This past week in Davos-Klosters, Switzerland, Business leaders gathered in Davos for the 45th World Economic Forum Annual Meeting. Almost immediately they called for economic structural reforms to foster growth in the global economy. This year seems to be the pinnacles of the WEF with more than 2,500 participants taking part in the annual meeting,

Watching “Quest Means Business” for the last two days, we know for sure that most CEO’s regard Europe as one of the major risks for the world at the moment and for the foreseeable future. The other impact areas of Risk are the Middle-East for obvious reasons and then of course we have China.

Yesterday UBS CEO, Axel Weber iterated that politicians need to address the geo-political issues if growth is to be achieved. In a more pointed context, he told Richard Quest that monetary policy was not enough to encourage growth. “Policy-makers shouldn’t kid themselves,” Axel A. Weber, Chairman of the Board of Directors, UBS, Switzerland, said. “They need to deliver policy reforms, not just loose monetary policy.” Weber went on to list the labour market and pension reform as especially important, citing Germany’s reforms under the Schröder government as an ideal specimen for those lagging European countries to follow.

In this instance, with falling oil prices, sanctions against Russia, war in the Middle East and Europe divided economically in terms of performance, yet all hanging on the Euro, should be making Africa as whole think a bit more about trade and trade partners. More and more CEO’s at the WEF are calling for tax reforms, also the address the increasing inequality gap.

Global CEO’s are also realising that the world is at greater risk with the top 1 percent controlling 90 percent of the world’s wealth. As the saying goes, “The only thing keeping the poor from killing the rich is religion.” Whether this is true or not is not the reality that long ago, the top CEO’s and shareholders needed to implement reforms.

“Right now structural reforms are the only game in town. We need politicians to act,” Min Zhu, Deputy Managing Director, International Monetary Fund (IMF), Washington DC and World Economic Forum Foundation Board Member, said. Zhu added that “worldwide, the whole banking sector is much stronger than a few years ago” but that “the risks have moved into the shadow banking sector.”

This is also a call for Africa to look to her neighbours, such as South Africa who has some of the more successful financial sector instruments and risk levers in place. These for most part are carried into the countries as far as possible where they have expanded to. However, as called for by those present at the WEF, innovation will be needed to bring in revenues from the unbanked in the continent. This is another avenue for new streams of tax revenue. The call must and has been made for global taxing system reforms, especially in the light of tax avoiding, evasion and corruption.

Compounding the risks are the debt levels in the US. Performance hinges on the performance of the Dollar and the realities are extremely sensitive to the risk the US Dollar currently carries. This is critical for the exchange of currencies, especially when it comes to infrastructure development, for which Africa as a whole will demand the most investment to get their economies on par with that of the rest of the developed world.

John Rice, Vice-Chairman, GE, Hong Kong SAR, emphasized the importance of infrastructure to global growth. “You don’t have sustainable, inclusive growth unless you have jobs, and you don’t create jobs unless you have good basic infrastructure,” he said. In this regard now Africa as a continent in planning with the AfDB will need to seek innovative avenues to raise the capital to plug the funding gaps. This will have to be carried out parallel to the efforts by the Progress Panel towards curtailing illicit outflows from the continent.

“During the past three decades roughly 90 percent of sub-Saharan Africa’s leaders have behaved despotically, governed poorly, eliminated their people’s human and civil rights, initiated or exacerbated existing civil conflicts, decelerated per capita economic growth, and proved corrupt.” – The Roots of Africa’s Leadership Deficit

David M. Rubenstein, Co-Founder and Co-Chief Executive Officer, Carlyle Group, USA, said that since governments and banks are no longer funding infrastructure investments as much as they did in the past, more and more infrastructure projects will be funded by private equity. “Right now the US seems the greatest place in the world in which to invest,” he said. However, he cautioned that economic growth there is leaving many behind, especially in middle- and lower-income groups.

With the shortfall in infrastructure funding, there is a halt to the development and progress of land-locked countries and the development of arable land for agriculture. Without adequate or even the very basic needed, these countries will not able to profitably commercialise produce even with their neighbours.

Zhang Xin, Chief Executive Officer and Co-Founder, SOHO China, People’s Republic of China and Young Global Leader Alumnus, noted that China, unlike Europe, is suffering from too much investment and not enough consumption. “How do we grow consumption? We need tax reform,” she said. Although pro-consumption reforms in China are proceeding more slowly than she would like, Xin said that “the anticorruption campaign is working very well.”

Automatically South Africa as part of BRICS should be spearheading the transfer of China’s reforms on corruption programs and ensuring that through the African Union, that Africa sees the light of succeeding against corruption.

To our continent benefit, talent is well on the rise in Sub-Saharan Africa. As companies gear up for growth, the demand for skills needed to anchor such ambitions has increased, and is being driven by greater mobility in the labour market. In order to remain competitive, African companies must there is a rising war for talent in Sub-Saharan Africa. As companies gear up for growth, the demand for skills needed

to support such ambitions has increased, and is being matched by greater mobility in the labour market. In order to remain competitive, companies need to be deliberate in how they plan and respond to these challenges measure how they plan and respond to these challenges.

At the moment the global economy is not growing, it almost like a ‘false flat’ due the exposure to various risks identified, and in doing so Africa must guard against the commercial market that is consolidating to remain competitive.

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