On 26th February, Invest in Africa’s Programme Director William Pollen spoke at the Africa Business Partnership Forum on a panel tackling the 3 key issues impeding business growth in Africa – governance, business models & partnerships.
Ayo Salami, CIO of Duet Africa, kicked off proceedings by reminding the packed auditorium that growing urbanisation on the continent will significantly alter long-term consumption patterns, fuelling growth and helping sustain the story of Africa’s continued development. He cited that in the 1950s, 75% of Africans lived in rural areas but in 2050, it’s estimated that 75% of people will live as part of the urban sprawl.
The question of whether to invest in Africa therefore appears to be a question of risk rather than one of profitability. Political risk in particular is at the forefront of investor minds when confronting Africa. It is worth remembering that, while in 1994 only 7 countries in Africa had regular elections, today, only 7 do not. However, this upward trajectory must be maintained to give investors the confidence that countries in Africa represent a stable market.
Rosalind Kainyah, Founder & Director of Kina Advisory Limited, reinforced this point in stating that good governance is not only vital for attracting foreign investment but equally for supporting the growth of local business.
Gibril Faal of RemitAid picked up this theme, asserting that the African growth story needs to be inclusive, through the creation of ‘decent’ jobs (as defined by international labour organisations) and investment in skills to establish operational excellence in the local talent pool. He also spoke of the need to build a comprehensive culture of SMEs in each African country since they are truly the engines of job creation and growth.
The rest of the world has its part to play too, as William Pollen reminded the gathered audience. He stressed the need for global companies to localise their supply chain: bringing in local staff and local knowledge. Not only is this how to be a responsible investor in Africa but it also happens to be how success is achieved in the region. William mooted that the relationships between international and local companies are like marriages: they are a long-term commitment and you get results when you invest time in getting to know your partner.
On leaving the Africa Business Partnership Forum, this was a message that clearly resonated: as a global company, it is critical that you treat local partners on an equitable level, with respect and fairness. And just as is so often the case in life, you must be prepared to take your time to find the right one.