Pinning down a fast-moving target
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Pinning down a fast-moving target

Pinning down a fast-moving target

Africa analyst Dr Duncan Clarke, Nigerian business leader Tony Elumelu, economic commentator Greg Mills of the Brenthurst Foundation, South African publisher Khanyi Dhlomo and Africa branding expert Doug de Villiers all contribute to this very special book, each in their inimitable way. The book also includes insights on global companies such as GE, Coca-Cola, Actis, DuPont, Carlson Rezidor Hotel Group, Nando’s and Anglogold Ashanti and household names in Africa such as MTN, MultiChoice, UBA, Webber Wentzel, Imperial Logistics, TBWA, Liberty Properties, Seed Co, Wilderness Holdings and SacOil.

That is quite a roll call for any book, but author Dianna Games has pulled off the feat of drawing together these various strands to create a polemic that speaks of a new African reality – a reality that is optimistic, confident and progressive.

Games, a veteran business journalist and editor, has clearly built up a contact book that is second to none. Originally from Zimbabwe, she now lives in Johannesburg, South Africa and as well as writing and running her consultancy business, Africa@Work, is the chief executive of the South Africa-Nigeria Chamber of Commerce.

Talking to African Business in Johannesburg in February, Games suggested that this book is really the culmination of decades of travel around Africa and truly reflects the astonishing changes that have taken place in the continent.

Her focus is perhaps informed by living in South Africa, but she notes the sea change in attitudes South Africans have towards the rest of Africa, or at least Middle Africa – that region north of South Africa and south of the Sahara.

She recalled how, when she first started to report on events above the Limpopo, South African editors considered her work almost irrelevant. And she also noted how difficult it was to travel around the continent; how, on her first trip to Nigeria, she had to travel via Accra, Ghana. There were simply no direct flights from South Africa to Nigeria. Few in South Africa even believed anyone would want to travel to Nigeria in the first place.

Today, things are very different. Flights between Johannesburg and Lagos, operated by both South African Airways and Arik Air, are frequently full; and queues for visas at the High Commissions in both cities are usually lengthy. Games also notes the irony that there are now hordes of business advisors in South Africa offering consultancy services for South African investors interested in moving outside the rand zone.

“Just over a decade later,” the author writes in her preface, “the continent is a different place. The improvements in economic performance, ease of doing business, flights and accommodation options, communications and technology, provision of financial services and other aspects are a world away from what they were … .”

She goes on to explain just what this book is designed to do. “[It is] to give the reader a glimpse of the opportunities the continent offers – but also the challenges. It is tempting to focus on only the good news and there is plenty of it, but many challenges remain and these are as much a part of the African business story as the evident opportunities.”

This objective summary is followed by a glowing introduction from former Ghanaian president, John Kufuor and a foreword from Professor Mthuli Ncube, chief economist at the African Development Bank. We then get into the meat of the book, which begins with the author’s own chapter on Africa’s business landscape and a list of 20 useful tips on Doing Business in Africa. There follows a section that focuses on the economic landscape in which seven experts pen chapters describing various aspects of the current situation, how we arrived there and where Africa might expect to be going.

This writer found two of these chapters especially interesting: Dr Duncan Clarke’s scholarly analysis of Africa’s growth trajectory, and the report from the coal face of African investing by Tony Elemelu, chairman of Heirs Holdings.

Clarke delves into the work of Angus Maddison that attempted to establish the extent of past economic growth trends and cycles in Africa. Maddison estimated that when Rome commanded North Africa in 1AD Africa’s population was 17m. By 200AD it was 20m, and it took another 1,500 years to reach 46.6m.

He quotes Maddison as suggesting that at 1CE, annual per capita income was $472 (calculated in real 1990 US dollars, updated to 2010 values); by 1000CE it had fallen to $425. In 1500 it was even lower, at $414, showing that most of Africa went backwards for 1500 years – what Clarke describes as “a salutary lesson in the result of ultra-long cycle stagnation with chronic decline”.

Subsequent growth, Clarke notes, came about only with Africa’s engagement with the rest of the world. “Colonisation brought major capital investment,” Clarke writes. “This became Africa’s first real period of solid-run growth. Important institutions and technical advances from elsewhere transformed its economic destiny…” Furthermore, decolonisation saw GDP growth to $1,181 by 1965, $1,335 in 1970, and $1,515 in 1980. Clarke notes that today “bullish story lines have gained traction worldwide,” with claims that “the African giant, once sleeping and bedevilled by nightmares, is stirring”.

Clarke goes on to give first prize for bullish optimism to Renaissance Capital’s mid- 2011 report – Africa: The bottom billion becomes the fastest billion. But in his view, “significant constraints lie in Africa’s future. They include its antiquated economic paradigm, restrained net capital accumulation and investment deficits in industries and infrastructure”. He concludes that, realistically, we must acknowledge that “a relapse from growth paths has been Africa’s albatross before. Measured images of Africa’s future should not discount the past and present in the continent’s future economic evolution”.

If that sounds a dismal prognosis, there is still plenty of exuberant optimism further into the book to balance Clarke’s thoughts, not least in the chapter by Tony Elumelu, ‘Building African Entrepreneurs’. Elumelu posits that the continent is ripe for the entry of global businesses that are clamouring for the opportunities presented by millions of new consumers with diverse needs, but he observes that “the African private sector is waking up to the fact that Africans themselves should be building businesses and developing the continent”. Elemelu is a fascinating character. He is a former banker who, prior to his retirement in July 2010, was the group chief executive of United Bank for Africa (UBA) headquartered in Nigeria and built up one of the largest banking groups in the country. Since resigning from this position, he has launched the not-for-profit Tony Elumelu Foundation and established Heirs Holdings, a proprietary investment company. He also chairs Transcorp.

By a happy coincidence, this writer had the opportunity to interview Elumelu just days before writing this review. He explained to me his philosophy of ‘Africapitalism’ that, as he outlines in this book “calls for the African private sector’s commitment to economic transformation through investments that generate economic and social wealth”.

There’s little in the book about his activities, but he told me how he is putting his money where his mouth is. He detailed some of his company’s investments, in some cases allied with his Foundation’s funds. They include a new agricultural commodities exchange in Kigali, Rwanda; the Ughelli power plant in Nigeria; the Mtanga Farms in southern Tanzania; and how an exclusive group of MBA students from leading business schools in Ghana, Kenya, Nigeria, South Africa, the US and Europe are to be selected to work with The Tony Elumelu Foundation as associates with fast-growing African enterprises.

Corporate insights

The later section of the book contains 17 ‘corporate insights’, which are drawn from 17 different economic sectors, and gives an indication of just how vibrant is Africa’s economic landscape. Naturally it is weighted towards (but not overly so) South African enterprises, yet practically all of them have pan-African interests – such as DuPont, the Coca-Cola Foundation, Nando’s, MTN et al. As for the Brand Africa concept, that is dealt with in this book’s first section that lays out opinions on Africa’s economic landscape, in a chapter by Doug de Villiers, the chief executive of Interbrand Sampson, titled ‘The Making of the African Brand’. This contribution contains a number of observations on the importance of the international perception of Africa in keeping the economic growth momentum up to speed.

However, events seem to have overtaken some of De Villiers’ assertions. South Africa, still Africa’s biggest economy (but being challenged by Nigeria), is described by him as having the most “positive continental brand asset in Africa”.

Whether this is still the case post the Marikana tragedy, the Malema imbroglio – or even, arguably, the death of Olympic athlete Oscar Pistorius’s girlfriend – must now be open to question. But at least De Villiers has the good sense to observe how “political activities and statements that reflect badly on the country’s ability to manage itself and progress, and the regular reports about corruption, for example, may quickly erode the image of the country, and therefore its brand”.

Despite South Africa’s undoubted economic strength, it is evident that, as much of the continent continues to make economic progress at almost breakneck speed, the South African fiscus is clearly a laggard – posting less than an annual 3%  GDP growth rate. That makes it possible that a twin-track continental economic trajectory is emerging. Games has tried, and largely succeeded, in pinning down what is a fast moving target and this book provides a useful snapshot of Africa I 2013. It will be interesting to reread it in five, 10 or 20 years’ time.

Stephen Willi

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Written by African Business Magazine

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