Brand Africa depends on more than just governments

Africa is still perceived as high risk by many investors from the developed world, so what can Africans do to create a more positive image of the continent? Dianna Games seeks out some some solutions.

Is the notion of Africa being a riskier investment proposition than other regions a reality or a perception problem? Many believe that business risk in Africa has gone down as a result of improved governance, higher levels of efficiency and transparency driven by technology, deeper regional integration and a drive for more inclusive growth.

But investors, certainly those from developed-country institutions, companies and funds, are not feeling the change enough to justify putting their money in jurisdictions with less predictable operating environments than they are used to.

Africans, unlike many across the world, believe the continent is not a risky place to do business. The continent is their neighbourhood; they know to manage it. But this is not true for everyone with an interest in doing business here.

The issue of risk, and its corollary, branding, came under the spotlight in November at the Africa Investment Forum in Johannesburg, an initiative of the African Development Bank (AfDB), which brought together companies, funds, institutions, development banks and others in a three-day deal-fest focused on the continent’s opportunities.

Even as deals valued at almost $68bn were proposed over a few days, speakers said there is still a high premium on investing in Africa because of perceptions of risk. Yes, this is offset by perceptions of reward in Africa, where many countries are among the fastest growing in the world right now. But this is not enough to offset the expectation of challenges that need to be dealt with to realise good profits in Africa.

Alain Ebobissé, CEO of the Africa50 Infrastructure Fund, said that when people sit on investment committees, the risk issue is on everyone’s minds. There is still, he said, an assumption that things won’t go well, or at least according to plan.

Senegal’s minister of economy, planning and cooperation, Amadou Hott, told delegates that investors who are not familiar with the continent are looking for returns of more than 20% while those more familiar with the terrain have lowered their expectations to a more realistic 12% to 13%.

Africans must take some of the blame. They may believe the risk is overstated but are not doing enough to sell the continent in other markets, informally and formally.

Harnessing investors’ interest

AfDB president Akinwumi Adesina is certainly doing his bit. “This is a new, more confident Africa; a continent now aware of its place in the world and determined to be a global investment haven. And Africa is harnessing investors’ interest and investment,” he told the conference. 

But it is taking time for this positive spin on a developing Africa to trickle down. A remaining battlefront for the continent is learning how to manage information in a way that addresses the negative beliefs that still colour risk perceptions. Speakers at a session on branding Africa at the forum said it is critical that any messaging needs a “demonstration effect”.  

So much of Africa’s branding is centred on what governments do, rather than the many achievements of people and leaders in other areas. Policy flip-flops, unpredictable regulation, corruption, poor investment in basic services as well as human rights and rule of law violations are among the issues that continue to characterise the narrative on Africa. It is fair to say that a lack of bold political vision and execution continues to dog the continent, with the much-needed structural transformation of the socio-economic landscape still a way off.

Time to cast a wider net

But it is unfortunate that the Africa brand story remains dependent on the actions of governments – whether they succeed or fail continues to unfairly dominate perceptions about the whole continent. It is time to cast the net much wider.

Other countries and regions host companies that tend to elevate the perception of their national brands. The common examples are Mercedes, which has branded Germany as a centre of excellence, and Samsung in South Korea, Toyota in Japan and Coca-Cola in the US, which is still seen as the quintessential American brand.  

African brands are making headway slowly on a continent that has long been import-driven, although Brand Africa’s 2018/19 survey saw just one African company make the list of the top 10 most recognised brands – MTN.

But what is changing is the recognition of successful sectors in Africa. People may not always be able to cite a brand name but they can mention a sector that is making the continent proud – fintech, telecoms, entrepreneurship, renewable energy, ICT innovation and others are among them.

Success will breed success

It requires a more concerted effort to rebrand Africa, collectively and individually. And importantly, to do so within Africa. As Adesina says: “We have not even sold ourselves to ourselves.”

A suggestion was made at the Johannesburg forum that the AfDB create an African branding facility to provide soft funding for countries to brand themselves with the proviso that only those with a good story to tell be allowed to benefit from such a facility.

Noble as that idea might be, it is unworkable. You cannot buy branding. The best way to rebrand Africa is to simply do the right thing, do it soon and do it well. The rest will follow. The old adage remains true – nothing succeeds like success.

Dianna Games is CEO of advisory company Africa @ Work