Africa: “A Better Story, Better Told”

There was a new #maturity in the predictions for #Africa at the recent EY Strategic Growth Forum in Johannesburg. Where in previous years participants and commentators pivoted between euphoria and depression, there was a great deal of balanced discussion about how to best accelerate progress. This even after what most expect will be the worst year for economic growth in the past five. 

As our most recent Africa #attractiveness #survey – AFRICA 2015: Making Choices – shows, investor sentiment towards Africa has dipped and foreign direct investment is headed down for the second straight year.

So the core message of the EY forum – which gathered 400 senior executives and board members from both African and international companies of all sizes, as well as senior-level government officials – was “a better story, better told.”

And there is indeed a powerful story to be told.

The fact is: Africa is on the rise and soon may very well enter an auspicious new era in its economic development. Despite a faltering global recovery, geopolitical tensions, a nascent skilled-labor force and lower commodity prices that resulted in a bumpy road over the last two years, the sub-Saharan African economy has more than quadrupled since 2000.

While other regions suffered deeply from recession and joblessness during the global financial crisis, African economies remained resilient – even in the face of negative stereotypes about them and their progress. In 2014, for example, Africa’s share of #global #capital investment and #job creation hit an all-time high.

Against the background of the UN’s new Sustainable Development Goals that build on the 2000 Millennium Development Goals, several important themes emerged at the Forum for helping Africa to move forward. 

Accelerating Regional Partnerships 

There must be great urgency to drive regional partnership across sub-Saharan Africa. Today, moving goods and people across borders remains extremely frustrating for local and #international #businesses. 

The proposed Tripartite Free Trade Area would create an integrated market of 26 African nations with a total population of 600 million (behind only China and India), a total GDP of over US$1 trillion and a long term GDP growth rate in excess of 5%. There was a sense at the Forum by some that this process will take time and people need to be patient. In contrast others felt that there was more informal collaboration than ever before which would contribute towards achieving more formal agreements. In any case, there was an understanding by most that this is crucial to progress and will need to be pursued with some #urgency. 

A key to effectively connecting and integrating markets across the continent is an improved infrastructure – both to physically link the markets and generate enough electricity to help develop manufacturing and other industrial sectors. Again, moving with urgency has to be a priority – with taking infrastructure projects swiftly from the concept stage to a phase of “bankability” still the biggest roadblock. 

Technology - Critical to Africa’s Future 

As important as #infrastructure development is to Africa, #digital technology and related sectors may prove even more critical to its #future. 

Advancements in technology will help change everything for Africans – from education and employment to entrepreneurship, effective government and more. 

Reinforcing this progress in Africa are two trends – rising #urbanization and a growing middle class – increasingly facilitated by technology, telecommunications and media (the “TMT” industries) and financial services. Last year, nearly one-fifth of investment projects in Africa were in TMT. Already, there are more than 90 technology hubs across the region, many offering incubators and accelerators for #entrepreneurs. 

The fact is technology-fueled globalization is already disrupting African economies. It’s more important than ever that national governments and international development agencies understand this and move quickly to become part of the solution. Simply put, instead of just helping African economies catch up in traditional industries in the usual ways, their focus needs to be on preparing Africans for the global future. 

Africa’s Success Depends on Women 

With the growth of African economies quickening, the struggle for much needed talent continues to intensify across all businesses. And women in Africa are a sadly underutilized resource. 

Of course, this is nothing new in Africa and many other regions around the world. That’s why the UN’s Sustainable Development Goals call for ensuring “women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life”. 

Among its economic objectives are reforms “to give women equal rights to economic resources, as well as access to ownership and control over land and other forms of property, financial services, inheritance and natural resources [and] to enhance the use of enabling technology, in particular information and communications technology, to promote the empowerment of women.” 

That said, there has been some progress. Especially when it comes to entrepreneurship – a key driver of sub-Saharan economic growth – women are increasingly becoming key players through indigenous African firms like the Kenya Women's Finance Trust. This was also evident at the Strategic Growth Forum with a number of women entrepreneurs showcasing their growing businesses. 

And, beyond business, more women need to enter the political arena – bringing all the talent available to bear on meeting their nation’s challenges and grasping their opportunities. (For more on women in politics, see the Women in Parliaments Global Forum’s 2015 Report: “The Female Political Career.”) 

Governments and business working together

However, there was one key theme seen as essential to accelerating economic growth in Africa – the need for Governments to engage more effectively with business. There is an urgent need to act on the recognition that neither business nor Government can succeed in isolation – what is needed are forums for discussion that result in active collaboration. Governments would be well advised to intensify the dialogue with business leaders and entrepreneurs to enable the whole economic and social ecosystem to come to live and thrive. Not only is the current pace of this dialogue too disconnected but there also seems too little urgency among African Governments and international development agencies to act. 

Why does this matter so much? 

Africa is experiencing a transformative moment. With a burgeoning population of new, middle-class consumers, new markets and rising entrepreneurialism, the continent is poised to reap the benefits of its “demographic dividend” and achieve economic prosperity unfathomable even a few decades ago. And, as we have seen in Asia over the last few decades, this prosperity has the potential to bring greater independence for the region’s nations and their citizens. 

But to achieve it, Africa and the international community must not let recent economic uncertainty color our judgment. Instead we must foster collaboration and employ new, innovative approaches and processes to re-accelerate economic growth. Africa and the world have waited long enough.

Uschi Schreiber

@uschischreiber 

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.