Africa has the potential to be the biggest consumer market in the world in a few years' time, the author believes. Photo: Jakob Polacsek/World Economic Forum
Africa has the potential to be the biggest consumer market in the world in a few years' time, the author believes. Photo: Jakob Polacsek/World Economic Forum

WEF on Africa: Higher purpose to investing in Africa

By Elsie Kanza Time of article published Sep 4, 2019

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CAPE TOWN – Travelling frequently within Africa, but also outside, gives me plenty of time to think about our region within a wider global context.

You may consider, given the headlines, that my outlook for the region might be negative. That couldn’t be further from the truth.

There is no discussing that across Africa much more needs to be done to create enough jobs for its growing population.

There is rightly unanimity, too, on the need to improve governance, strengthen institutions and clamp down on the corruption that has so severely hampered Africa’s growth story in the past.

With absolutely no intention of down-playing the scale of the task at hand, it is nevertheless worth pointing that these challenges - which are by no means unique to our region - seem to have been priced-in by the growing numbers of governments, businesses and investors that are increasing their exposure to Africa, bringing with them the prospect of vital growth and employment.

I believe that it is important to mention this, because sometimes we Africans do have a tendency to talk ourselves down.

First of all, some facts. Fact number one: this week in Cape Town we will welcome more of our strategic partners - think the largest and best-known international businesses on the planet - than at any other meeting hosting the World Economic Forum (WEF) outside of Davos.

This in spite of the fact that this year we will have held meetings in China, the Middle East, New York, San Francisco and India.

Not only will more of our strategic partners be present in Africa than ever before, businesses will also be sending more senior people: 40percent of all business leaders are either chief executives or chairpersons, a 25percent increase on 2016.

Fact number two: foreign direct investment into sub-Saharan Africa grew for a third year in a row last year in stark contrast to the global figure for foreign direct investment, which registered its third year of decline.

One of the reasons behind this is undoubtedly the emergence we are starting to see of concerted - if not yet unstoppable - regional integration.

Fact number three: venture funding for African start-ups more than doubled between 2017 and this year. Not so many years ago M-Pesa, the brilliant mobile payment service, used to stand out on its own as a paragon of indigenous African innovation. Today Africa has its own unicorn, Jumia, but more importantly the beginnings of a vibrant eco-system of start-up enterprises and a growing reputation not only for competitive but world-leading businesses in key markets such as fintech and drone services.

Chief executives and investors I talk to on a regular basis are interested in Africa as they see it as a region brimming with potential. Not what’s on the ground, but the people that live in it. A market that in a few years’ time and with the help of the African Continental Free Trade Area will be the biggest consumer market in the world.

An internal market the size of Africa can provide the scale for lift-off that helped propel the Chinese economy when it famously opened up 40 years ago and so it is crucial that further reforms are enacted to help this process finally get under way: finishing infrastructure projects, facilitating the removal of non-tariff barriers and getting on with visa-free travel are all going to be crucial for helping Africa work its way up the value chain.

Does this mean that Africa’s leaders must stay the course? Absolutely not. Now, more than ever there is a need for strong, responsible leadership.

Now, more than ever governments and businesses must work together to provide skills for the new jobs that will power the Fourth Industrial Revolution and to re-skill those whose jobs are at risk. Now, more than ever the region needs to unlock new avenues for growth, such as those powering the green economy, to compensate for declines in traditional areas of employment.

Now, more than ever, efforts must be made to provide quality education, and economic policies that give everyone a chance to succeed and prosper rather than the few winners thrown up by today’s economy.

Now, more than ever, the region needs to work together to provide stability in our increasingly multi-polar world.

Now, more than ever, leaders need to find creative, be innovative, solutions to help the victims of humanitarian crises that are so often forgotten on the fringes of society.

The purpose of the WEF on Africa is to bring together the leaders that can make this happen, not only government leaders or chief executives but those from civil society, leaders representing labour unions, faith groups, NGOs and international organisations.

These leaders’ task this week is not to make investment deals, it is a much higher purpose than that: to create conditions for a fairer, more prosperous and more equal Africa. An Africa everyone would want to invest in.

Elsie Kanza is the head of Africa at the World Economic Forum.


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