What does it mean to do business in Africa? Surely 'doing business' is 'doing business' whether in Africa, South America, the Middle East...? WRONG!
Survival of the fittest is part of human nature and striving for success (and riches) seems to be on everyone's agenda in the business world. Our capitalistic-shaped world strongly encourages fierce competition and earning maximum profits is certainly what puts one at the top the league table as a business. Where does this leave Africa on the world map?
The history of the continent is complex enough and bunching it as a country clouds clear strategies for outsiders wanting to invest in one or more African countries. In many ways, the continent has lagged behind however over the last few decades, we can see clear signs of several countries asserting themselves and proving that possibilities are infinite especially where resources are abundant.
The Cambridge Africa Business Network (CABN at the Judge Business School) hosted its first conference that focused on why and how to invest in Africa - "Unlocking Value in Frontier Africa". For a conference of its kind (and first one for that matter), there was a remarkable quality of guests and the allocation of time for discussions by the members of the public was well planned.
The opening keynote by former Olusegun Obasanjo (President of the Federal Republic of Nigeria) set the tone for the conference and Lanre Akinola made us all feel at ease when interviewing His Excellency.
|Olusegun Obansanjo and Lanre Akinola|
The trends in foreign direct investments (FDI) differ depending on the country and sector, nevertheless it is true to say that the level of investments has risen over the last few decades. Obasanjo is of the view that the reason rewards have not been reaped to the maximum is not because of the lack of investment but rather the lack of adequate institutions. In fact he was adamant that the short sightedness of looking solely at inviting when spending money is detrimental if the area of institutional reform is ignored. As a result, a large number of the population does not benefit from these very investments. He spoke about a clear system that needs to be established in order for re-investment to follow profits have been gained. He presented his own country when giving examples of how lack of focused investment, lack of maintenance and inappropriate or lack of revenue allocation are key to why Nigeria's energy market (electricity to be precise) is stagnant. Obansanjo also elaborated on the question of why countries rich in endowments such as the DRC lag behind; he stressed that there is no reason why the largest country in Africa (in terms of being the only country in Africa to have two time zones) should have the majority of its population not prospering except that with weak institutions, regulation cannot be enforced and distribution of wealth will be skewed.
Obasanjo's humorous approach was indeed touching and allowed for the audience to engage with his overall positive message:
"We will get there, it's [just] a question of time "
We were also honoured to be in the presence of the Vice President of Zambia, who took centre stage for the closing speech. He made it clear that as a representative of Zambia and from his personal experience, he would only be addressing investments in Zambia. Despite this, a member of the audience asked a question related to Sierra Leone and the beginning of his answer was “I’m not sure where Sierra Leone is”… yet another humorous honorary!
|Dr Guy Scott, Vice President of Zambia|
In between the opening and closing speeches there where of course several distinguished panelists who shared there opinions from their respective fields.
As funny as the guests were, their humour touched on some very crucial points that need serious attention. Joking about the obliviousness of the whereabouts of Sierra Leone did tickle the audience however truly “knowing” about individual countries is somewhat missed out by many businesses – and we wonder why many do not prosper?! “Africa is not all the same” pointed out Dzika Danha, the problem of perceived vs. actual is very much alive. It is up to us to turn negativity into positivity; Jean Paul Melaga stressed that “we are terrible at marketing ourselves and our governments need to do better”.
Responsibility also lies on individuals living on the continent as well as those living outside – Eric-Vincent Guichard turned the attention to the need for the Diaspora to assume it’s role in the running of their individual countries for the good of the continent; he touched on the current problem of lack of expertise that could easily be solved by “brain gain”. “We need capital, not just physical capital but human capital” Jubril Enakele.
|Dizka Danha, Eric-Vincent Guichard, Martyn Schouten, Jean-Paul Melaga, |
Jubril Enakele with Panel Manager Kwaku Osei
With its low levels of debt compared to other continents, Africa is one of the top ranking place in which it is ideal to invest and for this reason it comes as no surprise that everyone is seeking to explore opportunities. The struggle for power has never been a simple nor a straightforward game and the complex relationship between ‘demanding’ China and Africa especially has everyone at the edge of their seats. This not concerns profits but also merges into the pursuit if political power (Alastair Newton); so with so much potential and so conflicting intentions, how should Africa react to this? In order for some kind of sustainability to be included in the equation “doing business should be [done] for the long haul” said Alastair Newton.
|Moderator Prof Jaideep Prabhu with Stephen Murphy, Alastair Newton, |
Dr Marial Awou Yol
China almost always beats most foreign investors with their attractive offers and a lot of distortion occurs on the ground from some investment programmes e.g. railway, infrastructure… (Stephen Murphy) however once again it is up to governments and individuals to make sure they are in a position to “call the shots”.
Good leadership is key to making progress in terms of adequate and appropriate investments, and this is particularly so in the ICT industry. On the third panel, Greg Marchand spoke about a large amount of leadership being ‘mature’ and from a generation that may not necessarily fully grasp the ICT wave and therefore not fully take advantage of the ICT opportunities. Countries in Africa need to be able to distinguish between what it needs rather than taking following what the West is doing (Ken Oyolla).
The issue of solid institutions to enforce policies was revisited in terms of encouraging and protecting innovation. The advancement of the ICT industries not only relies on investments but solid economic success, in other words economic participation needs major focus for investments to consequently be worthwhile (Linet Kwamboka); a point that was picked up and taken further by Dzika Danha - economics drives politics and it is the economics that pushes success.
|Greg Marchand, Ken Oyolla, Linet Kwamboka |
and moderator Wadzanai Madziva
The conference was packed with information from individuals who have worked in various fields and have the knowledge of what Africa really needs given their past and present experience; a great initiative that I hope will continue for years to come.
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