The International Global Development Forum event, titled “African Business in the World-Class Space,” took place in Washington DC last month. Senior executives met to discuss the challenges and opportunities African companies face in reaching the world-class space.
Here are the major issues discussed for Africa’s businesses to grow into a world-class space.
Africa is a land of great opportunities but it is surprising that private investors are reluctant to invest in Africa. Africa is growing at a faster pace and the governments of various African countries should take advantage of this by setting up laws that are business friendly in order to encourage foreign investors. Mali, for example, implemented a business development plan “tax break” in order to attract investors. In the last 15 years, both the private and energy sector have been largely responsible for development across Africa and more Africans in diaspora are coming back to re-invest in the continent.
Private equity and African businesses were encouraged to explore business platforms which are a simplified approach to investment. Private sector business owners have a huge role to play in order to allow businesses in Africa get recognition in the world-class space.
Regulations and unstable commodity prices have been identified as the bane of investment in African markets. Private equity was identified as the solution to Africa’s problems in reaching the world-class space. African businesses need to come together with private equity investors in order to explore this opportunity properly.
“There’s money in African markets but it’s not the right kind of money. We need the local money that knows the market,” said Thomas L. Ferré, Private Equity Manager of MicroVes.
Social services and businesses
In Africa, while businesses focus on making profits, they should also contribute positively to the countries by providing skills development training programs, build infrastructure such as schools, clinics, etc. and also evaluating environmental impact before starting up their businesses. Companies should be able to harness the power of the private sector to make an impact on the economy.
Economic development and technological innovation are inseparable. Technology plays a dominant role in businesses and African countries were encouraged to incorporate innovation into their company-culture. Innovation should be encouraged by the government and laws of the land. After the 1990s, Rwanda’s investment in technology contributed to its economic growth and also helped to create a conducive business environment for investors in the country. Visa’s presence in Rwanda has continued to benefit from this.
While countries like Nigeria and South Africa are recognised across the world as economic giants, Kenya’s focus on technology has set her on a better path for foreign investors. Lagos and Nairobi have been sighted as major cities embracing technological innovation.
African countries should improve transport facilities in order to foster business growth. Lack of regional integration remains a problem for the movement of goods and services within the African continent.
Speaking at the conference Abdu Mukhtar, Chief Strategist for Dangote Group, the largest industrial conglomerate in West Africa, said his company routinely faces transportation and logistics problems in transporting goods by road throughout Africa. The Dangote Group is addressing transportation challenges by importing their own vehicles and reaching out to governments on improving infrastructure and regulations to ease the flow of travel between countries.”
Despite being landlocked, Rwanda uses the methods provided by technology to access other countries and boost its economy. In essence, other African countries should be able to learn from countries like Rwanda and Kenya in order to compete in the world-class business space.
All means of transportation should be upgraded and all challenges should be fixed including the airports, as advised by Solomon Asamoah, African Development Bank’s Vice President of Infrastructure, Private Sector and Regional Integration
Negative Narratives about Africa
Corruption has commonly been associated with Africans and has scared investors away from the continent, though this is not a substantial reason to not invest in one of the fastest growing economies of the world. The media and aid organisations have allegedly portrayed negative narratives about the continent and most foreign investors still harbour these thoughts.
Corruption happens in darkness, shining a light on it can help end the problem,” said Solomon Asamoah.
In order to compete in the world-class space, business leaders needs to be fully engaged and African businesses also need to develop new marketing strategies for their products so as to to debunk the negative narratives of the continent, said Rahel Getachew, an international marketing expert.