Delivering on African’s promise

The 23rd edition of the World Economic Forum (WEF) on Africa begins this month in Cape Town, South Africa. As previously, a heavyweight delegation comprising heads of state, ministers, business and social leaders will gather to take stock of the current state of affairs in Africa and chart the way forward. This will be a particularly significant conference as Africa makes the transition to middle income status and thus begins a new and exciting chapter in the continent’s modern history. As we have done previously, African Business is proud to partner the WEF in this great endeavour. To find out what lies in store, editor Anver Versi went to the WEF headquarters Geneva, Switzerland and talked to the people working behind the scenes.

The theme for this year’s forum is ‘Delivering on Africa’s promise’. Over the years, the forum has accurately tracked developments – or the lack of them – in Africa and provided an invaluable space for free and frank discussions from a variety of involved parties and individuals to dissect and analyse the most significant issues affecting the continent and its people.

This coming together of the great and the good in Africa and elsewhere not only focuses attention on issues that affect us all but provides an arena in which ideas can be thoroughly thrashed out and the huge variety of viewpoints accommodated.

The format of the forum is very broad. In addition to the plenary sessions, there are work studios and workshops, arena ses- sions where leading business and government leaders debate topics, one-on-one interview sessions, televised sessions, pre-conference meetings and sessions devoted to finding new solutions to intractable problems affecting the continent.

Speeches and long-drawn-out presentations are discouraged. The aim is to have free-flowing interactive discussions with frank exchanges. Some of the sessions are held under Chatham House rules, where the press is barred and neither the identity nor the affiliation of speakers is revealed. The aim is to provide anonymity and encourage open- ness and the sharing of information. While the focus is on economics and business, the WEF principle is to ensure a holistic approach since all human activities are interrelated.

Africa is in a very different place today from where it was a decade ago. It is no longer a ‘problem’ seeking solutions from all and sundry. It has now become the ‘last frontier’, the ‘new growth pole’ on which global economic growth is becoming increasingly de- pendent. It is being wooed by East and West.

But despite the continent’s average 5% growth over the last decade, a great deal of work still needs to be done. The majority are still poor, many millions still go hungry, basic healthcare and education are still far from satisfactory, only a very small proportion of the population has access to clean water and basic sanitation and even fewer to electricity while decent housing remains a dream for millions.

It is only when the average African, in whatever country he or she finds themselves living, can enjoy the facilities and the lifestyle that are taken for granted in the developed world that we can pat ourselves on the back and say we have succeeded. Everything else is simply part of the journey to get to the Promised Land.

There is no reason why this should be such a long journey. Africa is bursting with resources that the whole world needs, it has vast arable tracts of fertile land, huge water reserves, a population that is large enough to form a dynamic consumer market but not too large to become a burden, a workforce that is young, energetic, hard working, very innovative and with a burning desire to succeed.

Africa has weathered slavery, colonialism, proxy wars, despotism, looting, denigration, swindles and a million other evils and come out the other end still smiling. Any conference whose objective is keep and broaden the smile on Africa’s face is welcome – otherwise it is a waste of time.

Suffused with glamour

Elsie Kanza is head of Africa at the WEF. She is soft spoken, very charming and ready to burst into a smile at the first opportunity. The success or failure of WEF on Africa rests on her organisational abilities. With her small, hard-working team, she has to fashion out a programme that is relevant to Africa today, allocate speakers, panellists, moderators, discussion leaders and attend to the nightmare logistics of dealing with a clutch of heads of state, dignitaries, business tycoons, academics, the media and the hundreds of delegates who will be flocking to Cape Town this May.

Make no mistake. The WEF is unlike your common or garden conference. It is the Oscars compared to your town-hall prize giving. It is suffused with glamour. There are massive egos rubbing up against each other and every panellist is on notice to put out their best performance. People want to see, be seen, listen and be listened to. The adrenaline flows freely, charging every discussion with crackling electricity.
Through it all, she must make sure that the focus does not stray from the theme and that in the tumult of strongly held convictions, a path of substance can be forged to advance the cause of Africa’s progress.

Africa, the WEF says, is moving from a developing continent to becoming a hub of global growth. While the World Bank says that almost half of Africa’s countries have attained middle-income status, there are dangers ahead, including fluctuating commodity prices, rising inequality and youth unemployment. To overcome these challenges, Africa must accelerate economic diversification, boost strategic infrastructure and unlock talent. She explained to me that the discussions at this year’s forum will focus on these three strands under the overriding theme of ‘Delivering on Africa’s Promise’.

What outcomes does Elsie Kanza and her team expect from the forum? “We know that Africa must move from primary production; the question is how and in what direction? The African economy is not just oil and gas and natural resources. This leaves the continent vulnerable to price fluctuations. There is a rich cultural tradition of value addition. We have to scale this up and gain a better understanding of what growth should look like. The South African economy is a good example of diversification,” Kanza says.
Indeed, if a dozen or so countries can use the revenues generated from natural resources to diversify their economies much as South Africa has done, the industrial revolution that Africa now needs to create meaningful jobs and improve the living standards of its people will be well under way.

“It is important to think beyond 2015, post the MDG goals,” Kanza says. “The focus is on providing primary education but secondary and tertiary education are equally important to improve human capacity.” This is a critical point. From an industry and investment point of view, perhaps the biggest sticking point is the lack of skills on the continent. But skills do not develop in a vacuum. If Africa is to link up with the global mainstream, it must have a reservoir of well-educated youth in all disciplines – engineers, doctors, scientists, IT specialists, lawyers, media experts, economists.

“This is what we call unlocking Africa’s talent,” she says. “By 2015, Africa will be the youngest continent, demographically speak- ing, in the world. What does the current jobs landscape look like? We have either inadequate skills or academic degrees for which there are no jobs. We have to focus on entrepreneurship, on SMEs and involve more women in the continent’s talent pool.”Developing youth leadership is just as critical. “It is important that we have role models and that we share success stories so that others can learn what leads to success or failure.”

She points out that there has been a tremendous interest and take-up of online learn- ing. A number of US universities, including Sanford and MIT have been offering degree-level courses free online through programmes such as Coursera. “This has implications for African universities and business schools but it is a move in the right direction.” How can African universities turn themselves into hubs of innovation and capacity building?

Philanthropic foundations, many of which have been set up by successful African entrepreneurs can go a long way in unlocking African talent. Companies, through their CSR programmes can create expanding ripples of mentoring by ‘impact investing’ and thus become channels for greater inclusiveness.

“We have to discuss values – how do individual actions impact on the social contract? What does success mean? What are rights and obligations? What is the role of culture and what part does religion play in an evolving economy? There is a growing interest among the youth in family planning. Should we have smaller families? How to prevent the boom from becoming a bust?”

The smart approach

A number of sessions will be devoted to making Africa more competitive. While there is a great deal of innovation, especially in the IT sector, within Africa, it is crucial that we go about things in a smart way. “If we produce the same things, we cannot sell to each other.” This leads us to economic integration and the need to develop strategic infrastructure such as roads, railways, airways, waterways and energy to stitch up Africa’s various economies into a viable and dynamic market and production crucible. Without adequate infrastructure, Africa is at risk of losing around 2% of GDP growth per year.

But financing infrastructure is beset with hurdles. The public sector does not have the resources to undertake major infrastructure projects and PPP has been only sporadically successful. This has called for thinking out of the box and the continent has responding by creating a commonly accepted plan of its infrastructure priorities – the Programme for Infrastructure Development in Africa (PIDA) developed by the AfDB, the African Union Commission and NEPAD Planning and Co- ordinating Agency. The programme focuses on 51 short-term projects through 2012–2020 at an estimated cost of $7.5bn annually.

Kanza believes Africa’s infrastructure gap could provide an exciting and profitable in- vestment opportunity, particularly to some of Africa’s new international partners such as Turkey, Korea, Brazil and the UAE. continent’s soft infrastructure – people, policies, processes.” She wonders if revenues from mining, for example can be channelled to boost infrastructure development.

A good deal of discussion will be centred on agriculture and how to mobilise increased private sector investment, develop regional markets and empower women farmers. “We have to think of ways to mitigate climate change which is already affecting Africa and the effects of natural disasters such as flooding and draughts. Africa is still very much dependent on rain for agriculture but you cannot control the climate. What is the way forward?”

One of the sessions will be devoted to busting myths about investing in Africa. “One of the persistent myths is that Africa is a high-risk investment destination,” says Kanza. “In fact it is one of the safest and with the highest rates of return. While global FDI into Africa remains low, there is a huge increase of African investment into Africa. It is important to separate perception from reality and make sure that the right information is conveyed.” Another interesting session is titled ‘Made in Africa’. Panellists will examine how to tap into local innovations and products to launch globally recognised brands, how to facilitate access to regional and global markets and how to remove supply chain constraints.

This is a brief summary of some of the issues that are on the agenda for the 23rd edition of WEF on Africa. Invariably, the discussions tend to broaden out as new ideas are thrown into the ring and new perspectives are brought to bear on old issues. What is certain is that this year’s event will provide enough food for thought to keep African and Africa-oriented thinkers and actors busy over the next 12 months.