In the latest of a series of events organised by the Africa Soft Power Project, some of Africa’s leading voices came together to discuss the new face of African collaboration. They considered the evolution of digital infrastructure on the continent; the benefits of intra-African integration; and the transformative potential of greater connectivity for Africa’s creative industries and knowledge economy.
African creative industries make a sizeable contribution to total economic activity and are worth about $20-23bn in annual exports, but this is still equivalent to just 1% of the industry’s global total. The continent has as many great stories to tell and cultural styles to share as any other part of the world, yet the financial and technical infrastructure to bring this about is often lacking. The Africa Soft Power Project has therefore been set up to help Africa to optimise its knowledge industries and harness its soft power.
The economic expansion of Africa’s creative sectors can take advantage of the new African Continental Free Trade Area (AfCFTA), which offers great opportunities for the expansion of infra-African trade and more rapid continental economic growth. At the same time, African soft power is being advanced by the selection of Africans as leaders of influential organisations, including Ngozi Okonjo-Iweala, who became the first African – and first female – leader of the WTO in March.
Benedict Oramah, the President of the African Export-Import Bank (Afreximbank), kicked off the New Face of African Collaboration seminar by saying that it was time to stop talking about Africa’s potential and actually realise that potential instead by taking advantage of the continent’s diversity.
“The problem in Africa is that we have not been able to monetise the opportunities to create a market; because once you create a market, the investment will come, the innovation will come”, he said.
Afreximbank is focusing on encouraging digital platforms to market cultural products, thereby making the most of the AfCFTA. It needed to be easier, for example, for Egyptians with an interest in Nollywood films to be able to access them, noted Oramah.
This should now be simpler following the creation of the Pan-African Payment and Settlement System, which has been developed by Afreximbank under the auspices of AfCFTA. The system allows payments to be made in local African currencies, without customers having to use US dollars and at the same time instilling confidence in the payment method. “We can only begin to create a market if we use the AfCFTA”, said Oramah.
In January 2020, Afreximbank launched its $500m Creative Industry Support Fund to support the production of and trade in African cultural and creative products in sectors as diverse as film, music and fashion. SMEs working in the film industry, for instance, are very small and not able to attract substantial funding, so Afreximbank is trying to make it easier for banks to finance them.
The New Face of African Collaboration took place virtually because of Covid restrictions and Oramah explained how Afreximbank was supporting pan-African collaboration on securing Covid vaccines. Bilateral deals by African governments and others to secure vaccines had only succeeded in securing vaccines for 20% of the African population, while minimum 60% coverage is required to help suppress the virus.
Afreximbank has therefore supported the African Union in securing another 70m vaccines with a financing requirement of $2bn. The challenge of securing and financing more vaccines has not yet been met but by working together, African countries do not need to solely rely on others to supply their vaccine requirements.
Africa Investment Forum
Chinelo Anohu, Senior Director at the Africa Investment Forum (AIF), explained how the AIF was set up by the AfDB to accelerate investment into Africa by pooling resources between different organisations. The Forum is not a series of events but an ongoing process of striking deals.
As Anohu said: “The AIF is highly transactional: it’s not a talk shop, it’s not a thinktank”, arguing that it was one of the tools needed “to move away from the talk about African potential to actually doing the deals that will change the continent”.
The AIF works a matchmaking service between developers and investors, taking projects all the way through from deal origination and screening to completion. “We don’t just bring people together; we’ll talk to them when they have those deals; we track those deals and identify bottlenecks in time to provide solutions for those bottlenecks”, she said.
At the second Forum in Johannesburg in November 2019, deals worth $40.1bn secured investor interest, up from $32bn at the first Forum in 2018. These high profile events showcase what has been going on throughout the year. A total of 118 deals worth $114m are now at various stages of the development pipeline, with all types of investors involved, including institutional investors and private equity.
Anohu emphasised the benefits of accurate data in encouraging investment and said: “When we’re curating investor interest and tracking them, you find that a lot of investor interest is premised on the fact that they don’t have enough data to make a decision.”
The AfDB has a substantial research division that is seeking to fill that gap by providing data to both the project sponsors and potential investors. Accurate data and analysis can help to overcome negative perceptions that are not based on reality because investors err on the side of caution if they don’t have hard data, she noted.
The Netflix angle
Dean Garfield, Vice President, Public Policy at Netflix shared the experience of one of the world’s biggest content platforms and producers in expanding in Africa, where he said his company needed to have success if it were to fulfil its aim of becoming truly global.
He said that three elements needed to be in place for investment: creative infrastructure, including a strong story telling tradition; the physical and payment infrastructure to allow content to reach consumers and also pay for it; and a regulatory landscape that lends itself to functioning at scale.
Garfield noted that the cultural ecosystem needed to support sustainable operations is uneven today, with strengths in some markets, such as Nigeria, South Africa, Ghana and Kenya, but not others. Netflix’s growth trajectory could mirror that in Europe, where it began by focusing on a few big markets but is now producing content in every EU member state as a result of evolution over eight years. As more Africans subscribe to Netflix, it will have more resources to invest in production.
Netflix develops content within the markets in which it operates but is also keen that those stories can be heard further afield. “Great stories resonate: there’s the human element and the human connection and the stories that we’ve done so far in Africa have travelled well”, noted Garfield. On intellectual property, he said there needs to be some consistency across the continent for both talent partners and for Netflix.
“The digital infrastructure does exist. The difference between Africa and other places is the price point around the digital infrastructure”, he said.
Digital access is expensive in comparison with other parts of the world but Garfield said that Netflix had deployed tools and technology to help tackle that. He emphasised that the diversity of payment methods needed to be as great in Africa as in other parts of the world, with transactions as frictionless as possible, both in terms of payment and also streaming.