By Ashish J. Thakkar*
In the 17 years that I have been doing business in Africa, I have never experienced the kind of excitement and optimism around the continent that I am seeing today. Africa’s time has truly arrived. When I formed my company in Uganda in 1996, and started selling computer parts from Dubai, there were so many negative perceptions about Africa and getting credit was almost impossible, but today many global players have turned their attention to Africa, simply because the opportunities it presents can no longer be ignored.
Africa now has a $2trillion economy, with a third of our countries growing at 6% or more. We have 60% of the world’s arable land and we will soon have the world’s largest workforce. These statistics speak for themselves. So, where many investors have previously been reluctant to come to Africa to see what is happening here, now their eyes are opening up to the opportunities. The whole world is sitting up and paying attention because Africa will be the success story of the coming decades. What is most pleasing about this trend though, is that this time, we, the people of Africa stand to benefit.
Periods of sustained growth have been seen in Africa before, but in the past the beneficiaries were not always Africans themselves. This time, we have an opportunity to change that story, and personally this is what excites me most.
What our governments have seen in the wake of the 2008 global financial meltdown is that, in times of crisis, Foreign Direct Investment (FDI) on which we have always pinned our hopes, is always the first to flee. But what is interesting is that African investors tend to stay the course. I would not argue that FDI is not important, but I think that if 2008 taught us anything as a continent, it’s that we need to invest first and foremost in ourselves and in each other’s economies if we are going to achieve sustained growth.
Over and above this, the fundamental issue that will determine our success in the coming decade or so, will be the extent to which we create an enabling environment for our young entrepreneurs. This means planting the seeds for Africa to grow from within, and not to rely on help to come from outside sources. We must unleash Africa’s creative potential on the world.
All around us, everything is changing. The biggest companies in the world are now internet companies, which are connecting people in new and exciting ways and fundamentally changing the way we do business. What this means for Africa, is that we have the capacity, not only to catch-up but to leapfrog the rest of the world and get ahead. We have the benefit of not being constrained by legacy systems or outdated ways of doing things. We have a clean slate and we can use technology to tackle all of our challenges.
As an entrepreneur, I tend to see opportunities where other people see problems, and Africa is overflowing with opportunities: in every country and in every sector. But if our growth is going to be sustainable, then it must be driven by our youth, who form the bulk of our population. The more we invest in them and give them the tools to be innovative and to develop their own businesses, the more likely we are to find development solutions that are embedded in and are tailored for our communities.
To do this, I think that we need to invest at least as much in informal education as we do in formal education. That means that we must promote and facilitate mentorship, guidance, coaching and networking opportunities between those that have these skills and those that must still acquire them. When we do that, we are setting ourselves up for success. Unfortunately our formal education systems are not geared towards nurturing entrepreneurs and an aspiring young businessperson doesn’t really have anywhere to turn to get the knowledge they need to make their dreams a reality, and we all have a responsibility to change that.
Many of our governments have identified this important challenge and are taking the required steps to invest in young entrepreneurs, who are so crucial to a developing economy. We are seeing more and more ministries and departments within government that are focused exclusively on small and medium enterprise development, and this is a very encouraging sign. The more emphasis that we place on this sector and on creating an enabling environment for young entrepreneurs to feed into, the faster we will grow. Equally, the private sector must also play its part and we’re slowly seeing an emergence of ‘entrepreneur empowering’ initiatives. A good example of this is our own Mara Mentor platform – a mobile app designed to enable, empower and inspire young and women entrepreneurs in Africa by giving them access to experienced business leaders and opportunities to network amongst their peers.
I’m still amazed at the amount of people who look at Africa and all they see are infrastructure deficits and inefficiencies. I look at these as huge opportunities! And the approach that more and more of our governments are taking is that of making sure that they cut down on the red tape and enable those that are ready to take advantage of these opportunities.
There are many foreign companies that are seeing this but, they have a problem in that they don’t know how to go about doing business on the continent. Many fail, simply because they employ a cut-and-paste strategy. They do not realize that Africa is a very diverse continent with many different cultures, histories and regulatory systems and you have to be flexible and nuanced in how you approach it.
But again, this is where African businesses, particularly the smaller and newer ones, have a massive opportunity. They have the ability to partner with international players that have the industry expertise but lack the knowledge of local markets and systems, and to take advantage of the opportunity together. In my own experience, this has been a very successful formula that has allowed my company to grow into many countries.
Africa is open for business. For those that are willing to travel in Africa and to see for themselves. Yes, there are risks, like in any frontier market, but the returns are very high. Companies all over the world are aware of this fact and they have taken an interest. Like I always say, the Chinese dragon and the Indian tiger have had their time and now it is turn of the African lion.
*Ashish is Founder of the Mara Group and Mara Foundation