Tuesday, 14 March 2017

A tale of three economies in Africa


One of many comparisons between countries is the size of their economies. In the recent past, a number of people noted that Nigeria had overtaken South Africa as the largest economy on the African continent. Subsequently, articles were written about South Africa being pushed into third place by Egypt, only to regain the silver medal position shortly thereafter.
We live in a relative world, in which comparisons are ever-present. Which car is faster? Who can jump higher or further? Which shop is cheaper? Who is the better dancer or bowler or painter? Many comparisons can be put to the test using a stopwatch or measuring tape or simple counting. Others are a matter of judgement.
So how accurate are comparisons of economic size? We must ensure that we are comparing similar measurements of the economy. This means that all countries being compared must follow the same accounting conventions and standards. When measuring the economy, these estimates should be guided by the System of National Accounts. Many countries follow the 1993 version of the framework (regrettably a number of countries still follow the 1968 version of the SNA), whereas some have implemented the latest 2008 set of recommendations. The move from 93SNA to 08SNA often requires substantial revisions, as new definitions and concepts are included in the measurement of the economy. In the South African case, it is estimated that the move between accounting systems added 1,2% to the size of the economy.
Price, quantity and value
Once we are sure that we are using the same accounting method and we trust that the quality of the data is good, we need to be careful that we compare the correct values. The size of the economy is calculated through estimates of gross domestic product (GDP). Since GDP represents the value (V) of all goods and services produced in a country during a specific period, it is a function of the quantity (Q) of goods and services as well as the price (P) of goods and services. Typically economists go to great lengths to remove the impact of changes in P from the GDP estimates, thereby expressing them in ‘real’ or ‘volume’ terms. This makes it possible to calculate economic growth rates based on changes in Q. For example, suppose a firm produces 100 shirts (Q) and sells them for R150 each (P). V = PQ = (100)(R150) = R15 000. If Q increases to 110 and P increases to R180, V = (110)(R180) = R19 800. The percentage change in V is 32%. But if we’re interested in the change in V in real terms (no price effect), the new V is (110)(R150) = R16 500. Now the percentage change in V is 10%, which is identical to the percentage change in Q.
Converting GDP from SA rands to US dollars
For the purpose of comparing the size of GDP between countries, we need to take a different approach. In the equation V = PQ each country expresses the price of the goods and services in its own currency. But this makes comparisons between countries futile. We need to express the value in comparable terms, which requires that in V = PQ, P must be the same unit of measurement. This is often done by converting each country’s local currency P to a United States dollar (US$) P, using the prevailing exchange rate. Figure 1 shows how this can be calculated for South Africa by using the R/$ exchange rate to express nominal GDP in US$ terms.
Figure 1
figure1_econ

Figure 2
figure2_econ

In 1990 South Africa’s GDP was estimated at R290 billion, and with an exchange rate of R2,59/$, the economy was worth $112 billion. In 2002 the exchange rate depreciated significantly to R10,52/$, so GDP of R1 217 billion became $115 billion. And for 2015, a R4 014 billion economy translates to a $315 billion economy.
The picture becomes more clear if we index the values to 1990 = 100 as shown in Figure 2. Nominal GDP grows from the base of 100 in 1990 to 420 in 2002 and 1 385 in 2015. But in US$ values, the index grows to only 103 and 281 in the corresponding years. This is because the indexed exchange rate moved to 406 (2002) and 493 (2015). The choice of currency, therefore, tells a different story about the behaviour of the economy. In some instances, the R/$ changes, but nothing has really changed that much in the actual economy. We can use the period 2002 – 2003 to illustrate this. In nominal rand terms, the economy expanded by 9%, which is an increase that mirrors what would anecdotally be expected. But in US$ terms, it expanded by 52%! This is purely because of the huge recovery in the exchange rate rather than any significant economic growth in the actual economy.
Purchasing power parity
Noting the pitfalls in describing the economy in a currency other than that of the country in question, the problem can be magnified when using a common currency to make cross-country comparisons. Extreme care must be taken to understand the behaviour of an economy measured in a foreign currency. A further shortcoming of the common currency approach, using actual exchange rates, is that comparisons of GDP fail to take price differences into account, i.e. if there are large price differences between countries (measured in the same currency), purchasing power differences are not considered. Consequently, an alternative way to compare GDPs is to use purchasing power parity exchange rates.
The World Bank provides the following definition: ‘Purchasing power parities (PPPs) are the rates of currency conversion that equalize the purchasing power of different currencies by eliminating the differences in price levels between countries. In their simplest form, PPPs are simply price relatives that show the ratio of the prices in national currencies of the same good or service in different countries. PPPs are also calculated for product groups and for each of the various levels of aggregation up to and including GDP.’ 1
For example, suppose an item costs R630 in South Africa and $90 in the United States. If the actual exchange rate is R9/$, a South African would need R810 to purchase the item in the United States (the South African’s purchasing power has declined). For the South African to purchase the same item in the United States for R630, the exchange rate would have to be R7/$ – and this is known as the purchasing power parity (PPP) exchange rate. Measured at the actual exchange rate of R9/$, the value of the item in South Africa would be $70 (630/9). Measured at the PPP exchange rate of R7/$, the value of the item in South Africa would be $90 (630/7). In this case, where it is expensive for South Africans to go shopping in the United States, use of the actual exchange rate undervalues the item (in US dollars) in South Africa, which is where South Africans usually shop. Of course, the calculation of PPP exchange rates is vastly more complex than this simple example, since there are so many goods and services to consider.
The World Bank calculates PPPs for each country in terms of the US dollar. For example, in 2015 the PPP R/$ exchange rate was 5,53 (whereas the actual R/$ rate was 12,75). The PPP$ is linked to the US$ for practical purposes and is based on extensive projects that are commissioned periodically. The latest of these international comparison projects (ICPs) were done in 2005 and 2011. These projects rely on participating countries to provide detailed data on the expenditure on GDP by the various components on different goods and services as well as detailed prices for a common basket of goods and services. In many cases, countries had to specially collect prices for goods and services that would not ordinarily be included in their consumer price index basket. By combining detailed expenditure weights with corresponding prices, it is possible to derive estimates of PPP$s for each country. Using PPP$s allows for the comparison of economies with the advantage of a common “P” but without the pitfalls of volatile exchange rate fluctuations.
Country comparisons using the US dollar
In Figure 3 the changes in size over time of the economies of South Africa, Nigeria and Egypt are shown using a direct conversion from the local currency into US$ at the prevailing market rate.
Figure 3
figure3_econ

In 1990, the US$ equivalents of the economies were as follows: Nigeria $31 billion, Egypt $43 billion, and South Africa $112 billion. The graph shows how the Egyptian economy grew strongly in the 1990s, while South Africa declined in the latter half of the decade. The Nigerian economy expanded from $32 billion in 1998 to $208 billion in the next 10 years. In 2009, Nigeria had a dip of 19% (global economic crisis), but the following year saw a sharp upward spike of 118%. On this measure of GDP, Egypt had positive growth every year from 2005, while South Africa had positive growth most years between 2003 and 2011, but negative growth thereafter.
But how much of this growth was due to exchange rate changes rather than changes in the actual economy?
Country comparisons using purchasing power parity
In Figure 4 the nominal size of the three economies are expressed in PPP$. In 1990, South Africa had the largest economy (PPP$236 billion), followed by Egypt (PPP$219 billion) and Nigeria (PPP$187 billion). In 1992, Egypt became larger than South Africa and this ranking held until 2004 when Nigeria moved into second place. In 2011, Nigeria overtook Egypt in the rankings as the largest economy of the three countries.
Figure 4
figure4_econ

The stories in Figures 3 and 4 are vastly different. Figure 4 is more accurate, as it uses a conversion to a common currency that is based on actual prices and expenditure information in the countries, rather than market exchange rates that can be volatile and influenced by many factors. The movements in the PPP$ graph are consequently also more gradual, which is just as expected.
Data revisions and quality
Unfortunately, it is never quite as simple as this. As part of international best practice, countries will periodically make revisions to their official statistics. There are various reasons for revisions, but two main reasons dominate. First, new data become available that provide more accurate estimates of economic behaviour. This could include periodic population censuses, household expenditure surveys, comprehensive surveys of businesses, as well as new surveys designed to measure economic phenomena that were not previously recorded. Second, revisions are done when methodological changes are introduced, e.g. moving from 93SNA to 08SNA or a change in the use of a classification standard.
Table 1 compares the US$ size of the three economies based on official data that were submitted as part of the 2011 ICP round with the latest estimates as used above (i.e. Figure 3). Given that the actual market exchange rates cannot be revised, any revision is due to revisions in the estimates of the economy by the country. The well-documented upward revision of the size of the Nigerian economy is clearly evident in the statistics.
Revisions should be explained in a transparent manner to the user community, and they should not be unexpected. Communication and transparency are key to building trust in official statistics.
Table 1: Size of economy (US$ billion) in 2011
Country
2011 ICP estimate
Latest estimate for 2011
(as shown in Fig. 3)
Percentage revision
Egypt
229
236
3
Nigeria
247
412
67
South Africa
401
416
4
Although countries may follow the same version of the SNA, the quality of their estimates of national accounts could be different. Some may not include all aspects of economic activity, or may not have access to regular statistical surveys that underpin reliable measures of the economy. These differences in scope and coverage in national accounts are complex and can be difficult and expensive to quantify. Using the same unit of measure goes a long way towards making comparisons easier, but care should be exercised as to what this common measure is.

Reference:
1. http://www.statssa.gov.za/?p=9583 

Monday, 23 May 2016

Introduction to Swagefast



Swagefast?




Introduction to Swagefast

Swagefast is a leading supplier of complete fastening systems, including a range of standard and industrial fasteners, bearings, belting, Swagelok® products, Swagebolt pins and collars, installation equipment and spares as well as specialised fasteners designed to customer specifications.

Leveraging our experience and expertise in various sectors, we are able to match the best solutions for our clients’ needs.  Our knowledgeable team is dedicated to customer-oriented innovation, and is committed to driving maximum efficiency and productivity through tried-and-tested, easy-to-use products and solutions that offer unmatched quality and reliability for a wide range of applications.

Swagefast first entered the South African market in 1994.  Since then, we have built up our reputation on delivering quick response and reliable service which is backed by value-added after-sales support.  Our philosophy for building up lasting partnerships with our clients, along with our hands-on approach, remains the cornerstone of our success and ensures that you get the best advice and service from the specialists in fasteners and fastening technology.





Our Fasteners



Swagefast manufactures a complete range of Swagebolts and Collars ranging up to 28mm in diameter. The stan-dard grip range manufactured ranges from 6mm-90mm, with head markings that makes identifying the correct pin length to be used easy for the installation process.



The Swagebolts are available with three head types namely “Brazier” or  Button which is commonly known as a “Round Head”, the “Countersunk” or “Flat Head” and the “Truss Head” which is a Button Head with a lowered profile.



Swagefast also specialize in standard fasteners made from mild or high tensile steel, as well as stainless steel fasteners that are used where corrosive fluids are in play.






Our Installation Equipment

Swagefast manufactures Swagepac power units as well as the complete range of Installation Tool that is used for the installation of Swagebolts.  Swagepac’s are available in 220V/380V or 525V  derivatives which are commonly used.

Installation Tooling are manufactured “in house” and are available for all sizes of Swagebolts.  We also manufacture CQ-Close Quartered Installation Tools to be used where limited space is available and standard Installation Tools are unable to operate due to space restrictions.

Swagefast not only manufacture and supply the Installation Equipment, we also have Rental Installation Equipment available for your convenience.  Our well trained staff can service and maintain your Installation Tooling investment.




Friday, 26 June 2015

Consumer video mobile habits


Consumers' Mobile Video Viewing Habits [Infographic]


More than one-third (36%) of smartphone video viewers say they watch long-form video (five minutes or longer) daily or more frequently, according to a recent report from the Interactive Advertising Bureau and On Device Research.
The report was based on data from a survey of 4,800 consumers in 24 countries who own a smartphone and watch videos on it.
Some 58% of respondents say they watch short videos (under 5 minutes) daily or more frequently.
Other key findings from the report include:
  • 35% of respondents report watching more video on their smartphone compared with last year; this percentage is even higher in the US (50%), Canada (42%), New Zealand (42%), South Africa (42%), and the UK (40%).
  • 53% of respondents say they often or sometimes watch mobile video while watching TV.
  • 48% of respondents only or mostly use mobile apps to watch video on their smartphone.
  • 68% of respondents share the videos they watch on their smartphones; 42% say social media is a way they often find the videos they watch on their smartphone.
Check out the infographic below for more insights:



Facebook's evolving video strategy


Four Reasons to Take Advantage of Facebook's Evolving Video Strategy



Facebook is investing heavily in its video service, working hard to grow its video reach and ad efficacy. And it's making inroads.
In August, Facebook achieved a billion more desktop video views than YouTube, according to comScore, and now serves up more than 3 billion video views every day.
Such a strong upswing of video views on Facebook can be attributed to a few things. First and most obviously is auto play. Facebook video auto plays in the newsfeed, driving video views and interaction. Second, more people are watching videos as they can now play easily on smartphones. A full 65% of views happen on mobile devices! And, lastly, the Facebook algorithm serves content that people interact with. So, the more videos people watch, the more videos the algorithm serves, creating a cycle of video views.
Moreover, Facebook's Mark Zuckerberg noted about the future of Facebook, "One of the big trends will be the growth of video content on our service."
That quote is not lip service. Video helps keep people on Facebook, which in turn drives ad revenue. Facebook doubled down on this bet at the F8 Developer Conference, launching an embedded video player that allows users to embed Facebook-hosted videos anywhere.


Here are four reasons marketers need to begin or expand native Facebook video marketing and two things they should know as they dive in.

1. Third-party video link posts underperform
Though Facebook still allows marketers to post a link to a video on YouTube, Vimeo, or an organization's website, there is no reason to do this as it will appear as a static thumbnail rather than a Facebook auto play video.
In some cases, Facebook may not even show the visual thumbnail. The link will be there along with text, but the static image won't show.
For video to perform, it really needs to be hosted by Facebook. The reasons why Facebook is moving in this direction—and why it's going out of its way to reward video posters—should be obvious...
Greater traffic, engagement, and time on its site mean more ad revenue for Facebook.

2. Native video is rewarded
Facebook has updated its algorithm to reward video, increase its relevancy, and cater to the dramatic rise in viewership. Here's how Facebook explained this change on the Facebook blog:
"The improvement we are making today considers whether someone has watched a video and for how long they watched it. We're adding that to the factors we considered previously, which included likes, comments and shares. This change will affect all videos uploaded directly [natively] to Facebook."
Proving that the algorithm change is working, videos now get roughly 10% more promotion than images. And even though the number of photos still dwarfs videos, video gets much more pull.

3. Native video boosts organic reach
Videos show a 135% increase in organic reach versus image posts—and an astounding 148% increase among fans, according to Social Bakers. Organizations needn't look further than the news feed to understand why: It's a more natural way to share videos with friends, and auto play makes it easy to engage and interact with videos.
Helping to drive this phenomenon is that Facebook video is highly shareable (both on desktop and mobile) helping it outperform YouTube.
This chart from SocialBakers highlights just how engaging Facebook video is...


Clearly, companies that choose to post native video are cashing in on the dynamic market change, boosting organic reach that had been declining for many.
Though this boost may not last forever, Facebook video is on the rise. In fact, the number of native Facebook videos is trending to overtake YouTube by the end of this year.

4. The algorithm also likes video view ads
Facebook offer two ways to promote a video.
First, by boosting a video post or second, through a dedicated video views ad. Today, 27% of all videos are promoted. Though 17% of photos are promoted, there is a very large volume of photos, which means that promoted video is still far more effective at reaching audiences.
Additionally, Nielsen has found that the longer users watch, the more value a video ad has.
"Results show that from the moment a video ad was viewed (even before one second), lift happened across ad recall, brand awareness, and purchase consideration," Nielsen notes. "And, as expected, lift increased the longer people watch the ad."
And for users who watch the video to finish, Facebook video ads offer a call-to-action on the last screen of the video. This is a great place for advertisers to insert action—whether that be watching a longer video on an organization's Website to driving email newsletter sign-ups. Regardless of the action, quality video coupled with a strong call-to-action is performing exceptionally well.

Focus on Quality
With all the benefits of Facebook video, note that quality still matters. An engaging photo will still get more reach than a lackluster video. The better the video, the more entertaining, the better the production quality, the more engagement it will get.
Because Facebook users share video that they want associated with their social personas, organizations should ensure that above all else, their video is shareable and has a production level that people would feel comfortable being associated with and sharing.

Feel Free to Experiment
Not every audience is the same, and there isn't a formula for the ideal Facebook video. As such, organizations should conduct A/B testing with content types, length, and calls-to-action.
Get the audience involved and issue a call for user-generated video content to get an idea of what video the audience is drawn to. As other brands experiment with Facebook video, marketers should take time to learn from others' mistakes and successes while watching for best-practices to emerge

content marketing mistakes


These Mistakes Can Make Your Content Marketing an Epic Failure (but You Can Avoid Them)



Many marketers today seem quick to jump on the latest strategy, approach, or technology, attracted by the promise new and amazing results. It's done with great enthusiasm and the best intentions, but often also with a lack of planning and forethought. And when that happens, the enthusiasm and excitement can quickly turn to a feeling of epic failure.
With all the buzz about and allure of content marketing, jumping in quickly and then not seeing the expected results happens a lot. Here are three common content marketing mistakes and some ideas for how to avoid them.

Mistake No. 1: Of course I know my audience. Now let's crank out some content.
I recently had the experience of helping my 10-year-old plan a party she was having with some classmates. It was amazing how clear she was with what she wanted. From the games to the food to goody bags, she was detailed and precise. Anything I suggested that deviated from her vision was shot down immediately, but supported by some sound logic.
I relented and let her run the show based on one simple reason: I was pretty sure she knew her audience a whole lot better than I did.
The first big mistake a lot of companies continue to make: they jump right in and create content too focused on their own brand versus what their audience might really be looking for. They skip the critical first step of figuring out or validating what is truly relevant to the customer.
We should all know by now that if your content doesn't entertain, educate, or solve a problem for your customer, you are probably missing the mark. So even if you have a really great brand story, don't make it about you. Make it about your customer.
The good news is there are lots of quick and easy ways to learn more about what your customers might really be looking for before you start cranking out the content.

Do some keyword research. Look at the keywords that are used most to search and find whatever it is you sell. You may find terms that you do not immediately associate with your brand, but your customer and prospects do. If so, figure out how to align your solutions with those terms, and then work them into your content to create greater relevance.
Also look at your website's referring website traffic. It will tell you what visitors are looking at before they are looking at you. That can be a great source of information to help position your content or identify the digital channels your customer and prospects frequent.
Turn to your own sales and customer service teams, which are too often overlooked as sources of information. What are they hearing on the front lines? Maybe there are some common requests or needs being raised that you were not aware of. Use that information to create fresh content. Recent customer feedback is great source to help you keep things relevant and up to date.

Mistake No. 2: Absolutely, we speak with a consistent brand voice. Now let's blast out more content.
Your brand voice, and the personality you inject into, it is really important. It can be one of the most powerful ways to distinguish your brand and set it apart from others.
Brand voice is one of the staples of good marketing, but it is especially important when you introduce new content and through multiple tactics and channels.
Some variance in tone and language might be appropriate to address different audiences, but generally speaking your brand voice should be consistent and clear across all the channels you use.
Recently, a company was announcing the addition of a great new feature to its flagship product. On the corporate website, the announcement was formal and businesslike. The same announcement on one of the company's social media sites was significantly less formal and even used slang terms. The dramatic different in tone and approach could easily create an unwanted variation in the perception of the brand.

To avoid inconsistencies, create a style guide that clearly presents your brand voice and story line. It should define the focus, tone, language, and visuals to be used. Everyone creating content should adhere to that common set of guidelines—including Marketing, PR, HR, Corporate Communications, and any other group. You can also perform a periodic content audit, which is a great process for identifying where and when inconsistencies may occur. An audit can be done by collecting a broad sample of posted content for review. It can also be incorporated into an approval process for looking at content before it goes live.

Mistake No. 3: Crank out our content on blogs and social media. They're all that matter.
All too often companies seem to associate content marketing with blogs and social media, and not much more. But there are so many more options. Selecting the best options ties back to understanding your audience.
One organization implemented a B2B lead generation program, creating some pretty compelling content but not getting results. After looking deeper, it realized its mistake: It was distributing its content through social media sites that its prospects did not frequent. The organization instead integrated the very same content into a high-traffic section of its website, and also placed links on an industry association website where its prospects visited. Results improved exponentially.
It seems obvious, but the driving force behind your content tactics and channels of distribution should be how and where your prospects and customers consume information. If that's on a website where a blog can reside or through specific social media, that's great, but don't discount content tactics such as e-newsletters, e-magazines, articles, microsites, infographics, and video, just to name a few.
The good thing, especially in the digital space, is that you can test tactics and adjust or switch them quickly.