Over the last year Africa has grappled with various crises, including an Ebola outbreak in West Africa which claimed more than 10,000 lives, dozens of terror attacks, and more recently protests in Burundi and xenophobic attacks in South Africa.
These have received wide coverage internationally, reinforcing the image of insecurity and poor governance, which has plagued the continent for decades. Jeff Aludo, the East Africa managing director at Africapractice, an advisory services and strategic communications company, says these events could “reverse a lot of the gains” Africa has made in recent years.
“Terrorism is now a big part of the negative story,” says Aludo. “CEOs want to take care of their people, and that has gone beyond just making sure they have the right talent and they treat employees right. It is also making sure employees feel secure where they work.
“I have heard CEOs grapple with whether they should expand to country A, and then worry about whom in their talent pool would even want to go there.”
Some African countries have lately experienced increased levels of terrorist activity. Last month the Al-Qaeda-affiliated terror group Al-Shabaab launched an attack on Garissa University College in Kenya, killing more than 140 students. Since 2013, when Al-Shabaab slaughtered 67 people at the Westgate shopping centre in Nairobi, the group has launched more attacks on quarry workers, bus passengers and church-goers. In West Africa, the Boko Haram group has carried out a series of attacks killing thousands of people in Nigeria, Cameroon, Chad, and Niger.
An additional burden for Africa, Aludo explains, is that a crisis in one country is seen as a reflection of the whole continent and ultimately affects economic growth. At the height of the Ebola crisis, for instance, there were reports of tourists cancelling visits to countries such as Kenya and South Africa, thousands of kilometres away from the outbreak.
Negative news has an impact
“If investors are on hold because they think Africa is a tough place to do business, then it does impact our economies,” says Aludo. “No CEO is going to tell you they are not worried about the sensitive and probably volatile nature of our economies.”
In Kenya, for instance, Aludo points out that tourism, one of the biggest income earners, has suffered because of terrorism. More than 40 hotels at the Kenyan coast have shut down temporarily and 28,000 workers laid off.
But Aludo believes Africa can change the narrative by facing these crises head-on. He gives the example of how western nations like the US and France have handled terrorism by dedicating resources, passing appropriate laws, and deploying manpower to counter extremist activities.
“They didn’t bury their heads into the sand. They reacted. I think an opportunity presents itself for Africa. How we manage these [crises] can be carried forward to how Africa continues to position itself,” says Aludo.
But in the meantime companies have to deal with the realities of uncertain environments.
“What companies should do is have a very good understanding of the market they are in, and then tailor their solutions to the market,” he says.
Aludo points to multinational consumer goods companies that have thrived by involving local communities in their businesses, such as by creating opportunities for local entrepreneurs to distribute their products.
“If you look at the FMCG companies that have been successful in Africa, they engage in inclusive business. They didn’t just come in with cookie-cutter solutions,” he says.
“Once you entrench that, whether business gets risky or things go wrong…. your business will transcend.”