A clear call was made at the B20 business leaders summit today (20 November) with a panel discussion of senior African business leaders providing a welcome context to growing the African economic landscape while acknowledging the challenges and hurdles.
Is Africa Really Open For Business?
Ralph Mupita, CEO of MTN was asked “is Africa really open for business”? His answer was an emphatic yes. “We make about 80% of our earnings outside of South Africa, so unlike most South African listed companies who have the bulk of their earnings in South Africa, we are kind of inverted in that sense. What we’ve seen is that there’s tremendous opportunity, particularly if you follow the deficits” Mupita affirmed.
He also highlighted that there is a big structural deficit in digital infrastructure and digital services, which according to Mupita, creates an opportunity to deploy capital and human resource and ultimately drive returns.
“So, I mean, our sense is Africa is our home. So, you know, we’ve got to find a way to make it work. It is open for business” he states.
Despite the challenges, Mupita sees that the opportunities and huge future dividends exists on the continent. The perspective is one that the next 20 to 30 years holds significant growth potential. The belief from Mupita outlines that by simply providing a phone and reliable connectivity to Africans, you empower them. There is a connectivity that opens up a multitude of potential, from education, to business to investments that each build capacity and ultimately growth.
“We would put the thesis out there that it’s the most powerful accelerant for Africa’s growth over the next 30 years, and we argue it’s the biggest leverage …. between the biggest challenges we have on the continent, concluded Mupita.
Africa is Blessed with Problems.
A key theme that arose in the session this morning was that where there is lack – there is also opportunity. African serial-entrepreneur and education specialist Fred Swaniker, provided a refreshing perspective. “When there’s a lack of energy, lack of finance, infrastructure, education, health, you don’t have to be a genius to find that idea in Africa, so I would say that Africa is actually an entrepreneur’s paradise”. “There’s so many things that you can start Swaniker opines.
“In my case, we’ve launched about nine different ventures. We’ve raised about 1.7 billion dollars. We’ve created 2,000 jobs directly” he says.
“Because a lot of the work that we do is also in education, we directly create a lot of those, and we bring a lot of innovation in different sectors. So I found that there are opportunities.
I mean, just as one institution, there are 10,000 tech startups that came out of our institution. So there’s a lot of activity of entrepreneurs in getting started” Swaniker contends.
Challenge Solutions for Africa
A top tier challenge for businesses in Africa is access to markets according to Swaniker. African markets individually are small. And most African businesses that succeed and scale , are those that have succeeded in thinking beyond their own borders.
“If you focus on producing in Africa and selling globally, then you’re able to get access to much bigger markets as well” he contends. “Because in Africa, GDP is only a few percent of the world’s GDP. But suddenly, if you produce and sell globally, you can really build big businesses” he says.
Swaniker also outlined his thoughts on opportunity around AI and its ability to accelerate areas of business such as productivity and the cost of venture start-ups.
AI, according to Swaniker, is able to increase the productivity of African talent at a scale in a way that’s never been possible. “Because suddenly, young people who are equipped with AI skills can compete for jobs globally” he says. “And their productivity improves, you know, allows them to catch up in gaps of education that they may not have had”.
Start-ups should also be using AI agents as employees and to do admin functions, improving the ability for Africans to create new ventures which will improve competitiveness and the ability to scale operations.
Infrastructure an Government Challenges
There are currently around 600 million Africans who don’t have access to electricity. And while there have been a number of initiatives to try to address this it remains Africa’s achiles tendon.
Axion Group CEO Hassanein Hiridjee, gave his perspective to this challenge, and outlined how his company was building infrastructure to provide one gigawatt of power throughout 12 African countries. This is mostly renewable – mainly solar and hydro. “What we see is that now by the learning curve has gone so fast that the cost of panels, the cost of batteries has gone down and we can give very affordable energy solution to the people” says Hiridjee.
He also spoke candidly of the failure of governments. “Our biggest challenge in energy, I mean, we’re not serious, Our government, I’m sorry if there’s some government official in the room, let’s be serious. I mean, it’s taking age to get a PPI, it’s taking age to get concession agreement signed” he contends.
He asserts that if one looks at the digital telecommunications industry – this was deregulated 30 years ago and is now seeing double digit growth and that the same principle should be applied to electricity generation to provide scope for private partnerships to take the grid growth and power generation in Africa to the next level.
“I mean, our population is not waiting, they’re waiting for solutions, they’re not waiting for problems”.
“Because transmission lines are still public, because distribution is still public, only generation is a private line. It’s not enough. Let’s co-build together, let’s do private-public partnership” pleads Hiridjee.
