Conscious efforts at countering and redressing the gloomy pictures painted about doing business in Africa was a major panacea offered by business leaders at the ongoing World Economic Forum on Africa in Kigali Rwanda in order to attract more investors into the Continent.
Led by the Nigeria’s Business mogul, Aliko Dangote, members at a McKinsey Private Breakfast discussion Panel agreed that Africa’s long term growth potentials should be a subject of emphasis to gradually change the wrong perception.
They also agreed that since Africa offers the best returns on investment on any venture, it is indeed the best place to invest in the world.
Other speakers on the Panel, who expressed confidence in the long term giant leap in Africa industrial strive in years to come, while reviewing the McKinsey report titled “Lions on the Move 2.0: The continuing progress of Africa’s economies” are Dominic Barton, CEO Global McKinsey; Ashish Thakkar, Executive Chairman of Mara Sokoni; Makhtar Diop; Vice-President for Africa, the World Bank and Carlos Lopez: General Executive-Secretary, Economic Commission for Africa (ECA).
The executive summary of the report indicated that “Africa growth story is still positive and business opportunity is large and shifting, over 4trn across B2B and B2C
“The Continent’s biggest 700 companies are mostly local and highly profitable, but too few and too small. “ 6+1 Imperatives to Governments to sustain and accelerate the momentum.”
Dangote emphasized there are positive events and stories on Africa but “we have to get rid of perception risk. The fragility of perception drives away investors. We need to change the mind set because good things are happening in Africa. “Sometimes the old and existing investors paint a gloomy picture of doing business in Africa to avoid competition and scare away potential investors. You have to act big and bold.”
The frontline businessman disclosed that the Cement segment of his Group’s businesses has invested over $4 billion in the continent and that the returns are quite good. “We are bullish about investing in Nigeria, devaluation or no devaluation”
In response to how African entrepreneurs can have wider access to finance, Dangote advised that there should be a robust policy that encourages bank especially locally owned ones to finance local entrepreneurs.
He pointed out that 90 per cent of Nigerian banks are owned locally and that perhaps correlates with why Nigeria has the highest number of entrepreneurs in Africa.
However, one of the biggest challenges to investing in Africa, according to the richest man in Africa, is lack of credible data to work on
While encouraging that African should stand up and tell their stories, he expressed optimism that his group, in the next five years, will be the first African company to feature on Fortune 500 list of companies.
In his comment, Dominic Barton, CEO Global McKinsey, spoke about the fact that Africa could boast of young population and good talent poll which would aid her industrial efforts.
While calling for a collaboration between the private sector and government to enhance the capacity building of the young population, build efficient tax system. He also posited that the democratic dividends occasioned by the stable governance should be harnessed to strengthen quality education for the young population.
Also, Ashish Thakkar, Executive Chairman of Mara Sokoni harped on the development of e-commerce as the emerging market and that young entrepreneurs should be inspired and mentored to keep on track
The McKinsey report expressed the believe in Africa’s long-term growth prospects which it described as being very strong but powered by four factors. It gave the factors as the working age population which will be world’s largest by 2034 at 1.1bn with stable jobs now growing faster than the labour force.
The second factor, the report indicated is that Africa has continued to urbanize rapidly: “Another ~190 million moving to urban regions by 2025 and Urban areas have 2.5x higher productivity than rural areas”
The third propeller factor is the “Technology creating opportunities to leapfrog in key sectors e.g. Financial services, Education and Retail/Wholesale”
The last factor for long term growth in Africa is the level of Infrastructure investment, which the report claimed had risen to 30% over last five years. The Infrastructure investment stood at $80bn in 2015, or 3.6% of GDP, up from 3.2% in 2010.
The World Economic Forum on Africa, currently on-going in Rwanda is focusing on Connecting Africa’s Digital Transformation. Convening under the theme, “Connecting Africa’s Resources through Digital Transformation,” the discussion in Kigali is coming after the Forum’s Annual Meeting in Davos-Klosters in January.
The Forum is seeking to identify priorities and actions for Africa’s leaders as they look to build economies resilient to today’s challenges and able to flourish in the increasingly digital, convergent marketplaces of tomorrow.
Participating in the discussions in Kigali are over 1,200 leaders from government, business, civil society, academia, media and the arts.
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