Africa: Getting down to business

The dust has settled, the security has left and the thousands have departed. Davos has returned to being a quaint Swiss skiing resort until next year.

Davos 2015 attracted highfliers and world leaders in a flurry of four days of hectic activity. Speakers as diverse as President Hollande, John Kerry, Jack Ma, and Will.i.am extolled their views on the state of the world today and where it is heading. Davos attendees listened intently and then questioned and debated the issues. Themes at the top of the discussion were global security, the sustainability of lower oil prices and how new technology and connectivity is changing society. The media had plenty to write about.

For those with an interest in Africa, there was a subtle but very meaningful shift at Davos this year. Previous years have seen more African content on the agenda: economists, politicians and academics all discussing the rise of Africa, African opportunities and African demographics. But this year, even with a lower attendance from African delegates, there was noticeably less hyperbole and more substance. Whether that is a result of those promoting the African opportunity finally being heard, the rise in recent oil and gas discoveries on the continent, Africa’s sheer agricultural potential or the turmoil in the world at large is unclear. What is apparent is that leading CEOs are now engaged with Africa, have understood and accepted the opportunities and are focusing on the implementation of their business strategies for the continent.

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The mood for Africa at Davos was ‘we understand the fundamentals’. Now it is about how much to invest, how to build and how to deliver. Africa has moved on from being appraised and dissected as a potential market to being one of actual investment and implementation. The focus has shifted towards developing long-term sustainable businesses. Big business is building capacity in Africa, and those that moved first, or have been committed to the continent long-term are well positioned. One delegate described it as such: ‘the Africa train has left the station, those that weren’t on it will find it hard to catch up’.

For many Davos attendees, the week started with an off-programme side debate, a CEO breakfast on Africa sponsored by Agility. The panel of speakers, led by Aliko Dangote and Bob Diamond – two of Africa’s most inspirational entrepreneurs – also included the CEOs of Oando, Nestlé, Agility and SABMiller. The debate started at 7:30 in the morning and although many delegates had only arrived late the previous evening, the interest in the panel discussion led to a standing-room-only situation, with many guests left queuing to get in.

One clear theme across the African agenda at Davos this year was the continuing challenges due to a lack of infrastructure; the essential element to make economies grow.

Gordon Brown, the ex-UK prime minister, and President Zuma demonstrated tangible progress on the World Economic Forum African Infrastructure initiative, where the focus was refreshingly on implementation and delivery rather than discussions about concepts and reports. Brown stressed that low global interest rates make it an ideal time for governments to promote PPP for infrastructure, as the low rates provide the opportunity for the private sector to structure long-term competitive funding for mega projects. Governments were encouraged to structure private sector initiatives whilst the low cost of funding remains available.

I recall meeting with President Zuma at Nkandla, his home village, before he was first elected in 2009 and one of the many topics discussed was the need for Africa to speak with one voice and become one trade block. He saw this as a prime objective for the continent. However, five years later, Africa has made little progress towards this.

Admittedly, there have been sporadic improvements. President Kagame explained to the Davos audience that with the development of trade corridors, the time taken to deliver a container from Mombasa on the Kenyan coast to Kigali, the capital of Rwanda, has fallen from 22 to 6 days. The East African Community (EAC), SADC, and ECOWAS are all focused on making interregional trade more fluid. But despite this, familiar themes continued to appear across every African debate at Davos: lack of regional trade, poor legal framework, the cost of logistics, bureaucracy, trade tariffs and poor infrastructure all remain lasting problems inhibiting economic growth.

Aliko Dangote explained that because of the archaic visa systems present in so many countries, it is easier for an American citizen to travel the continent to do business than it is for him.

The message from across the African debates in Davos was deafening: if Africa could speak with one policy and one voice, and if it could break down the barriers to interregional trade, this would stimulate significant economic benefits for the whole continent.

Nigeria is now the largest economy in Africa, a country that will have a population larger than the USA by 2050. Perhaps as the continent’s foremost economy, this milestone will provide fresh impetus for Africa to speak with one voice and become one unified trading block.

Geoffrey White