The Next Africa: An Emerging Continent Becomes a Global Powerhouse
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The Next Africa: An Emerging Continent Becomes a Global Powerhouse
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Overview
The Next Africa, an Axiom Best Business Book Award winner, will change the way people think about the continent. The old narrative of an Africa disconnected from the global economy, depicted by conflict or corruption, and heavily dependent on outside donors is fading. A wave of transformation driven by business, modernization, and a new cadre of remarkably talented Africans is thrusting the continent from the world's margins to the global mainstream.
In the coming decades the magnitude of Africa's markets and rising influence of its people will intersect with other key trends to shape a new era, one in which Africa's progress finally overshadows its challenges, transforming an emerging continent into a global powerhouse. The Next Africa captures this story.
Authors Jake Bright and Aubrey Hruby pair their collective decades of Africa experience with several years of direct research and interviews. Packed with profiles; personal stories, research and analysis, The Next Africa is a paradigm-shifting guide to the events, trends, and people reshaping Africa's relationship to the world.
Bright and Hruby detail the cross-cutting trends prompting Silicon Valley venture capital funds and firms like GE, IBM, and Proctor & Gamble to make major investments in African economies, while describing how Africans are stimulating Milan runways, Hollywood studios, and London pop charts.
The Next Africa introduces readers to the continent's burgeoning technology movement, rising entrepreneurs, groundbreaking philanthropists, and cultural innovators making an impact in music, fashion, and film. Bright and Hruby also connect Africa's transformation to its contemporary immigrant diaspora, illustrating how this increasingly affluent group will serve as the thread that pulls the continent's success together.
Finally, The Next Africa suggests a fresh framework for global citizens, public policy-makers, and CEOs to approach Africa. It will no longer be "The Hopeless Continent", nor will it become an overnight utopia. Bright and Hruby offer a more nuanced, net-sum, and data-rich approach to analyzing an increasingly complex continent, reconciling its continued challenges with rapid progress.
The Next Africa describes a future of a more globally-connected Africa where its leaders and citizens wield significant economic, cultural, and political power--a future in which Americans will be more likely to own African stocks, work for companies doing business in Africa, buy African hits from iTunes, see Nigerian actors win Oscars, and learn new African names connected to tech moguls and billionaires.
Product Details
| ISBN-13: | 9781466868724 |
|---|---|
| Publisher: | St. Martin's Publishing Group |
| Publication date: | 06/04/2024 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 304 |
| Sales rank: | 482,656 |
| File size: | 1 MB |
About the Author
JAKE BRIGHT is a writer, consultant, and Whitehead Fellow of the Foreign Policy Association focusing on global finance, business, and Africa's transformation. He contributes as an editor and independently for publications including Fortune, The Financial TimesThis Is Africa, Bloomberg LP, and U.S. News & World Report. Bright speaks frequently on international business topics in media and thought leadership forums.
AUBREY HRUBY is an advisor to investors and companies doing business in Africa. In her decade of working across 20 plus African countries as the former Managing Director of the Whitaker Group and through her own companies, she helped to facilitate over $2 billion in investment and capital to the region. She is a Fellow at the Atlantic Council's Africa Center and speaks regularly on African business issues.
Read an Excerpt
The Next Africa
An Emerging Continent Becomes a Global Powerhouse
By Jake Bright, Aubrey Hruby
St. Martin's Press
Copyright © 2015 Jake Bright and Aubrey HrubyAll rights reserved.
ISBN: 978-1-4668-6872-4
CHAPTER 1
Africa's Growth: Booming Commerce Becomes a Continent's Catalyst
In January 2014, 27-year-old Nigerian Obi Uche attended a two-day General Electric (GE) project management training in Lagos. Uche had recently been hired by Weltek Limited, a local engineering company selected to fabricate power-generation equipment for GE's new manufacturing facility in Calabar in southeastern Nigeria. Once up and running, the Calabar plant will produce critical components — turbines, wellheads, compressors — for GE's core infrastructure in Nigeria. The training was the first of several for Uche, preparing him to liaise as a business development officer between Weltek and the U.S. conglomerate. "Working with GE is a big deal. The professional expertise I am gaining is a boost of confidence to my career," said Uche, who finished his MBA in 2013 and now supervises a small team.
The skills exchanged between GE and Weltek have not been limited to midlevel employees. In August 2014, GE hosted Uche's manager, Chuck Umeh, and Weltek CEO Pedro Egbe at a three-day workshop in Italy. There they fine-tuned Calabar design plans and production standards with GE technicians.
Weltek CEO Pedro Egbe expects "the Calabar collaboration will raise our standards and allow us to bid for more business and hire more workers." He anticipates the deal will create $5 million a year in revenue and double the company's staff of 50. "We are interviewing candidates across Nigeria — fabricators, engineers, welders. Obi will supervise a number of them, who will also go through GE training," confirmed Chuck Umeh. A father of three, Umeh's been with Weltek since 1991 and has a photo of himself and GE CEO Jeff Immelt hanging in his office. They met at a dinner in Abuja in 2014 to sign the memorandum of understanding between the two companies. "It's exciting. Nigeria has 170 million people who need the things GE makes, like turbines, locomotives, and medical technology," said Umeh.
In a country with double-digit joblessness, daily power outages, an average life expectancy of 52, and whose citizens coined the hashtag #MyRoadIsWorseThanYours to share photos of the country's worst highways, GE's capabilities have been welcomed. The company's Nigeria CEO Lazarus Angbazo expects "the Calabar initiative will create 2,300 jobs," supplying the equipment and expertise "to upgrade Nigeria's power, roads, and healthcare system." It's part of a broader aim "to make Nigeria a center for GE technology and expertise; an export center for talent and skills, and a model for GE's commitment to Africa," said Angbazo. "GE goes where the growth is," he added, noting the company operates in 25 Sub-Saharan African (SSA) countries, with plans to expand to more.
The benefits of GE's Nigeria manufacturing hub will extend to the direct parties and broader Africa. For GE, the billion-dollar Calabar investment establishes a production facility to support its business expansion in Nigeria and across the continent. For the young professional Obi Uche, Weltek, and Nigeria, the project creates skills transfer, upward mobility, and vital jobs. From Nigeria to greater Africa, GE-Calabar will bring electricity, improved health, and new bridges, roads, and trains to millions.
Before the company's recent moves in Africa, many pieces of a larger economic puzzle were aligning. There were several links in a chain of events that brought such job-creating partnerships to a country like Nigeria. One is found four years earlier in the vision expressed by GE's CEO, Jeffrey Immelt.
Revenue in Africa, Recovery in Rest of the World
While opening the April 2011 Council on Foreign Relations Corporate Conference in New York, Immelt surprised many with a comment that was definitely off the beaten path for the typical CEO-speak of the preceding years. "We see Africa as one of GE's top growth regions moving into the coming decades," he told then-CNBC anchor Maria Bartiromo before a packed auditorium of business and policy leaders. What was particularly salient about Immelt's statement was that the session's theme had nothing to do with Africa. Neither did the question that prompted his remarks. Previously, blue-chip corporate leaders at Jeff Immelt's level had rarely made references to Africa — if at all.
At the time we had already begun sourcing info supporting our premonition that the continent was about to come online strongly in global business. Sitting in the audience that evening, I (Jake), remember thinking, "Wow, one of the most powerful CEOs in the world just named Africa a top strategic priority," and I quickly shared the news with Aubrey.
Immelt's statement would become often referenced in escalating buzz about Africa in business circles starting in the early 2010s. Contributing to the buzz were ripples of data emerging from the continent on Africa's economic growth. These numbers, which first influenced murmurs in think tanks and esoteric policy circles, would eventually reach corporate boardrooms, investment seminars, and CEOs such as Jeff Immelt — creating a roar of opportunity around Africa's rapidly expanding economies.
To better understand the weight of the growth stats that began to emanate from Africa, it helps to have some context. First, there's the centrality of economic growth to business, juxtaposed to the general dissociation of Africa to global commerce that existed at the time, as illustrated in Figure 1.1. Then there's the broader milieu of the early 2010s, a low-growth world still reeling and deleveraging from the Great Recession.
When it comes to global business gauges, strong economic growth is where every country wants the needle. Summarized by gross domestic product (GDP), growth is the central measure of whether the core parts that make up an economy (consumption, investment, government spending, and global trade) expanded or contracted over a set period. GDP growth serves as a dial for investors, CEOs, and stock markets around the world. It reflects and influences massive movements of commercial activity — things like executive decisions on which countries to expand into and investor determinations on which stocks or bonds to buy, hold, or sell. GDP growth is also closely correlated to the capacity of local and national governments, as it determines how much tax revenue is available based on corporate and personal income. Low growth equals lower tax revenues and less revenue to play with. Higher growth puts more money in public coffers that governments can spend on services and infrastructure — which also spreads more demand around in an economy. Because of this impact, GDP forecasts and results are among the most anticipated economic information released — the stuff that makes international business media interrupt news to cover updated growth estimates by bodies such as the U.S. Federal Reserve or the Chinese central bank.
While GDP forecasts are firmly tied to global business, neither had been strongly associated with Africa the 15 to 20 years prior to 2010. Much of the post–Cold War wave that became the globalization of business, technology, and finance passed by large parts of Africa. In many commercial respects (global trade, securities markets, or digital commerce), the continent was more disconnected than any other. And these facts, added to roughly 40 years of consistently negative media coverage, certainly translated unfavorably to commercial agendas and perceptions toward Africa.
For those tracts of Washington focused on international business, Africa was largely a backwater during the early years that I (Aubrey) spent around the U.S. capital working to drum up commercial interest in the region. In many ways, given the Whitaker Group's rare focus on African markets, being a big fish in a small pond was beneficial. Yet in other ways, working as an African business specialist in the 2000s' Beltway occasionally felt akin to being D.C.'s lonely Maytag repairman, my phone ringing much less than those of market advisers focused on Asia, Eastern Europe, or Latin America.
When I told people that I worked to help companies do business in Africa, the business part often went in one ear and out the other. Most responded by asking if I worked for an NGO, the Peace Corps, or USAID, the development assistance arm of the U.S. government. When explaining that I managed a for-profit consulting firm that had never done business with the aid community, I might as well have been saying that I came from a planet a little beyond Jupiter.
In late 2010 and early 2011, one publication and a short article on Africa would begin to shift many of these conversations, arousing serious attention at the highest levels in international business circles. The first was global strategy consulting firm McKinsey Company's bullish "Lions on the Move" report, which emphasized that Africa's 2008 GDP of $1.6 trillion equaled that of Brazil or Russia. McKinsey projected Africa's collective economic output to rise to $2.6 trillion by 2020. Then, in January 2011, The Economist published a widely circulated feature showing that Africa had 6 of the 10 fastest-growing economies in the world over the decade to 2010, forecasting that the continent would produce 7 of the 10 top economies forward to 2015. The Economist included a compelling graphic that started popping up in business blogs and PowerPoint presentations showing a table with Angola ahead of China as the world's fastest-growing economy from 2001 to 2010 and Africa's expected economic output surging past the entire Asian region.
The McKinsey "Africa report," to which it became commonly referred, aroused further interest by debunking a common knee-jerk conclusion among economists: that Africa's growth surge must be isolated to the 2000s' commodities boom. If true, this would dismiss the continent's GDP performance as an oil- and minerals-driven fluke, rather than coming from any forceful economic changes. McKinsey confirmed that while commodity price increases certainly played a significant role in Africa's growth in the 2000s (around 32 percent), the continent's economic expansion was more than a cyclical resource boom: "Two-thirds [of Africa's GDP growth] came from other sectors, including wholesale and retail, transportation, telecommunications, and manufacturing." This piqued the interest of the business community even more.
Suddenly there was economic diversity to Africa's newfound growth. To global business executives coming off the Great Recession, this translated to profit opportunities in fresh markets in an otherwise income-flat world. And of all regions, it was where most expected it least, Africa. New associations were beginning in the mainstream media. In 2010, as the IMF characterized the world's major economies by "recovery," McKinsey, an elite source for cutting-edge business trends, was equating Africa with "revenue."
For me (Aubrey), "The Lions on the Move" report was a welcome validation of all that I had been observing in my work in African countries. It also caught my (Jake's) attention. I had started to pick up on Africa's new business momentum beginning in 2007, on the first of several trips back to post-war Sierra Leone and traveling in West and East Africa. Business opportunities and economic expansion came up in just about every conversation with friends, government officials, and local media. In Accra, Ghana, and Freetown, Sierra Leone, shiny new Nigerian and Pan-African bank branches had sprouted up in finance rows throughout each city. In 2009 in Nairobi, I saw the recently built offices of multi-national companies, while construction equipment lined the horizon, building Kenya's eight-lane Thika Super Highway.
The McKinsey report was forwarded to me (Aubrey) dozens of times by friends and associates, all expressing surprise, as if it were the first time they had heard of Africa in a business context, even though I'd been raising the topic for years. Suddenly my phone began ringing more often. The group of doubters who previously asked why they should do business in Africa was becoming a growing chorus of individuals inquiring how they could do business in African markets.
For the broader audience in the United States and beyond, the 2010 McKinsey and 2011 Economist Africa growth reports marked a critical juncture in the launching of new conversations about Africa. From Davos to Hong Kong, factoids, buzzwords, and taglines from each report began to pop up in just about every major speech, panel discussion, and article on Africa. New data and analysis continued to follow. Soon, it seemed, all the major global strategy consulting firms (Accenture, Ernst and Young, the Boston Consulting Group et al) were lining up to do their own reports on some component of Africa's emerging growth story. All this continued to enter the mainstream business sphere, which was evident when we both attended a 2011 New York Stock Exchange Africa investor conference. Speakers paired references to McKinsey's first report to allusions of the continent as the "new Asia" or of its young tech movement producing "the next Google." New York's corporate establishment heard forward-looking outlooks by African presidents, Wall Street analysts, and representatives of the continent's 29 stock exchanges. Much was made of the expanding power of the continent's consumer class. Africa's emerging growth story was rapidly putting it on the map for something very different than war, poverty, or a celebrity charity. And those tuning in with interest were the world's top business leaders, such as GE's CEO, Jeff Immelt.
A Primer on Africa
Before expanding on drivers of Africa's 21st century growth surge, some demographic and historical orientation is needed. Economies are driven by many things, namely, nations, geography, people, and events. As a landmass, Africa and Sub-Saharan Africa (the continent south of the Sahara Desert and the primary focus of this book) is massive.
Some reminders of this were required during the 2014 Ebola crisis, which was largely contained to three small West African countries, but extrapolated by some to the entire continent. When speaking on Bloomberg News during the crisis, we noted a conversation between two financiers, a private equity manager traveling to Nairobi and a banker cautioning him not to. The private equity manager pointed out that the distance between Ebola-free Kenya, in East Africa, and many points of West Africa, was farther than flying from New York to Los Angeles by some 1,000 miles.
Second in size only to Asia, the African continent is larger than the United States, China, and India combined. The climates and landscapes of its 54 countries (48 in SSA) are diverse and highly unique in the world. There are jungles in Sierra Leone; rain forests in Côte d'Ivoire; and deserts, such as the Danakil in Ethiopia and the Kalahari in Botswana, Namibia, and South Africa. Then, of course, there's Africa's unique wildlife and geographical wonders, such as Victoria Falls, straddling borders with Zambia and Zimbabwe. Known for its red earth in places such as Tanzania's Serengeti National Park, Africa also gets snow on Mount Kilimanjaro (its highest peak) and in South Africa's Drakensberg and Lesotho's Maluti Mountains.
Even for all its Pan-African unity, Africa is the most diverse continent on the planet by numbers of linguistic and ethnic groupings (more than 2000 in each). When it comes to population, Africa is surging forward on four global demographic milestones. It has the world's fastest-growing population (surpassing a billion in 2009), largest youth population (200 million between the ages of 15 and 24), most rapidly urbanizing population (3.09 percent going rural to urban annually), and the globe's fastest-growing consumer class, in terms of expanding individual spending power. These trends alone speak volumes to the thesis of Africa's prominent role in the 21st century. As the continent's richest man, Nigeria's Aliko Dangote, frankly told us, "Whatever the preconceptions, the world can't ignore Africa's numbers."
On Africa's history, experts would likely agree that the continent's past has been markedly more difficult compared to that of others. Africa's development was greatly interrupted first by slavery, then by several hundred years of European colonization, extending into the 1950s, '60s, and '70s independence movements. Africa's first decades of independence were negatively influenced by colonial overhang and the proxy status of its new nations on the Cold War chess board. Finally, for Africa, the first decade of the post–Cold War era of globalization carried a great deal of instability, with a majority of the world's armed conflicts occurring in SSA through the 1990s.
(Continues...)
Excerpted from The Next Africa by Jake Bright, Aubrey Hruby. Copyright © 2015 Jake Bright and Aubrey Hruby. Excerpted by permission of St. Martin's Press.
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Table of Contents
Introduction
PART I
AFRICA'S GREAT ECONOMIC LEAP
Why Global CEOs and the World's Smartest Business Thinkers Are Talking About Africa
1. Africa's Growth: Booming Commerce Becomes a Continent's Catalyst
2. Capital Is King: Global Investment In Africa
3. The Rise of African Consumer Power
PART II
CONSTRAINTS AND DEAL BREAKERS
A Summary of Africa's Post-Cold War Disconnect from Global Markets and Challenges That Could Derail its Historic Moment
4. The Globalization Gap: The Problem of Less Than 3 Percent
5. Africa's Deal Breakers 113
PART III
GAME CHANGERS AND TRAILBLAZERS
The Significant People, Places, and Things Taking Africa into a New Era
6. "Africa Has a Tech Industry?": The Rise of Silicon Savannah
7. Africa's Evolving Technology Landscape: Now and Forward
8. The Diaspora: Africa's Elite Remote Nation
9. The FABA Profiles: Africans Reshaping Their Continent
PART IV
AFRICA FORWARD
A Look Ahead to a More Connected, Complex, and Globally Influential Africa
10. How to Get In: Individuals and Businesses
11. Africa's Growing Global Cultural Influence
12. Africa in 50 Years
Acknowledgments
Index