Editor’s note: This is a recap of the 2016 Wharton in Africa Business Forum. If you’re interested in attending the 2017 event Nov 3-5, visit: http://wabf2017.whartonafrica.com.
“I am not African because I was born in Africa but because Africa was born in me.” – First Prime Minister and President of Ghana, Kwame Nkrumah
Africa has been painted with a negative perception by many, which has created a distorted, one-dimensional view by individuals in the West. In multiple scenarios, members of the African diaspora sometimes partake in this deception, telling narratives that catapult negative stereotypes and in turn, harm the growth of the continent.
Africa has been perceived through a prism of disease, starvation, corruption, poverty, and war. Author Chimamanda Adichie coined this “a single story.” Even after the celebration of more than 50 years of independence in most African countries, the manacles of ignorance and the portrayal of the media still sadly cripple the continent in the perspectives of many.
For myself, pursuing a westernized education was a driving force in shaping my identity as an African. It provided me with a macroscopic view of the continent and propelled me to comprehend the bottlenecks faced by generational leaders.
There is a popular word in Ghana called Sankofa, which loosely translates to “go back and get it.” Growing up, I never understood the potency of the word, but as I look back today, this word alone has imbued in my ethos a reasoning to not look past Africa as the ultimate destination to grow, harvest, and sell my crops.
This past weekend at the annual Wharton Africa Business Forum, the agenda was to explore the diverse business opportunities that lie in the intersection of the public, private, and social sectors across Africa. Throughout the conference, professionals exchanged ideas, pitched initiatives, and expressed both their excitement and frustration about the state of the continent. It was both awakening and inspiring.
As Richard Branson said, “Finding something frustrating and seeing an opportunity to make it better is what entrepreneurship is all about.” Based on Branson’s quote, it could be argued that almost every attendee present embodied an entrepreneurial drive and possessed a burning flame in their hearts to make a difference on the continent. However, the apparent roadblock seemed to be “How, when, and why do I even begin?”
The first keynote speaker, Ambassador Herman Cohen, President and CEO at Cohen and Woods International and Consultant on Africa at ContourGlobal, advised attendees to look at Africa as an investment destination as opposed to a humanitarian destination.
In her book – Dead Aid – Dr. Dambisa Moyo echoes this statement by making the case that overreliance on aid has stagnated the growth of developing nations by leaving these countries in poverty, leaving their leaders more dependent on aid, and funneling corruption.
According to the World Bank, there is a trillion dollars of African money not sitting in Africa. For this money to circulate the continent, it’s imperative members of the African diaspora put an end to exporting commodities and importing foreign goods. To fill the missing components in the enigma, Ambassador Cohen highlights the lack of technological advances and storage as the problem. For example, 40% of African food goes to waste due to lack of storage and innovative technologies to catapult its longevity.
Leading thinkers, such as Sangu Delle, have created more sustainable ways of growing the continent and produced more jobs through local investments. By investing in the agro processing company Stawi, the company has leveraged economies of scale to create value for people on the African continent. Stawi – like most successful businesses – was born out of frustration.
The founder, Eric Muthomi, noticed the over 400,000 banana farmers in Kenya who produced too many bananas, which eventually went to rot. He then decided to take the bananas and make banana based gluten-free flour and baby food. Today, Stawi foods are sold throughout the Kenyan market. But this is just one success story.
One third of food, beverages, and similar processed goods consumed in Africa is imported. This goes to show a plethora of problems go unsolved on the continent every single day, which creates an opportunity for working members of the African diaspora to play an integral role in enhancing the growth of the continent.
In most African countries, there has been a recent influx of foreigners – particularly from Asia – who gradually invest in the abundance of resources such as infrastructure and agriculture. Unfortunately, most Africans on the continent are unable to take part in their endeavors because of their limited knowledge and experiences in comparison to their Asian counterparts. Foreign investors have compensated for this disparity by bringing thousands of their own laborers and businessmen; this group represents a new face of globalization.
While foreigners are able to benefit from these emerging industries, members of the African diaspora still remain disadvantaged, with only 10% of trade occurring among Africans. However, on the fortunate end, independent court systems have been established to operate fairly in a number of African countries. Regional groups, such as The Economic Community of West African States (ECOWAS), have also made it simpler for Africans to trade among themselves.
All these practices contribute to making it simpler for commerce to exist between African nations, thus making it increasingly difficult for foreigners to sell cheaper to Africans. As Ambassador Cohen added,
“The key is not Foreign Direct Investment, the key is African Investment.”
Often times, the misfits, the rebels, the troublemakers, the round pegs in the square holes may have the resources, skill-sets, determination, and commitment to succeed however; the missing ingredient boils down to capital. Keynote speaker Sacha Poignonnec, Co-Founder & Co-CEO of Jumia, shares that finding the money to execute on an idea is not the hardest part of investing in Africa, the challenge is finding the right investors to hold the rope tight as you climb mountains.
Simply put, the worst thing an entrepreneur can do is to train an unseasoned investor about the continent. Poignonnec proposed for entrepreneurs to do their due diligence before committing to any capital, no matter the scenario. To emphasize this point, Iyinoluwa Aboyeji, Co-Founder of Andela and Flutterwave, believes that positioning yourself in the right circle makes funding inevitable. He added that investors are averse to risk-taking and unless an entrepreneur has the right track record or a Co-Founder with the experience to complement her skill-set, it is best not to approach an investor right away.
Different experts have varying opinions on the subject however; funding is not the most important hurdle. Poignonnec advised participants to have an idea that is relevant to the people. Often times, entrepreneurs looking to invest fail to conduct a thorough market research on the ground prior to execution. Having so much belief in an idea to the point where you fail to fully comprehend the problem is a setback for many.
Joe Gebbia, Co-founder of Airbnb, proposes “Enlightened Empathy” as the solution to this. According to Gebbia, “Enlightened Empathy is the process of seeing the world so closely in the shoes of the person you are creating for to the point where you see the world the way that they see it and you bring those insights back to the drawing board, combine it with your own design point of view, to create something new.” When channeling your ideas to fruition, Poignonnec encourages participants to strengthen the intersection between three things; talent, brain, and heart. Aboyeji, on the other hand, proposes that it’s best to burn bridges. He believes for an entrepreneur to have one leg in and another out will most likely result in two of many things: cash burn on flights and dwindling profits.
Fred Swaniker, Founder & CEO of the African Leadership Academy, also offered his perspective on the conversation. His formula is simple; pay early employees less than the salary received from their past occupations. This is the mark of true commitment. The recent trend of moving back to Africa has been closely associated with obligation. Swaniker challenges members of the African diaspora to move back not as a sense of obligation, but because it’s an opportunity of our lifetime. He also added,
“We, as black people, will never be fully respected until we have economic power. The reality is this happens in Africa.”
As you look into strengthening the economic pillars of Africa, a few of many sectors to consider include Agriculture, Power, and Payments. Today, approximately 60% of the African population is in the agricultural sector. However, the most talented individuals are leaning towards more conventional sectors for the sake of prestige. Although agriculture has been perceived through a dark lens for many years, the problem is the definition.
Agriculture is more than planting and cultivating, it is every little thing we touch. This includes the clothes we wear, the cars we drive, the cement used in building our homes, et al. Power, on the other hand, has recently tickled the fancy of well-read African Millennials. However, there is still potential for growth because 5-10% of annual sales on the continent are lost from electricity outages in Angola, Egypt, and Nigeria. An increase in talents and investments are definitely needed in this sector to fuel enterprises to amass on the continent. As the continent grows and as power plants and innovative renewable energy products are prioritized, manufacturing of local goods will be prevalent.
As highlighted in “Lions on the move II,” McKinsey Global Institute’s widely acknowledged report on Africa’s economic prospects, anywhere between 6 million to 14 million stable jobs could be created through increased manufacturing output. In addition to that, there will be a $326 billion increase in annual revenue by 2025 possible for African manufacturers targeting domestic markets. To make trade between villages, cities, and countries as seamless as possible, Payments will play an integral role. Incredibly intelligent members of the African diaspora are creating some of the most powerful APIs to enable local vendors to accept payments, build, and scale their businesses across the continent. It is no wonder six of the fastest growing economies are currently in Sub- Saharan Africa.
“Lions on the move II” discusses that the continent will profit from rising global demand for natural resources; boast a consumer market of 128 million households by 2020; and see its labour force top 1 billion people by 2040. In addition to this analysis, it is important to keep in mind that investors love transformation. They want to get into spaces that are going through a major transformation from being seemingly horrible to being very powerful. Sankofa. But before that, ponder and you may realize the opportunity you may be overlooking.
Jephthah Acheampong is an Entrepreneur, Writer, and Storyteller based in New York. Equipped with a background in Economics, Jephthah writes as a millennial voice on social justice, women equality, and education. He currently serves as Director of Sales & Marketing at Esusu. Jephthah also founded Anansi Global, a non profit empowering youth in Ghana by providing quality education and mentorship.
View his work at www.jacheampong.com or find him on Linkedin.
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