Last week’s World Economic Forum Annual Meeting 2012 in Davos, Switzerland featured two sessions specifically focused on sub-Saharan Africa. How we made it in Africa looks at the highlights from these sessions.[hidepost=9][/hidepost]
One session, called The New Context in Africa, included business leaders such as Paul Walsh, chief executive of drinks company Diageo; Koos Bekker, CEO of South Africa-based media company Naspers; and Linah Mohohlo, governor of the Bank of Botswana.
Key takeaways from this session were:
- Africa is on a clear growth path. The continent rebounded strongly from the global financial crisis and a number of countries are undertaking encouraging reforms.
- Leadership is becoming better, with governments seeing the value of strengthening their respective economies.
- However, too little public expenditure is going to the building blocks of the future, such as infrastructure and education.
- The continent is benefiting from strong interest by investors in other developing nations, but African governments need to do more to negotiate better deals for their respective countries in relationships with large markets such as China.
- Rapid urbanisation on the continent is creating many business opportunities.
- A combination of rising incomes and growing populations is resulting in significant investment in consumer markets.
- India has many products and services aimed at Africa’s low-income consumers. Indian companies understand the markets in Africa because they reflect the experiences and trends in their own country. Companies from other regions are also seeing good results from African investments and, as a result, they are finding it easier to get approvals for new investment from shareholders.
- Many investors still have a negative perception of the continent. Focusing on Africa’s challenges, such as disease and poverty, may attract aid, but is bad for business.
- International media coverage is starting to highlight Africa’s successes. Africans, too, are beginning to believe in their own success and becoming more self-confident in their endeavours.
Another session, titled Africa – From Transition to Transformation, moderated by former UK prime minister Gordon Brown, included various African heads of state, such as South African president Jacob Zuma; Alpha Condé, president of Guinea; and Meles Zenawi, prime minister of Ethiopia.
The following points were raised during this session:
- Africa faces various riks as a result of the global economic slump and its impact on commodity prices. To mitigate these risks, African countries should diversify their economies and become less reliant on minerals. Intra-African trade should also be boosted to decrease dependence on Western markets.
- Integrating the building and management of roads, ports and railways across the continent could only lead to greater and more viable intra-African trade.
- With manufacturing set to move away from Asia, Africa can attract this investment. The continent is the “natural destination” for labour-intensive industries.
- African leaders “must change attitudes” and fight for their people rather than for their personal power.