“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” — Winston S. Churchill
In terms of economic development and prosperity, Africa has its share of challenges, yet the continent stands ahead of the pack for the sheer size and scale of the opportunity that lies ahead. A number of significant success stories have already taken place, led by an emerging and returning class of executive talent.
The upside and potential that Africa represents is often misunderstood, overlooked, or both. The biggest challenges that the continent faces also represent the biggest opportunities
The challenges
Despite being the second most populous continent behind Asia, Africa’s 54 countries lag considerably across a wide range of economic growth metrics. According to the International Monetary Fund, the region accounts for just 2.84% of the world’s GDP in nominal terms and is the second smallest continental economy in the world after Oceania.
Its GDP on a per capita basis is the worst of any continent (Oceania’s is 29 times larger, North America’s 28 times larger, and Europe’s is 16 times larger). On a purchasing power parity basis, Africa is the third smallest continental economy after Oceania and South America, accounting for just 4.97% of global wealth.
Key socio-economic challenges include the region’s poverty, unemployment, infrastructural underdevelopment and political instability. Poor access to health services and education is also commonplace, and gender inequality is widespread throughout the continent.
These challenges are complex and interconnected, with no easy solution to any of them. However, there are many organizations and by association, many African executives working to address these issues and improve the lives of the African populace.
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The opportunities
The upside and potential that Africa represents are often misunderstood, overlooked, or both. The biggest challenges that the continent faces also represent the biggest opportunities. Africa represents an inordinately massive opportunity in a number of areas, including private equity and venture capital (VC), consumer goods, agriculture and agritech, clean tech, fintech, payments, e-commerce, life sciences and MedTech, as well as ICT (particularly with regards to data centres).
Demographically, the numbers don’t lie: 17 of the 20 countries with the highest population growth are in Africa. The continent has the youngest population by far with a median age of just 18.8 years (Europe’s median age is more than double this, at 44.4 years, and North America is not much younger, at 38.4).
What do these numbers mean? In essence, Africa’s population of 1.4 billion is growing rapidly (set to be 4 billion by 2100), extremely young, and increasingly urban – the perfect burgeoning consumer demographic for a range of new businesses.
New ventures that will be of particular value include digitalized services and products that save time and transcend distance. Internet access is improving rapidly, with more affordable and higher-speed plans, the thriving startup ecosystem is transforming how Africans consume, buy and pay for things, and the region has a commitment to developing the world’s largest single market, called the African Continental Free Trade Area.
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It could be argued that rather than an agrarian or industrial revolution, a tech revolution will transform the fortunes of the African populace. Arguably, that new epoch is already happening, led by payment innovation, which has been a key growth driver for Africa. 67% of all mobile money volume transacted worldwide is from Africa; the next best region is South Asia, at just 15%.
Africa is also still at the very early stages of e-commerce – only 12% of Africans have made an online purchase. “The African internet economy is one of the largest overlooked investment opportunities of the past decade, with potential for profound impact on development,” said a recent International Finance Corporation and Google report on the subject.
An increasing amount of investment growth continues to come from offshore, particularly in the US and Europe. In the VC space, they will be particularly attracted by the differentiated exposure that Africa presents, and if big international pension funds start investing, even in the form of 1-2% of their balance sheets, things could ramp up extremely quickly.
From an executive talent perspective, NGS Global has collaborated with a spread of clients who have hired key executives across the Sub-Saharan Africa region indicating a considerable transformation for leadership across the continent, headlined by a few key trends in African executive talent.
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● The rise of the African executive: There is a growing pool of talented African executives who are taking on leadership roles in businesses and organizations across the continent. These executives are bringing a unique perspective and set of skills to the table, and they are helping to drive Africa’s economic growth and development. There is also a strong drive by clients to hire local executive talent where they had previously hired expats – hiring Africans for African jobs.
● The brain drain is reversing: In the past, many talented African executives left the continent to pursue opportunities, mainly in Europe and North America. However, the brain drain is now reversing, as an increasing number of diaspora executives are returning to Africa to lead businesses and organizations. This is being driven by a number of factors, including the continent’s growing economy, the increasing opportunities for women in business, and the improving quality of life in many African countries. It must be noted that whilst this trend is not currently the case in South Africa, it is occurring in many of the other prominent sub-Saharan African countries.
● The importance of diversity and inclusion: Businesses and organizations in Africa are increasingly recognizing the importance of diversity and inclusion in their executive ranks. This is because a diverse workforce can bring a wider range of perspectives and ideas to the table, which can lead to better decision-making and innovation.
● The use of technology: Technology is playing an increasingly important role in the recruitment and retention of executive talent in Africa. Businesses and organizations are using technology to source candidates, assess skills, and track employee engagement.
● The need for training and development: African businesses and organizations are increasingly investing in training and development programs for their executives. This is because they recognize that the skills and knowledge required to be an effective executive are constantly evolving.
These are just some of the major trends in executive talent in Africa. The continent is undergoing rapid economic and social change, and these changes are having a significant impact on the demand for and supply of executive talent. Businesses and organizations in Africa that are able to adapt to these changes will be well-positioned to succeed in the years to come.
Veitch is managing partner, Africa, NGS GLOBAL, an executive search and leadership services company
