Africa’s growth has been recognised as more than just a resource boom: construction is booming and there is exceptional growth in banking and retail as well as in telecommunications, with over 320 million new mobile phone subscribers signed up since the year 2000 out of a total population of approximately one billion people.
And now, to say that Africa is presently one of the hottest regions of the world is to state the obvious.
The continent, once considered the backwaters of economic development, has consistently delivered impressive growth rates northward of 5% annually over the past decade.
The statistics paint a glowing picture. The continent hosts six of the world’s 10-fastest growing economies over the past 10 years: namely Angola, Chad, Ethiopia, Mozambique, Nigeria and Rwanda, and the talk now is that a seventh will emerge among the top-10 within the next half-decade. All forecasts point to Ghana — another high growth country — returning the highest GDP growth rate globally for 2011, at anywhere between 12 and 30 percent.
Juxtaposed against a sluggish global economy, with the advanced countries caught in the throes of debilitating financial crises which show little sign of bottoming-out anytime soon, the writ of Africa’s investment potential looms even larger.
Africa’s collective GDP in 2008 was US$1.6trillion and has now surpassed that of Brazil or Russia. The continent’s collective GDP is expected to increase to US$2.6trillion by 2020 and combined consumer spending is forecast to hit US$1.4trillion, up from about US$860billion in 2008.
These new dynamics on the global scene are forcing new thoughts and ways of engagement for the world’s people – coupled with the greater need for Africa’s public and private sectors to collaborate more to ensure efficient delivery of public goods, which are in critically short supply – and call for a new type of business leadership on the continent. And this is what this year’s Vodafone African Business Leaders Forum will seek to define and promote.
Over the past eight years, the African Business Leaders Forum (ABLF) has marshalled the thoughts and energies of experts and leaders from across the public and private sectors towards Africa’s social and economic regeneration.
The intensity and insightfulness of discussions have shone light on the vast opportunities that abound in Africa and have increasingly attracted the interest of the continent’s movers and shakers.
This year’s forum promises to be unrivalled, with the biggest collection of experts from varied backgrounds ranging across academia, business and culture, and drawn from both the public and private sectors to hold what promises to the most profound conversation yet about what is the most imperative theme on the continent presently: Enhancing Africa’s Business Opportunities through Effective Public-Private Partnerships.
Far from its previous image of “Hopeless Continent, Hopeless People”, everywhere we look today on the African continent we see great opportunity – to build infrastructure, boost trade and investment, improve governance, bolster education and human development, and strengthen regional partnerships.
These opportunities undoubtedly can be maximised through effective public-private partnerships, steered by a dedicated, progressive and responsible leadership. Now, more than ever, there’s excitement about Africa coupled with a great sense of optimism and confidence that the continent stands better-able to turn these opportunities into tangible actions which improve lives and engender prosperity.
And as always, leadership is the main driving force that will turn these new and expanding opportunities into the vision that is sought. It’s what we have always believed: that good leadership is a central factor in the success or failure of nations, of companies, of public-sector institutions, and local communities.
The Vodafone African Business Leaders Forum is vital in defining the future prospects for Africa and its peoples. This broad leadership network-gathering complements other ways of exploring and debating challenges facing the continent and providing cogent solutions to its massive investment gaps.
Having demonstrated over the past eight years that addressing the continent’s challenges does not happen in a vacuum, this year’s Vodafone African Leaders Forum will focus attention on trends in investments across Africa — specifically examining what this means for organisational leadership in Africa and considering the critical questions of whether we have the best calibre leaders today and tomorrow to lead our organisations, and whether we clearly appreciate issues relating to government and private sector interdependence, global versus local (indigenisation) outlooks, and commercial drivers and socio-economic development issues among others.
Defining and indentifying the right leadership is even more imperative given the unprecedented growth being recorded in an increasing number of hitherto stagnant economies and across several sectors.
Agriculture has been identified as one of the industry groups to drive GDP in the coming decade, with massive investment opportunities offered by plans aimed at modernising the sector. Indeed, agriculture is Africa’s largest economic sector, representing 15 percent of the continent’s total GDP with a total value of more than US$100 billion annually.
It is estimated that 25 percent of the world’s arable land is on the continent producing 10 percent of global agricultural output, but with much more room for growth as the continent currently holds about 60 percent of the world’s total amount of uncultivated arable land.
Surely, many factors underpin recent growth. While many are still wont to view African countries as governed by hopelessly corrupt governments, and the African Union as lacking in confidence to offer the needed leadership, an increasing number of countries on the continent are thriving democracies which are pushing reforms, both in their electoral processes and their economic management, to make them more transparent and productive.
And though the existence of recalcitrant political leadership and its drawback on continental development cannot be discounted, many countries are changing governments through the ballot. Civil society is also gaining so much strength and influence that had hitherto been smothered by the political elite.
But there is still much to be done. Political and economic reforms are yielding obvious dividends with current expectations tending towards the emergence of a pride of African economic lions to supercharge the continent’s drive towards greater global prominence. However, two critical issues need urgent attention if the continent’s newly-discovered dynamism is to be sustained over the long-term.
Firstly, intra-African trade and investment is minimal. Ghana’s trade within West Africa, for instance, constitutes only 12% of its total international trade; and the same is mostly true for most countries of the sub-region. And worse is Africa’s contribution to total global trade. However, that situation is changing fast.
There is now greater effort to improve south-south trade. South Africa, India and Brazil are currently in talks to fashion-out measures that will enhance trade and investments in those three countries so they serve as focal points to pull their respective sub-regions along towards greater collaboration between Africa, Latin America and Asia.
But perhaps the greatest impetus to FDI flows into the continent is the emergence of China as a foremost global economic player with its Africa policy of investments in critically-needed infrastructure in return for natural resources from the continent.
China’s concessional finance deals, in the form of “state capital” to African countries, and the Asian giant’s special economic zones (SEZs) concept whereby six African countries (Angola, Egypt, Ethiopia, Nigeria, Tanzania and Zambia) have ongoing projects in establishing light industrial manufacturing, industrial parks and logistics hubs, have disrupted existing risk-models in Africa.
While it seems many African economies and Governments do not comprehend the forces of engagement coming out of China toward the continent – both on the (resource) demand and (capital) supply side — China’s “developmental model” will increasingly influence African micro-economic policy and economic management.
Development Finance Institutions (AfDB, IDC, DBSA) will have to respond to the Chinese financing model of infrastructure in Africa. The Chinese model may now encourage and indeed more easily facilitate major cross-border investments on the continent in energy and other critical projects.
Secondly, greater collaboration between the public and private sectors is required to sustain the impetus of Africa’s current high economic growth rates.
The continent’s infrastructure, both in qualitative and quantitative terms, is quite poor and services are lacking. Investments have not been adequate to provide a sound basis for the continent’s development, and there is therefore need for such infrastructure investments to rise so as to create the growth and opportunities required to lift incomes and lifestyles of the majority of Africa’s people.
But while international oil companies have been noted to be doing well in Africa by applying their operating capabilities and financial muscle, indigenous national oil companies have been constrained by the challenge of developing local technical, commercial and managerial capabilities.
Yet another area registering impressive gains is in infrastructure development. Spending on African infrastructure has risen considerably: however, the size of the investment gap still remains massive. And examined at a more granular level, such growth has occurred in a limited set of countries and sectors with mobile telephony infrastructure investment accounting for a high percentage, as does electricity generation, transmission and distribution, and natural gas transmission.
Notably, China’s infrastructure investments in SSA have surpassed the World Bank’s since 2005 and the Asian giant now looks set to be the single-biggest driver of infrastructural development on the continent.
Obviously, African leadership — be it political or economic — will have to move more and more beyond what is known into uncharted territories as new developments introduce new players and new approaches to tackling the development agenda of the globe’s last development frontier.
The crop of new leaders, whether in private practice or in the public sector, will also have to learn new ways of collaborating more if the continent’s chronic infrastructure lag of the global standard is to be addressed effectively.
The Vodafone Africa Business Leaders Forum offers a platform that undoubtedly proves to be biggest gathering of the continent’s leaders in various spheres brainstorming the continent’s future — and which definitely should provide insightful ways of dealing with both old and new challenges facing Africa.
“We greatly anticipate your participation in Africa’s moment of decision, where in partnership we lift the continent onto the pedestal of development that we all crave for,” said Mrs. Edith Dankwa, Executive Director, Business and Financial Times.