of just under $260 billion by end-2016.</p>
<p>Of that $146 billion is from Africa&#8217;s most developed economy, South Africa, while Nigeria accounted for $40 billion &#8211; the only African markets big and liquid enough to qualify for the GBI-EM index, widely used by emerging debt investors</p>
<p>Concerto said stripping out South Africa, 16 African countries have borrowed roughly $30 billion in bonds since 2007. In addition, China has extended tens of billions of dollars in loans and some countries have new debts to multilateral lenders.</p>
<p>&#8220;While Africa&#8217;s current external debt ratios currently appear manageable, their rapid growth in several countries is a concern and requires action if a recurrence of the African debt crisis of the late 1980s and the 1990s is to be avoided,&#8221; UNCTAD warned last year.</p>
<p>Other emerging markets in contrast have shifted almost entirely to borrowing at home. Debt denominated in emerging currencies totals about $15 trillion, or 80 percent of the developing world&#8217;s bond stock.</p>
<p><strong>EFFORTS AND ACHIEVEMENTS</strong></p>
<p>Investors do note some positives such as better regulation, growing pension assets and longer 10-20 year bond tenors in many countries. Kenya recently sold the world&#8217;s first mobile phone-based bond to ordinary citizens</p>
<p>And Ghana last month auctioned $2.2 billion in cedi debt, the largest ever daily transaction in sub-Saharan Africa. The deal attracted Michael Hasenstab, Franklin Templeton&#8217;s high-profile fund manager.</p>
<p>A Ghanaian official said, speaking on condition of anonymity, the government would focus this year on extending the maturity of domestic bonds and would not issue Eurobonds.</p>
<p>Zambian finance minister Felix Mutati too said he wanted domestic borrowing to be the first port of call in future, noting the 2017 budget was being financed largely on domestic markets.</p>
<p>&#8220;The domestic market, you cannot just go and dip a bucket into it. It is a delicate operation, the reason being that government borrowing can crowd out the private sector,&#8221; Mutati told Reuters, when asked why the government had continued borrowing from overseas.</p>
<p>Some argue external borrowing is key in the early stages of a country&#8217;s development.</p>
<p>&#8220;The (foreign) borrowing has been invested in infrastructure projects that will drive growth&#8230;.it is setting the base for future economic performance,&#8221; Rwandan central bank governor John Rwangombwa said.</p>
<p><strong>GROWING EXPONENTIALLY</strong></p>
<p>There is no exact data on volumes in local markets. But Kenya, one of the bigger markets with some $12 billion worth of Treasury bonds, trades the equivalent of $16.5 million daily, stock exchange data shows. South African bonds trade $2 billion daily.</p>
<p>&#8220;Liquidity is never big enough for offshore investors to really play in and out of the market,&#8221; said Delphine Arrighi, a fund manager at Old Mutual Global Investments.</p>
<p>But what is a headache for foreign investors has serious consequences for countries and some are already apparent.</p>
<p>Lack of liquidity, transparency and hedging mechanisms contribute to keeping local borrowing costs high. And external debt ratios have soared as African currencies collapsed against the dollar from 2013. Zambian government debt has doubled since 2012 and three-quarters is in foreign currency, up from 40 percent back then.</p>
<p>Ghana&#8217;s debt is over 60 percent of annual economic output, from 50 percent in 2005. Half is in dollars.</p>
<p>Mozambique&#8217;s debt default last year may be the first of many, some fear [nL5N17P4CL].</p>
<p>&#8220;The debt of these countries has just grown exponentially and so now they have no hope of getting there with either a new round of debt relief or default and restructuring,&#8221; Carter of BNPIP said. &#8220;The priority right now is that they absolutely must stop borrowing in dollars.&#8221;</p>
<p>(Additional reporting by Duncan Miriri in Nairobi; Clement Uwiringiyimana in Kigali; Chris Mfula in Lusaka and Matthew Mpoke Bigg in Accra; editing by Anna Willard)</p>


A decade after debt forgiveness, Africa still hooked on dollars

<p>Sorry, but somebody had to say it.</p>
<p>“Africa Rising” was a good thing while it lasted. Great slogan. Short and punchy. Five syllables. Great PR value. And the media was using it in nearly every story they wrote about Africa. Actually, they invented it. It was all things Africa. It was inspiring. Unifying. It got people believing again. Finally, there was hope!</p>
<p>But, like everything else in life, what goes up must come down. Even Africa Rising.</p>
<p>Because the good vibes only last so long especially when the results don’t match the hype. And once that happens, people stop believing. You’ve probably noticed that you don’t hear that phrase too often anymore. That’s because today, unfortunately, Africa is no longer rising. It’s falling.</p>
<p>However, one needs to be mindful of painting the entire continent with a single brush. There are 54 separate countries that make up Africa. And of course, some of them are turning out strong growth numbers. Ethiopia is projected to hit 6.7% real GDP growth in 2017. <a href="http://cnbc.africa/news/east-africa/2017/05/16/rwanda-growth/">Rwanda is looking at 6.6%</a> and Kenya at 6.0%. Tanzania, 6.9%. And these figures are projected irrespective of the current drought conditions engulfing East Africa.</p>
<p>But still, much of the continent is in trouble. Just look at sub-Saharan Africa’s leading economies as a bellwether. They’re in tatters. South Africa was reduced to junk status by the rating agencies and Nigeria is gasping for air as its economy continues to be smothered under the weight of weak oil prices.</p>
<p>Africa’s slide started with the commodities crash in 2015. Before that countries rode the global demand for natural resources for years. Things were good. Everyone looked the other way. “Nothing to fix if it’s not broken” as they say. Commodities were hot and were the continent’s key economic drivers. But then, prices hit the skids and coupled with underdeveloped and underfunded private sectors, much of Africa was left twisting in the wind.</p>
<p>Ironically, Africa’s greatest strength was also its biggest weakness. Because if you live by commodities alone, you’ll die by them too. All you need is one bad economic cycle and before you know it, you’re down on the canvas, flat on your back, with the referee standing above you counting to ten.</p>
<p>Africa simply couldn’t absorb a punch like that. It was too fragile to begin with. Now, its main source of revenue was flattened. And let’s face it, there has never been much room for error there to begin with. In many ways, Africa is like a person that has no savings. One day, he loses his job. The next day he realises he has no money in the bank and no means to support himself.</p>
<p>Banking and credit in most African countries are also in a tailspin. Nigeria is in yet another full-blown banking crises. Simply stated, banks aren’t lending. The economy is frozen in place and nobody is willing to make a move. Businesses are afraid to spend and hire. There are few dollars to be had and the Naira is limping along. Because of this, many debt and equity investors have pulled out of Nigeria all together, at least until oil makes a comeback. And, irrespective of some positive signs, it could take years for oil to return to its previous levels, assuming it ever does at all. Recovery is a slow process.</p>
<p>South Africa, the continent’s most diversified economy, is also up against the wall. Real GDP growth is projected at a paltry 1.2%. Businesses there are in a holding pattern. And the recent downgrades to its credit rating by <a href="http://cnbc.africa/news/southern-africa/2017/04/03/south-africa-long-term-foreign-currency-rating-cut-bb-political-institutional-uncertainty-outlook-negative/">Standard &amp; Poor’s</a> and <a href="http://cnbc.africa/trending/sa-downgrade/2017/04/07/fitch-downgrades-sa/">Fitch</a> served as a swift kick in the bum to an otherwise proud country. South Africa has slowed to a crawl as it contends with one political scandal after the other, further eroding confidence in its future. And embattled President, Jacob Zuma, is desperate to hold onto power as he tries to fend off the endless corruption charges and a near complete loss of confidence.</p>
<p>So, Africa is in a full out tizzy. Enter China. But let’s be clear here, China’s aspirations are in China’s self-interest alone. Not Africa’s. They might say otherwise, but make no mistake, it’s Colonisation 2.0. And given the current state of affairs in Africa, when China calls, Africa picks up the phone.</p>
<p><a href="http://cnbc.africa/news/east-africa/2017/05/11/china-trade-with-africa/">China pounced on Africa</a> for two primary reasons. First, access to commodities. Raw, out of the ground natural resources, Africa has what China needs to power its economy. And second, China eyed Africa because it was vulnerable. With Africa in a weakened state, China saw the chance to embed itself across the continent. And it’s done just that by spreading investment and manpower to many African governments in return for the keys to the commodities kingdom.</p>
<p><strong>READ</strong>: <a href="http://cnbc.africa/news/2016/06/28/is-america-ready-for-africa/">Africa has huge potential, it&#8217;s a pity too few Americans know this</a></p>
<p>But this has rarely, if ever, trickled down to the man and woman on the streets of Lagos or Kinshasa. The continent is plagued by the same problems it’s always had. Rampant corruption. Payment default. Contract default. Kidnappings. Political power plays. Currency manipulations. Scandals. Coups. You name it. This scene has repeated itself time and again throughout Africa’s history. And all the private investment capital, global support and financial aid in the world never seems to correct the problem.</p>
<p>So, this is Africa today. I’m really hoping it can make a comeback. It would be great to see it “rise” again. And I think it can if it learns some of the harder lessons from the current downturn. If it doesn’t though, history will continue to repeat itself with every new boom and bust cycle, and prevent Africa from developing much beyond where it is today.</p>
<p>*<em>David S. Levin is a Managing Partner at Nexus Capital Markets, LLC, micro-Blogging on all things Africa. A New York investor’s view of Africa and other emerging economies. Nexus Capital Markets is a leading Pan-African/U.S. investment bank located in NY and JHB.</em></p>


Op-ed: Africa Falling, a letter from America

<p>Brian Roberts | CNBC Contributor</p>
<p>Millennials don&#8217;t have it like the boomer generation.</p>
<p>Compared to our predecessors, the cost of living is higher, taxes are higher and decent paying jobs are scarcer. Without the basics covered, it&#8217;s that much harder for millennials to land ― let alone excel in ― leadership roles.</p>
<p>It&#8217;s hard to want to put in extra effort at the office when you&#8217;re feeling undervalued. For millennials who feel caged by constraints like this, the solution may be a lot simpler than you think: Pack your bags<i>.</i></p>
<p>That&#8217;s right. Move.</p>
<p><a class="inline_asset" href="http://growella.com/" target="_self">Growella</a>, a media site that helps millennials make smart money, career and lifestyle choices, conducted a comprehensive study on the <a class="inline_asset" href="https://growella.com/working/top-ranked-cities-for-millennials/" target="_self">best cities for millennials</a> in the U.S. The cities were ranked by pulling data from more than 70 public, available resources.</p>
<p>They looked at everything from availability of entry-level jobs to take home pay and more. Ultimately, the study boiled down to answering this question: Is it possible to earn a living, have a life and still set aside money for your future? And if so, where?</p>
<p>For instance, New York City wages are higher compared to a lot of places, but net income ― what you take home ― isn&#8217;t.</p>
<p>&#8220;What you make isn&#8217;t always &#8216;what you make.&#8217; Favorable tax rates and a low cost of living can be the great equalizer in some cities,&#8221; says Dan Green, the founder and CEO of Growella.</p>
<p>In short: Cities with greater career opportunities and less expenses might afford millennials opportunities they crave. These include the ability to focus on bigger goals and become leaders in fields they&#8217;re passionate about.</p>
<p>&#8220;Each of the top five has a character and prevailing industry, from technology and robotics to finance and other fields,&#8221; he says.</p>
<p>According to the study, these are the top five cities for millennials and their prevailing industries:</p>
<h2 class="subtitle">1. Durham, North Carolina</h2>
<div id="attachment_123649" style="width: 610px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-123649" class="size-full wp-image-123649" src="http://cnbc.africa/wp-content/uploads/2017/05/Durham.600x400.jpg" alt="" width="600" height="400" /><p id="caption-attachment-123649" class="wp-caption-text">Barry Winiker | Getty Images<br />An office complex in Durham, North Carolina</p></div>
<p><strong>Industries:</strong> Life sciences and IT</p>
<p>For millennials with leadership aspirations in the life sciences or IT sector, go to Durham. The city is home to Duke University and Research Triangle Park, a preeminent high-tech research hub. Plus, with over 100,000 residents between the ages of 18 to 34, there&#8217;s no shortage of other ambitious millennials to connect with.</p>
<h2 class="subtitle">2. Pittsburgh, Pennsylvania</h2>
<div id="attachment_123674" style="width: 610px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-123674" class="size-full wp-image-123674" src="http://cnbc.africa/wp-content/uploads/2017/05/104460422-Pittsburg.600x400.jpg" alt="" width="600" height="400" /><p id="caption-attachment-123674" class="wp-caption-text">Danita Delmont | Getty Images</p></div>
<p><strong>Industries:</strong> Tech and robotics</p>
<p>When people first think of Pittsburgh, they think of steel. But the &#8216;Steel City&#8217;, once known as a vibrant steel manufacturing city, is now buzzing with &#8220;technology and robotics&#8221; according to Dan Green. Ambitious millennials will also love Pittsburgh for it&#8217;s rich art and cultural scene, and with over 346,400 people between the ages of 18 to 34 in Pittsburgh, there&#8217;s no shortage of folks to enjoy it with.</p>
<h2 class="subtitle">3. Nashville, Tennessee</h2>
<div id="attachment_123675" style="width: 610px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-123675" class="size-full wp-image-123675" src="http://cnbc.africa/wp-content/uploads/2017/05/104460390-Nashville.600x400.jpg" alt="" width="600" height="400" /><p id="caption-attachment-123675" class="wp-caption-text">Danita Delmont | Getty Images<br />The Nashville, Tennessee skyline</p></div>
<p><strong>Industries:</strong> Healthcare and publishing</p>
<p>If you&#8217;re looking to make a name for yourself in healthcare, publishing ― and we can&#8217;t forget music ― then Nashville may be the place for you. Having just spent a week there with other young professionals, I can attest to the opportunities Nashville has for anyone looking to make a name, regardless of the industry. Although you may know it as &#8220;Music City&#8221; my one Lyft driver referred to it as &#8220;Crane City&#8221; due to the sheer number of cranes dotting the skyline, office buildings and apartments.</p>
<h2 class="subtitle">4. Des Moines, Iowa</h2>
<div id="attachment_123676" style="width: 610px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-123676" class="size-full wp-image-123676" src="http://cnbc.africa/wp-content/uploads/2017/05/104460374-Des_Moines.600x400.png" alt="" width="600" height="400" /><p id="caption-attachment-123676" class="wp-caption-text">Jeremy Woodhouse | Getty Images<br />The Des Moines, Iowa skyline</p></div>
<p><strong>Industry:</strong> Insurance</p>
<p>This city, although not as popular as the other names on this list, is one of the best places for leaders in America. Business costs are far below the national average, and it&#8217;s been a hotbed of economic growth since 2010. Insurance is a key industry here.</p>
<div class="group-container ">
<div class="group">
<p>Millennials don&#8217;t have it like the boomer generation.</p>
<p>Compared to our predecessors, the cost of living is higher, taxes are higher and decent paying jobs are scarcer. Without the basics covered, it&#8217;s that much harder for millennials to land ― let alone excel in ― leadership roles.</p>
<p>It&#8217;s hard to want to put in extra effort at the office when you&#8217;re feeling undervalued. For millennials who feel caged by constraints like this, the solution may be a lot simpler than you think: Pack your bags<i>.</i></p>
<div id="inline_movable_ad"></div>
<p>That&#8217;s right. Move.</p>
<p><a class="inline_asset" href="http://growella.com/" target="_self">Growella</a>, a media site that helps millennials make smart money, career and lifestyle choices, conducted a comprehensive study on the <a class="inline_asset" href="https://growella.com/working/top-ranked-cities-for-millennials/" target="_self">best cities for millennials</a> in the U.S. The cities were ranked by pulling data from more than 70 public, available resources.</p>
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<p><span class="video-icon"><a class="" href="http://video.cnbc.com/gallery/?video=3000603143" data-videoid="3000603143" data-videotype=""><img loading="lazy" decoding="async" title="Professionals in these cities take home the most money after rent and taxes" src="http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2017/03/21/104354743-makeit_cities_disposable_income_after_rent_taxes_mezz.600x400.jpg?v=1490104745" alt="Professionals in these cities take home the most money after rent and taxes" width="600" height="400" /></a></span></p>
<div class="headline">Professionals in these cities take home the most money after rent and taxes</div>
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<div class="group">
<p>They looked at everything from availability of entry-level jobs to take home pay and more. Ultimately, the study boiled down to answering this question: Is it possible to earn a living, have a life and still set aside money for your future? And if so, where?</p>
<p>For instance, New York City wages are higher compared to a lot of places, but net income ― what you take home ― isn&#8217;t.</p>
<p>&#8220;What you make isn&#8217;t always &#8216;what you make.&#8217; Favorable tax rates and a low cost of living can be the great equalizer in some cities,&#8221; says Dan Green, the founder and CEO of Growella.</p>
<p>In short: Cities with greater career opportunities and less expenses might afford millennials opportunities they crave. These include the ability to focus on bigger goals and become leaders in fields they&#8217;re passionate about.</p>
<p>&#8220;Each of the top five has a character and prevailing industry, from technology and robotics to finance and other fields,&#8221; he says.</p>
<p>According to the study, these are the top five cities for millennials and their prevailing industries:</p>
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<h4 class="subtitle">1. Durham, North Carolina</h4>
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<p><img loading="lazy" decoding="async" src="http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2017/05/10/104460386-Durham.600x400.jpg?v=1494423377" alt="An office complex in Durham, North Carolina" width="600" height="400" /></p>
<div class="attribution">Barry Winiker | Getty Images</div>
<div class="caption">An office complex in Durham, North Carolina</div>
</div>
<div class="group">
<p><strong>Industries:</strong> Life sciences and IT</p>
<p>For millennials with leadership aspirations in the life sciences or IT sector, go to Durham. The city is home to Duke University and Research Triangle Park, a preeminent high-tech research hub. Plus, with over 100,000 residents between the ages of 18 to 34, there&#8217;s no shortage of other ambitious millennials to connect with.</p>
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<h4 class="subtitle">2. Pittsburgh, Pennsylvania</h4>
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<p><img loading="lazy" decoding="async" src="http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2017/05/10/104460422-Pittsburg.600x400.jpg?v=1494424090" alt="586905657" width="600" height="400" /></p>
<div class="attribution">Danita Delmont | Getty Images</div>
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<p><strong>Industries:</strong> Tech and robotics</p>
<p>When people first think of Pittsburgh, they think of steel. But the &#8216;Steel City&#8217;, once known as a vibrant steel manufacturing city, is now buzzing with &#8220;technology and robotics&#8221; according to Dan Green. Ambitious millennials will also love Pittsburgh for it&#8217;s rich art and cultural scene, and with over 346,400 people between the ages of 18 to 34 in Pittsburgh, there&#8217;s no shortage of folks to enjoy it with.</p>
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<h4 class="subtitle">3. Nashville, Tennessee</h4>
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<p><img loading="lazy" decoding="async" src="http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2017/05/10/104460390-Nashville.600x400.jpg?v=1494423568" alt="The Nashville, Tennessee skyline" width="600" height="400" /></p>
<div class="attribution">Danita Delmont | Getty Images</div>
<div class="caption">The Nashville, Tennessee skyline</div>
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<p><strong>Industries:</strong> Healthcare and publishing</p>
<p>If you&#8217;re looking to make a name for yourself in healthcare, publishing ― and we can&#8217;t forget music ― then Nashville may be the place for you. Having just spent a week there with other young professionals, I can attest to the opportunities Nashville has for anyone looking to make a name, regardless of the industry. Although you may know it as &#8220;Music City&#8221; my one Lyft driver referred to it as &#8220;Crane City&#8221; due to the sheer number of cranes dotting the skyline, office buildings and apartments.</p>
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<h4 class="subtitle">4. Des Moines, Iowa</h4>
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<p><img loading="lazy" decoding="async" src="http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2017/05/10/104460374-Des_Moines.600x400.png?v=1494423113" alt="The Des Moines, Iowa skyline" width="600" height="400" /></p>
<div class="attribution">Jeremy Woodhouse | Getty Images</div>
<div class="caption">The Des Moines, Iowa skyline</div>
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<p><strong>Industry:</strong> Insurance</p>
<p>This city, although not as popular as the other names on this list, is one of the best places for leaders in America. Business costs are far below the national average, and it&#8217;s been a hotbed of economic growth since 2010. Insurance is a key industry here.</p>
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<h4 class="subtitle">5. Charlotte, North Carolina</h4>
<div id="attachment_123677" style="width: 610px" class="wp-caption alignnone"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-123677" class="size-full wp-image-123677" src="http://cnbc.africa/wp-content/uploads/2017/05/104460361-Charlotte.600x400.jpg" alt="" width="600" height="400" /><p id="caption-attachment-123677" class="wp-caption-text">Walter Bibikow | Getty Images</p></div>
<p><strong>Industry:</strong> Finance</p>
<p>When you think of finance, you probably think of Wall Street, but you should probably be thinking about the city of Charlotte instead. Boasting almost 300,000 people between the ages of 18 to 34, it&#8217;s the second largest banking center in the United States and the perfect place for millennials looking to rise the financial ranks.</p>
<p>Check out the full list <a class="inline_asset" title="https://growella.com/working/top-ranked-cities-for-millennials/" href="https://growella.com/working/top-ranked-cities-for-millennials/" target="_self">here</a>.</p>
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