The New Africa

Africa is the world’s second largest land mass and also the continent
with the second largest population. About 15 percent of all humans live
in Africa.

The continent has the most abundant resources but also the world
lowest level of development with 25 of its 59 countries featuring in the
bottom of the human development index.

The reasons cited for the low levels of development include the greed
of leaders, lack of central planning and endemic diseases and
infrastructure challenges.

The reality is that Africa is changing.

With many organisations seeing the opportunity of larger communities
that have a need for real solutions, there is an acceleration of African
solutions that is transforming the opportunity, need and manner of
investment.

Information technology is transforming the human condition in general
with information enabling and informing the attitudes of individuals.
With politicians increasingly finding it hard to hide their former
abuses, information is becoming the weapon of transformation. And in
this transformation it also highlights what is needed and where
opportunities are present. With the number of cell phones outnumbering
the number of toilets in Africa – it is fast becoming a tool for
educating and connecting people. Information in Africa is still a
limited resource but as it is coming on-stream it is changing the way we
think about the continent.

When people are connected – they become a force for self-planning and
self-organisation. Also by tracking behaviour larger communities and
markets become visible. What was previously very difficult information
that could only be collected at great cost can now be start to be
integrated into solutions. So what is the information saying now?
Africans need avenues for investment and investment in Africa seems to
offer high returns. So it seems that the market that is developing will
form the basis of a new wave of entrepreneurs and investors in
Africa.

Higher levels of education are also assisting with a different
attitude towards trade and investment. Traditional aid based regimes are
being redesigned to be beneficial to locals. Insistence on local content
and local beneficiation is creating new paradigms of co-investment.
While there are a lot of inflows from the major continental players –
Africans are also starting to invest in their own countries and other
countries in Africa. This is long overdue…

While there is still a long way to go – there is hope that at least
we are working on the right issues.

Key issues include

• Creation of African financial markets and institutions

• Access to electricity

• Creation of local manufacturing industries

• Education

• Local beneficiation of resources

• Strengthening of law-making and legislative frameworks

If we created the energy to drive the growth of the continent, then
we can transform this place into one of the largest and most productive
regions of the world.

The challenge is that we often go about it all wrong. We think we
need money and skills from other countries and for this we sell the
farm. We have more knowledge than we think and when we put our minds to
it – we get things done. We must however create more hubs in which
knowledge is created and disseminated. For this reason there is a great
need to stimulate education and the formation of education institutions
in Africa. We have built a perception that foreign education is the way
– which there are very good educational options in Africa.

The second aspect is bravery. We need to be brave in Africa and fight
economic and financial battles to ensure that we create the
infrastructure that allows for further growth. The battle has moved from
fighting cultures to fighting with our minds.

The third aspect is opening access. It is difficult for Africans to
do business in Africa. We have designed laws that make foreign outflows
difficult – so much so that it is difficult for African companies to
invest in the rest of the world. We must realise that this will have to
change and become smarter in managing our own foreign investments. If we
invest in our own countries and in other countries – we will start
benefitting from our own resources as well.

One of the challenges in Africa is that everyone believes that there
is a quick buck around the corner. It is simply not true. You have to
build the building to get the return. You have to invest in the asset to
get the income. You have to build the power station to have the power.
We get so tricky and want to do so many deals that at the end of the day
the power station does not get built and corruption and bribery ate all
the money. Nothing is easy and nothing is free. Africans will need to
learn to work hard in the next ten to fifteen years – else people that
do work hard will take the continent.

For African education institutions it is imperative to teach
management skills, technical skills and to create solutions to real
African challenges. Africa is going to need a lot of skills to transform
and cost effective solutions to make this work is now more important
than ever.

So if we can stop selling our roads and buildings and investment
opportunities to foreigners – there is hope that Africa can start moving
towards a new way of thinking. This way will be one in which the
challenges that we face every day gets acted on as opportunities and
where groups and teams of investors combine to take on challenges and
make money doing it.

For everything that is imported – we must be asking ourselves how
will be have an African version of this? For every dollar that gets
transacted in Africa – we must ask why the local currency was not good
enough for this transaction.

The African way must become – “We solve our own problems here!”. When
Africans direct their pride to African solutions and step up in the
desire to really have self-determination – then Africa will grow.
Africans have always found ways to overcome the toughest conditions and
if we take this into the next decade as our call to action – then we
will see a new Africa emerge.

As a business, it is important to ask if you have an Africa strategy
and what this entails. Africa is a major opportunity – but Africa is
also not an easy opportunity.

A feasibility study is recommended for expanding into a country and
as a minimum needs to cover

• Legal form required in the new country

• Key markets that can be serviced

• Pricing of goods and services that will be offered

• Regulatory requirements

• Physical location

• Cultural factors of doing business

• Availability of suitable human capital

• Marketing strategy

• Financial planning

It is further important to consider how that operation will be
managed. It is a big decision to deploy expats or to recruit and manage
in country as both decisions have implications. Communication is
critical in both instances and it is important to ensure that
communication channels are established and acted on.

The crucial consideration is to know that expanding to any country
has a financial implication and you should be ready to invest in order
to get returns. This is not always well understood and many businesses
under-estimate the required investment in branching out. This should not
be a deterrent – but must be considered when putting together your
strategy.

Conclusion

The next twenty years will see a massive growth in Africa. As new
generations that have been exposed to technology and new thinking start
taking the lead in Africa it will be a very definite must to do business
in Africa. Every African must take responsibility for creating this
investment.