The 2021 Africa Business Summit – Re-thinking the way forward: Toward sustainable growth – sought to explore how Africa can maximise growth opportunities, as well as highlight key enablers for sustainable recovery and inclusive growth. The panel invited – Dr. Nick Hughes, co-founder, M-PESA and M-KOPA, Tolu Agunbiade, Regional Director, ALX, Dr. Sahar Nasr, former Egyptian Minister of Investment and International Cooperation, Geoffrey White, CEO, Agility Africa and Lorenzo Tencati, co-founder and Director, Singular Group as moderator.
The session considered the drivers for unlocking avenues of growth and prosperity across Africa – in particular, the four key enablers seen as crucial for the continent moving forward:
- Technology and the rise of digital solutions;
- Human capital and its salience given Africa’s relatively youthful population;
- The role of government policy; and
- Adequate infrastructure and logistical provisions.
Technology and the rise of digital solutions
Lorenzo Tencati opened the session by asking the panellists about the role of technology in enabling Africa’s growth: “Can it really be a driver, or even a panacea? Can it free Africa from its constraints?”
Nick Hughes cautioned against conceptualising technology as a silver bullet in and of itself: “We have to keep technology in perspective. It’s a very important enabler, but it is just that – an enabler. It allows us to re-think business models, but we still need to apply the technology to fix the problem.”
He cited his own experience at M-PESA, a mobile phone-based money transfer service operating in Africa: “We didn’t invent the need to move money around – people have always struggled with this problem in the largely cash-based economy that is prevalent in Africa. All we did was invent a simple way to move money using a virtual wallet. Technology has allowed us to do that, but fundamentally we were focused on solving one problem.”
While stressing the role of technology as one in a package of tools for growth, Hughes added there were many exciting developments underway. He named digital identity and government-backed digital currencies as two specific areas that he saw as significant growth opportunities for Africa. “You can see efficiencies being drawn out and it won’t happen right away, but I think they hold a lot of potential.”
Human capital and its salience
A second enabler for Africa’s growth was discussed by Tolu Agunbiade: Africa’s significant human capital. With more than 60 per cent of the continent under the age of 25, the need to educate and employ this large proportion of the population can be seen as both an opportunity and a challenge. Technology also had a role to play here, Agunbiade said.
“There are ways of leveraging technology to make sure people have access and are able to create opportunities for themselves – because once you have entry into this digital world, it opens you up to so much more,” Agunbiade said.
“One of the things coming out of COVID-19 is that the world has become more global: you saw more and more people reaching out across social media and the internet for jobs. This is one of things we can harness, because it shifts some of the onus from the government or the private sector to generate jobs; it gives agency to our youth to create those opportunities for themselves.”
According to Agunbiade, entrepreneurship was one underappreciated avenue for growth – particularly for young people. “Entrepreneurship has a multiplier effect: for every one person who starts a business, they’re going to employ at least one other person. We should encourage and support more individuals, through funding, training or some other means, to consider entrepreneurship – not just to survive, but to adopt as a livelihood.”
The role of government
Next, Tencati invited Dr. Sahar Nasr to speak on the third enabler – the role of government – citing Egypt’s successful economic turnaround in recent years. “It is undeniable that there is a huge correlation between economic development and quality of governance and policy,” he said. “What are some lessons from Egypt’s experience that the rest of the continent can apply?”
“The first thing is that governments need to acknowledge the challenges they face – the gaps, the problems and the impediments,” Nasrsaid. “In Egypt, we had just been through a revolution, business confidence was low, there was a fiscal deficit – once we had acknowledged all that, then we could put in place a comprehensive programme.”
Nasr said the government’s programme also applied a holistic view, identifying structural reforms in addition to changes to fiscal and monetary policies. “We had to ask: is the current environment conducive for the private sector? Can small businesses survive? Is there a level playing field?
“One lesson we learned was that governments should not be preparing a programme in a non-inclusive manner. You need to reach out to academia for their knowledge and seek out accounts from the private sector about the difficulties they have on the ground. Bring in NGOs, development partners and civil society. They can all play an active role: we need to work together,” Nasr explained.
Adequate infrastructure and logistical provisions
Tencati then raised infrastructure as the fourth enabler to boosting Africa’s growth, asking Geoffrey White for his observations on the topic.
“Infrastructure is fundamental to making African commerce work,” he responded. “Without the ability to move goods in and out of the country, you can never compete. Infrastructure in the continent is getting better and better, but we’re still very far behind our competitors.”
“We are making progress in terms of hard infrastructure – ports, airports and roads – but the reality is that the execution of these projects in Africa takes three times longer than it does anywhere else in the world. So we need to focus on making this process more efficient.”
Energy reliability was also seen as another area for improvement. “If I look at it from an economic perspective – power enables you to produce your goods competitively. If the power goes off twice a week and you have to run your factories on back-up generators, your economics go out the window – you’re no longer competing.
“To become a manufacturing centre and support business development, Africa needs to get on top of the hard infrastructure, and make energy sources consistent and cheap,” White concluded.
Tencati drew the session to a close by reflecting on the four enablers that each of the panellists had discussed as crucial to Africa’s growth. “Our best wishes go to technology, human capital, government policy and infrastructure – they are the pillars to the inclusive pan-African success story.”
Enablers for an inclusive pan-African success story was part of London Business School’s Africa Business Summit – a student-led initiative by the Africa Club – hosting change-makers, business-builders, and inspiring leaders at the front-line of the African continent’s success. The Wheeler Institute for Business and Development is delighted to collaborate with the students who organise this event every year.
Seonah Choi (MBA 2021) worked as a political adviser to a number of government ministers in New Zealand, including the Prime Minister, prior to studying at LBS. She experienced first-hand how cross-sector collaboration can drive positive, large-scale change. Seonah is an intern for the Wheeler Institute, contributing to the creation of content that amplifies the role of business in improving lives.