Africa Business Communities

Glenn Davies: Hopeless Africa

“Hopeless Africa”

This was the bold heading of an article released in May of 2000 by ‘The Economist’.

The letter told of “floods in Mozambique; threats of famine in Ethiopia (again); mass murder in Uganda; the implosion of Sierra Leone; and a string of wars across the continent.” It went on to say that the new millennium has brought more disaster than hope to Africa.

Approximately 15 years ago Mozambique and Madagascar were deluged by floods, famine had started to reappear in Ethiopia, Zimbabwe has succumbed to government-sponsored thuggery, and poverty and pestilence continue unabated. More seriously, wars were raging from north to south and east to west; And brutality, despotism and corruption existed everywhere.

Africa was once dismissed by some as the “hopeless continent.”

Boy were they wrong …

I think it’s fair to say that the time for being pessimistic about Africa is long gone. If ‘The Economist’ were to write an article today about Africa it would look very different, and in fact, most believe Africa is now the land of promise, of immense opportunity - the next economic super power.

Africa is one of the most exciting success stories the world has seen. It is now globally recognized as the place to be if you want to become the ‘next big thing’. The motherland has taken the limelight from Asia in this regard, and is now the region to watch, to invest in, and to prosper.

So could Africa really be the next Asia?

This may appear to be too great an ambition, but considering the success of countries like Ghana which continues to post record growth, Nigeria & Kenya now ranked in the top 20 fastest global economies, and countries like Ethiopia, Rwanda, Tanzania and Uganda in economic boom - there’s now real hope for Africa. Rwandan President Paul Kagame, recently said he hopes to eventually transform his country’s economy into the “Singapore of Central Africa.”

If we take a close look at Asia’s growth over the last 5 decades, it’s had the rise of the Asian Tigers like Taiwan, South Korea, Hong Kong and Singapore. Japan has experienced economic prosperity, China is the world’s 2nd largest economy and now all eyes are on India to take the number 1 spot in the not too distant future. Just think about how these countries’ growth has already changed the world and will continue to change it. And yet year after year, and looking into the future, Africa is forecast to grow even more than Asia combined over the past century.

But if Africa is to learn from Asia’s explosive success, then the focus must be on developing strong foundations to ensure stability for the Africa millennia. However, fixing structural deficiencies, failing patronage and other corrupt practices is not going to be a simple task; the World Bank estimates that 1,000 billion dollars every year globally is going to various forms of bribery. In fact, corruption is identified as the top impediment to conducting business in 22 out of 144 economies.

So what’s driving the Africa boom?

The continent is incredibly resource rich, but even though this has certainly helped, some suggest that it is industry such as wholesale and retail commerce, transportation, telecommunications, and manufacturing that are the real drivers of Africa’s growth. Africa also has large reserves of natural gas and near endless amounts of solar energy, which is both renewable and environmentally friendly and does not require large investments in electricity grids.

Furthermore, many of the world’s largest brands are rapidly moving into Africa and investing in its growth. Let’s not forget US giant Walmart’s $2.4 billion takeover of Massmart, one of that country's largest retailers. IBM has opened offices in more than 2 dozen African countries, and some of the world’s biggest private suppliers of electricity have become majority owners and operators across the continent. In Ghana, there are large international data processing companies employing thousands of people. And across Africa, Google is investing significantly in web infrastructure and launching search pages in a growing number of African languages.

So as we reflect back now on that famous article in May 2000 that not only claimed Africa as the lost continent, but backed it up with alarming facts and data, it’s incredible to now see just how far the dark continent has come, and what the future holds for Africa.

And perhaps Africa will follow in Asia’s footsteps in many ways? After all, Asia has certainly become an enviable platform to mirror. It has prospered after years of colonialism, savage wars, wide spread poverty and deep-rooted corruption. It’s in no way perfect, however it has accepted it failings and continues to strive forward.

So as our friends at the ‘The Economist’ so eloquently put it 15 years ago, “Those who think Africa is self-destructing must accept that its failings are not unique. There is tribalism in Bosnia and Ireland, dictatorship in North Korea, corruption almost everywhere. In short, Africa's troubles are not exclusive to Africa. But their combination is.”

Here’s to an Africa with hope.

Glenn Davies is Group CEO of Inigmah

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