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Investing in Africa

In PwC’s 20th annual survey of CEOs worldwide, 38% (2016:35%) are very confident about their company’s growth prospects in the next 12 months while 29% (2016:27%) believe global economic growth will pick up in 2017.

Despite the continent’s economic challenges, young African entrepreneurs are overwhelmingly upbeat about the future, says a new report by the Anzisha Prize.

Securing commercial property for business, finding a home, or buying land in Africa has been made easier for Africans abroad by the real estate portal, Let’s Move Africa.
Dentons’ report from the 12th Annual Africa Private Equity and Venture Capital Association (AVCA) Conference positions Private Equity as a force for good in Africa.
Image What the outcome of the 2010 Ibrahim Index says about the success of democracy and governance in Africa

The 2010 Ibrahim Index, released towards the end of last year, shows recent gains in many countries in human and economic development but declines in political rights, personal safety and the rule of law.

The Ibrahim Index, launched in four cities across the continent, is published by the Mo Ibrahim Foundation, an organisation committed to supporting good governance and great leadership in Africa. The Index assesses the delivery of public goods and services to citizens by governments and non-state actors across 88 indicators.

A Mixed Picture on Governance

Upon issuing this year’s Index Mo Ibrahim, Founder and Chair of the Foundation, said: ‘The 2010 Ibrahim Index gives us a mixed picture about recent progress on governance across the continent. While many African citizens are becoming healthier and have greater access to economic opportunities than five years ago, many of them are less physically secure and less politically enfranchised.’

The Ibrahim Index is Africa’s leading assessment of governance, established to inform and empower the continent’s citizens and to support governments, parliaments and civil society to assess progress.

The 2010 Ibrahim Index, released towards the end of the year, shows recent gains in many countries in human and economic development but declines in political rights, personal safety and the rule of law.


The 2010 Ibrahim Index shows both areas of progress and setbacks in governance between 2004/05 and 2008/09 (the most recent period assessed). Among some of the key points noted are:

  • Overall governance quality remains largely unchanged from previous years, with a continental average score of 49. However, this average masks large variation in performance across countries. Angola, Liberia, and Togo have all seen significant improvements in governance performance scores.
  • In both Sustainable Economic Opportunity and Human Development there have been improvements in many African countries. Importantly, no country has declined significantly in these categories.
  • In Sustainable Economic Opportunity, 41 African states improved; ten of these were significant.
  • In Human Development, 44 of Africa’s 53 countries progressed driven by improvements in most countries in the Health and Welfare sub-category. Two of the improvements in Human Development were significant.
  • This progress is not mirrored in Safety and Rule of Law and Participation and Human Rights.
  • In Safety and Rule of Law, 35 African states have declined; five of these were significant declines.
  • In Participation and Human Rights, although the results were more mixed, almost two-thirds of African countries declined in the Participation and Rights sub-categories.
  • Analysis of the performance of countries in the Gender sub-category shows some progress.
Political and Economic Governance

Considering these results, Salim Ahmed Salim, Board Member of the Foundation and former Secretary-General of the Organisation of African Unity, said: ‘We must ensure that the political side of governance in Africa is not neglected. We have seen from evidence and experience across the world that discrepancies between political governance and economic management are unsustainable in the long term. If Africa is going to continue to make progress we need to pay attention to the rights and safety of citizens.’

The Ibrahim Index of African Governance was created in recognition of the need for a robust, comprehensive and quantifiable tool for citizens and governments to track governance performance in Africa. The Ibrahim Index continues to be improved each year as part of the Foundation’s commitment to ensure it is a living and progressive tool.

The 2010 version includes an additional indicator assessing governments’ statistical capacity, providing insight into governments’ commitment to outcomes-driven policy-making and evaluation. New indicators have also been included to assess gender issues, provision of antiretroviral treatment and access to water and sanitation. However the paucity of data about Africa continues to be a challenge for the Foundation in the compilation of the Index. Official data for many key indicators of governance, for example, income poverty, maternal mortality, and physical infrastructure are patchy or out-of-date. Commissioning and finding indicators that allow these key areas, among others, to be included in the Index as well as strengthening the assessment of issues currently covered by the Index remain a core priority for the Foundation.

The Ibrahim Prize

The Mo Ibrahim Foundation is committed to supporting great African leadership that will improve the economic and social prospects of the people of Africa. The Foundation’s focus is the promotion of good governance in Africa and the recognition of excellence in African leadership.

The Foundation also confers the Ibrahim Prize for Achievement in African Leadership, the largest annually awarded prize in the world. The Prize Committee, chaired by Kofi Annan, awards US$5 million to a former Executive Head of State or Government who has demonstrated exceptional leadership during their time in office.

The Ibrahim Prize recognises and celebrates excellence in African leadership. The prize is awarded to a democratically elected former African Executive Head of State.


The Ibrahim Prize recognises and celebrates excellence in African leadership. The prize is awarded to a democratically elected former African Executive Head of State or Government who has served their term in office within the limits set by the country's constitution and has left office in the last three years.

Following its deliberations, the Prize Committee informed the Board of the Foundation that it had not selected a winner for the 2010 Mo Ibrahim Prize. In 2009 the Prize Committee announced that it had considered some credible candidates, but after in depth review could not select a winner. Image In 2010 the Prize Committee told the Board that there had been no new candidates or new developments and that therefore no selection of a winner had been made.

The first winner of the Prize was Joaquim Chissano, former President of Mozambique in 2007, followed by Festus Mogae, former President of Botswana in 2008. In addition Nelson Mandela was made an Honorary Laureate in 2007.

Mo Ibrahim, the founder and Chairman of the Mo Ibrahim Foundation, said: “The Board respects the decision of the Prize Committee not to select a winner for the 2010 prize. The Prize Committee, which is independent from the Board, is a unique repository of experience and expertise.

Ibrahim Leadership Fellowships

“Whether there is a winner or not, the purpose of the Foundation is to challenge those in Africa and across the world to debate what constitutes excellence in leadership.

“The standards set for the Prize winner are high, and the number of potential candidates each year is small. So it is likely that there will be years when no Prize is awarded. In the current year, no new candidates emerged.

“Many African countries are making great strides not just economically, but also in terms of their governance. The Ibrahim Index, which measures the performance of African countries across around 80 governance criteria, indicates that the overall standard of governance is improving.

“Nevertheless, the Foundation is anything but complacent about the standards of governance in Africa. Its mission is to improve governance and nurture leadership in Africa. It is clear that much more needs to be done. It is for that reason that the Foundation has decided to promote complementary initiatives.



“For example, the Foundation will shortly be launching the Ibrahim Leadership Fellowships, a selective programme designed to identify and prepare the next generation of outstanding African leaders by providing them with mentoring opportunities in key multilateral institutions. The programme will seek to attract a number of highly qualified and talented professionals each year to serve in leading institutions whose core objective to improve the prospects of the people of Africa.

“The Foundation is currently working with pan-African organisations to design the fellowships. It will announce further details of them at the Foundation’s annual celebration and forum on governance to be held in Mauritius in November. Applications will open shortly afterwards and we expect the first Leadership Fellows to begin their Fellowships early next year.

“The task of promoting good African leadership is more important than ever. Good governance is crucial if African people are to share in the strong economic growth that many are predicting for Africa. There are many ways to support great leadership. The prize is one such way, the fellowships will be another.”

The 2010 Ibrahim Index of African Governance is based on the latest available data for each indicator; this data is mostly from 2009. Where 2009 data are unavailable, 2008 data are used. The 2010 Ibrahim Index includes retrospectively revised scores and rankings for previous years to reflect newly available data and changes to the indicators that are included in the Index.
Image Africa investor (Ai) and Interbrand-Sampson's recently launched first African Brand Investment Index provides invaluable evidence about how countries are perceived as investment destinations by the global investment community.


Africa investor (Ai) and Interbrand-Sampson's first African Brand Investment Index provides invaluable evidence about how countries are perceived as investment destinations by the global investment community. The first of its kind, the research outlines what investors think about Africa, and what African countries should be aware of when jostling for investment.

"African governments and business leaders alike need to realise the way in which they are promoting their countries is absolutely crucial for attracting and retaining both domestic and foreign investment, and the Brand Investment Survey and Index aims to highlight just this," said Hubert Danso, Vice Chairman and Managing Director at Africa investor.

Groundbreaking Research on Perception for Investment

This groundbreaking research highlights political stability, economic growth prospects and currency stability as the top three perception investment attributes.

According to the poll, Africa was considered the third most attractive investment destination after Southeast Asia and India. Unsurprisingly, South Africa emerged as the preferred investment destination, followed by Egypt, Ghana and Kenya, while Somalia was ranked to have the worst investment brand on the continent.

With 60% of those surveyed saying they rely on professional advisors as sources of information when exploring investment opportunities, many also felt that African governments are not doing enough to promote the region as an investment destination.

Many....felt that African governments are not doing enough to promote the region as an investment destination.


The issues highlighted around Africa's investment brand have much to do with political stability and regulatory practice. The Index also revealed that the majority of respondents feel that Africa will improve its investment brand profile over the next 12 months.

Investment Factors

The key to being an attractive investment Image destination brand, says the study, is a combination of political and economic stability, with communications an important aspect of the mix. 57% of respondents rated political stability to be of high importance, with economic growth and stability of currency not far behind at 46% and 45% respectively.

When asked about positive associations with Africa, attributes such as potential, opportunity and growth powered by natural resources, and human resources featured, while technology was conspicuously absent.

Negative associations included corruption, political instability and poor infrastructure – factors, the report says, that holds back the image of Africa as an investment destination.

The survey suggests that while Africa is seen to have strengths such as being a welcoming, fast growing and ambitious continent, it is still not considered by many people to be stable, efficient and trustworthy enough for investing.

Communicating Africa's Investment Brand

The report suggests that professional advisers and analysts, as the top two information sources for investors, are critical to improving Africa's investment brand. The future looks positive for the continent which emerged from the study with an overall Brand Investment Index of 75 out of 100. However, countries within Africa were generally considered to be poor at promoting their own investment potential.



"Africa has a great opportunity to harness the goodwill from the investment community to position brand Africa as a globally competitive investment destination," says Danso.

"The continent has made great strides implementing a raft of regulatory reforms to ensure it is business friendly and it's up to governments to commission adequate resources to communicate effectively in today's competitive and complex global investment information environment."

For Doug de Villiers, CEO of Interbrand-Sampson which ran the survey in partnership with Africa investor, it has proved an instructive exercise.

"We wanted to first understand the strength of the African investment brand in a competitive context, to establish the images associated with that brand, and to find out the positive or negative brand images attached to particular African countries."


For a copy of the full survey or further information:  www.africa-investor.com.

ImageAureos Capital has launched a new private equity fund in Africa to support small and medium enterprises and growth across the continent.

November saw the launch of a new private equity fund in Africa intended to support the growth of small and medium sized enterprises (SMEs) in Africa.

The Aureos Africa Fund will provide long term capital for successful and promising SMEs across the continent, targeting investments in sectors and countries where Aureos sees real potential for above average growth. Aureos, a private equity fund management company specializing in providing expansion and buy-out capital to unlisted businesses across emerging markets, worked closely with the Commonwealth Secretariat on the Fund.

To date, the Aureos Africa Fund has raised US$322.8 million and has already made nine investments totaling US$106.2 million.

The Commonwealth Secretariat, which represents 53 countries around the globe, has assisted the fund manager to raise a private equity fund for Africa targeting a US$400 million final close. To date, the Aureos Africa Fund has raised US$322.8 million and has already made nine investments totaling US$106.2 million across sectors including financial services, building products, real estate development and agri-business in 18 countries.

'Continued Investment is Essential'

In supporting the Aureos Africa Fund, the Commonwealth Secretariat has recognized that continued investment in Africa is essential, especially during the current economic slowdown, in order to prevent the gains made in Africa over recent years to be lost.


The Secretariat's relationship with Aureos, which specializes in investing in small to mid-sized businesses, dates back to 2005, when Commonwealth Finance Ministers approved an extension of the Commonwealth Private Investment Initiative, set up 10 years earlier to raise funds investment in development member countries.

The objective was to demonstrate that pre-emerging markets and small economies could offer attractive returns for private investors and it has helped to raise approximately US$800 million for investment in Africa, Asia, the Caribbean and the Pacific.

SMEs – Mainstays of African Economies

"There is no longer any debate about the role of the private sector in promoting development," said Ransford Smith, Deputy Secretary-General of the Commonwealth Secretariat, at the launch.

Image "Promoting investment in our member countries is a core activity of the Commonwealth Secretariat," he added. "The SME sector is the key target of the Fund and since 2005 we have concentrated on the SMEs as they represent the mainstay of economies."

The role of the Commonwealth Secretariat in the Fund, said the Deputy Secretary-General, is that of promoting investment through its relationship with Aureos.

"Investment promotes economic development, raises income levels and promotes prosperity, improving the well-being of our member states. But of course while our focus is on promoting investment through Aureos, we do not seek nor play any role in the commercial decisions of the funds."


The Aureos Africa Fund

Image The Fund will seek to make investments of between US$2 million and US$10 million, focusing mainly on companies with the potential to build pan-African businesses. While it will be diversified, the Fund will have a primary focus on sectors that are expected to continue to experience rapid growth across areas such as logistics, construction, engineering and associated services and fast-moving consumer goods.

The Africa Fund closes in mid-December 2009 and has attracted a diverse investor base that includes international finance institutions, US-based private sector investors, European pension funds, family offices and commercial banks.

According to the Deputy Secretary-General, "this Fund has the potential to make a real contribution to Commonwealth countries in Africa, by helping ordinary businesses to reach their potential and boost much needed growth and jobs across the continent."


Profitable Growth Opportunities

"Africa has long been overlooked by institutional investors and small to mid-cap companies across the continent find it particularly hard to access equity investors, says Davinder Sikand, Regional Managing Director of Aureos in Africa. "The Aureos Africa Fund is an essential part of the effort to address that problem."

"Already the Fund has had considerable success in attracting first time investors into Africa," he adds. "They realize that there is vibrant economic activity across Africa, with profitable growth opportunities priced at very attractive multiples."

"This Fund will not only provide investee companies with the risk capital they need to expand, but also a high level of management support from Aureos’ experienced locally based staff. We will be focusing on improving investee companies’ governance, strategy, systems and recruitment and bringing access to other investors and lenders through Aureos’ regional and global networks."

Top Photo: Rodger Bosch www.MediaClubSouthAfrica.com

Image Nigeria is a country of 150 million. A recent conference in London highlighted the case for investing in Nigeria and accessing a regional market of 300 million people.


With recent market turmoil and lost confidence in structured credit products, fund managers and OECD banks are now seeking modest equity stakes in sound emerging markets, as they can demonstrate higher earnings potential in coming years.

Nigeria is a country of 150 million people - by far the biggest in Africa. It boasts an expanding, entrepreneurial workforce, a progressive government with a proactive agenda of attracting foreign direct investment and access to a further regional market of 300 million people.

Creating an Enabling Environment

The benefits of investing in Nigeria were the basis of a conference held in London earlier this year where top officials including HE Goodluck Jonathan, Vice President of Nigeria, cabinet ministers and representatives from the World Bank and private sector companies laid out the business case.

The conference, hosted by DMA, in association with Africa Matters Ltd., was opened by Baroness Lynda Chalker, followed by a welcome address from HE Senator Dalhatu Sarki Tafida, the Nigerian High Commissioner to the UK.

Nigeria……boasts an expanding, entrepreneurial workforce, a progressive government with a proactive agenda of attracting foreign direct investment and access to a further regional market of 300 million people.


In his presentation, Mustafa Bello, the Executive Secretary of the Nigerian Investment Promotion Commission, outlined the efforts being made by the Nigerian government to promote investment. Key among these are the government's intentions to diversify the economy away from oil to non-oil sectors, and drive investments into critical infrastructure sectors, such as power and transportation. The government also plans to enhance productivity within the agriculture sector, including agro-processing and manufacturing, and improve operations at the sea and air ports as well as customs operations.

It is measures such as these that will, said Mr. Bello, create an enabling environment in which the private and public sectors can work in partnership for poverty eradication and wealth creation.

The Business Case for Investment

With a population that accounts for 20% of Africa, vast arable land (over 60% of Nigerian land area is suitable for agriculture and remains under utilized), a strategic position at the hub of West and Central Africa giving it access to large markets, as well as a resourceful and cost effective workforce with 60% youth, Nigeria has many qualities to attract overseas investment. Image

As sub-Saharan Africa's second-largest economy, after South Africa, Nigeria is attracting greater interest from strategic direct investors. While European and US companies have traditionally been the major investors, Chinese and Arab investors are now making big inroads into West Africa's No.1 market.

Investment opportunities exist in Nigeria across a wide range of sectors, including power/energy, oil and gas, agriculture, banking, tourism, manufacturing, ICT and pharmaceuticals.

To encourage investment, the Nigerian Government has put a range of statutory incentives in place to lower the cost and increase the effectiveness of doing business within its borders. Companies are able to benefit from a tax holiday of up to 5 years and a number of capital allowances such as VAT at only 5%. Within the country's free zones, there is no personal income tax requirement, no foreign exchange regulation and 100% repatriation of capital and profit.


The NIPC, as the Nigerian government agency charged with responsibility for promoting and co-ordinating both foreign and domestic investments into Nigeria operates under legislation which guarantees investors against any nationalisation or expropriation of their business by the government.

As part of its role, the Commission arranges and facilitates meetings with relevant Government Agencies or State Governments in Nigeria, co-ordinates site visits as part of pre-investment activities and post investment services, and provides assistance to investors through dedicated account teams. By taking responsibility for removing the bottlenecks faced by investors in establishing and running business, the Commission seeks to reduce the cost of doing business in Nigeria.

Changing Perceptions and Image

A major challenge that Nigeria continues to face in its efforts to attract investment, however, is the often negative public perception of the country as a focal point of crime and corruption. Image

As High Commissioner Tafida observed at another recent event highlighting Nigeria, "it is unfortunate that a negative perception of our country leads to disinvestment.

Yet thousands of hard-working Nigerians are making significant contributions to their country. The good stories are not being told and Nigerians all over the world must reject unfair labeling."

Every country has its challenges, he noted. "What matters is the efficacy of government in tackling those challenges for the benefit of the electorate."

Ongoing Challenges

According to DMA's 'Investing in Nigeria' report, achieving President Umaru Musa Yar'Adua's 'Seven Point Agenda' will help transform Nigeria into a vibrant diversified economy, which can create seven million new jobs and attract private-sector capital (including FDI) into the agricultural, mining and manufacturing sectors.

"Essential elements for micro-reforms are addressing power shortages; building an efficient industrial base; food security through a 5-10 fold hike in yield and production; reforming land ownership; updating the dilapidated transport network; improving the educational system, with emphasis on science and technology; and strengthening national security, particularly in the Niger Delta, the most prolific zone in the Atlantic basin", says the report.


If the country's hard-won gains and reform momentum made to date are preserved and intensified, says the report, "the next decade could prove Nigeria's best since the 1960's."

As the Nigerian President is apt to say, "The business of Nigeria is Nigeria." However, to ensure that business continues to see Nigeria as a favoured destination, he says, "Hard work by all is required."

ImageA recent conference in London successfully highlighted the vast investment opportunities now available in Tanzania.

In April, over 200 delegates attended the UK Tanzania Investment Forum in central London. The Tanzanian Government, represented by its Vice President, key ministers, central bank governor, investment centre and several major businesses, came to the UK for the purpose of engaging with the investment community from the UK, Ireland and mainland Europe. With over 800 km of coastline, access to six landlocked countries, the world famous Serengeti Plains, Zanzibar and Mount Kilimanjaro, the United Republic of Tanzania is both one of the most naturally stunning and best positioned developing markets in the region. In 2007, The Tanzania Investment Centre endorsed almost 600 projects, creating an estimated 70,000 jobs. Since 2002, foreign direct investment has increased by 1000% in the agricultural sector, 900% in tourism and 500% in manufacturing.

Now is the Time

In her introductory speech, H.E. Mwanaidi Sinare Maajar, High Commissioner of Tanzania to the United Kingdom, made clear the message of the day. "Now is the time to invest in Tanzania."

"The theme of our Conference today is "Invest in Tanzania, a country of limitless opportunities", she said. "We have had Investors Conferences in the past. But today it is different in one important aspect. There is a good presence here of companies already established in Tanzania and who are also sponsors of the Conference."

Tanzania is both one of the most naturally stunning and best positioned developing markets in the region.

Referring to the speakers and chairs of the conference sessions, most of whom were from the private sector in Tanzania, the High Commissioner added, "In respect of those representing international companies in Tanzania I would like to say this. They went to Tanzania, they saw the opportunities, they are conquering the challenges and they came here to tell it all."

Tanzania Investment Report 2008

Tanzania’s Minister for Trade and Industry, Dr. Mary Nagu, welcomed delegates to the event while also officially launching the Tanzania Investment Report 2008.*

"This report highlights opportunities available to the private sector today," she said. The report offers a "critical and accurate" analysis of Tanzania, looking at the country’s economy and its emergence as the fastest growing economy in the region. Image Several sectors, including agriculture, energy and mining – 1500 prospective licenses have been granted in the last 10 years – offer investors enormous opportunities within the country.

The Minister cited the development of infrastructure, one of the key issues for the country’s development, as a golden opportunity as well as tourism and manufacturing.

The report, which also contains interviews with President Kikwete, the Governor of the Bank of Tanzania and people with first-hand knowledge of doing business in the country, details the business climate and the investment opportunities in Tanzania.

Many of Tanzania’s public sector enterprises have been earmarked for reform and cut across a number of sectors including transport, energy and communications, while the country’s impressive growth rate has had a positive impact on investor confidence.

Growth and Fiscal Management

Endowed with a bounty of mineral and agricultural resources, Tanzania has one of the best performing economies in sub-Saharan Africa. According to the IMF, "Sound policies have contributed to robust growth and moderate inflation, placing Tanzania among the leading successful reformers in Africa."

Tanzania’s newly appointed Central Bank Governor is Professor Benno Ndulu and, in his presentation, the former World Bank official highlighted the country’s fastest growing sectors.

"Mining and quarrying have grown at a rate of 15.9% and manufacturing at 8.2%," he said. "The construction sector has grown very rapidly at a rate of 11%, with transport and communications and the financial sector at 8% and 9.7% respectively."

The country has diversified further from its traditional export base. Non-traditional export earnings in 1998 made up 69% of export earnings but, by 2007, this had risen to 91.5%. The biggest contributor to this change has been tourism and today, manufactured products and transportation also exceed the earnings from traditional exports.

Through effective economic management, the country’s inflation rate has moved from 34% in 1994 to single digit levels for the past 9 years. Image Since 1995 there has been a ten-fold increase in foreign exchange reserves while interest rates have also dropped to single digits. A rapidly growing financial sector has seen growth from 2 banks to 34 banks and the introduction of modern payment systems.

"A major feature of our economy is the stability of the growth path," said the Governor. "In a bad year, we now still produce 4-5% growth because of the diversification of our economy."

Golden Opportunities

Professor Ndulu highlighted three key areas of opportunity in Tanzania."There are opportunities for building on our rich natural resource base through agriculture, minerals, tourism and fisheries. We also offer an avenue for transit trade as Tanzania is a gateway to the Great Lakes Countries of DRC, Rwanda, Burundi, Malawi, Zambia and Uganda. Our agro industry also offers an area for value adding and export."

Tanzania is Africa’s third-largest gold producer after South Africa and Ghana, and the country has attracted investments worth US$2.5 billion from a number of mining corporations such as Barrick Gold of Canada and AngloGoldAshanti of South Africa.

Agriculture makes up 26% of the economy and despite the rapid growth of other sectors, plays a key part in the country’s development, employing over 80% of the rural population. The sector, largely dominated by subsistence farmers, offers huge potential for large-scale commercial farming through the introduction of modern farming techniques, technology and capital. Particularly attractive to investors, said the Governor, is the option of enhancing scale, productivity and value addition through outgrower schemes.

Tanzania’s energy sector offers opportunities in electricity generation, natural gas and oil. The Tanzanian Government has indicated its intention to deregulate the energy sector, allowing private competitors to challenge the state-owned company’s monopoly in order to connect more citizens to the benefits of electricity.

"There are opportunities for building on our rich natural resource base through agriculture, minerals, tourism and fisheries."

Tanzania’s energy needs also make solar energy another important area of investment, especially because only about 10% of an estimated 40 million people have access to electricity.

Addressing the Challenges

As a developing economy, Tanzania does face challenges despite its successes to date, said Professor Ndulu. Maintaining macroeconomic stability in the face of the rising costs of food and oil will prove a test, as will the ability to maintain exchange rate stability.

The country will also have to manage credit expansion while keeping a check on inflation. There has been an increase in savings mobilization through loan syndications and IPOs in the country but the Government will have to continue to widen the tax base to meet any gaps in financing.

One of Tanzania’s key stumbling blocks to rapid economic growth is the poor state of much of the infrastructure, from her roads and railways to her airports and ports. Investors have been encouraged by the Government to put their money into infrastructure, with a number of incentives available to help ventures get off the ground.

Seeing challenge as an opportunity was a theme echoed by Anne Barrington, the Irish Ambassador to Tanzania. In her address, the Ambassador pointed out that "one of the great challenges is getting the infrastructure Tanzania needs in place – and that is a great opportunity for the private sector."

The conference programme targeted the key sectors of Infrastructure Development, Mineral Exploration and Manufacturing, Tourism and Business Services and a number of specific investment projects were discussed in detail.

Organised by DMA (Developing Markets Associates), the successful Forum was followed by an evening reception and a one day Diaspora event for Tanzanian migrants living in the UK.

* Available free through www.dmassocs.com Images: Courtesy of DMA (www.dmassocs.com)

ImageA new film by award winning producer Carol Pineau shows enormous investment opportunities in a continent that many least expected.

A new documentary, “Africa Investment Horizons”, which premiered at the New York Stock Exchange in April 2007, shows the tremendous gains being made in Africa’s vibrant emerging markets and proves one surprising fact – that the highest rate of return on direct investment is found on the continent most people think of as an economic wasteland.

With the current U.S. economic downturn, investors are looking for new markets. This one-hour documentary, produced by Carol Pineau, director and producer of the award-winning documentary, Africa Open for Business, shows that Africa may be the next untapped investment destination.

A Mutual Fund in Ghana that has averaged 60% Returns

“Africa Investment Horizons” presents compelling narratives from international and African business leaders on the tremendous potential of Africa’s emerging markets and how their investments have succeeded beyond expectations despite the challenging business climate. Stories range from the largest equity fund in Africa where the price of entry is $5 million, to a mutual fund in Ghana that has averaged 60% annual returns and requires a minimum investment of about $55.

Big investors have been investing in Africa for more than a decade, but most have kept quiet about the astonishing returns, preferring to keep the investing world’s final frontier to themselves – until now.

“Most people think of Africa as a region rife with wars, disease and poverty, but that is not the Africa of today,” said Pineau, a journalist with more than a decade of experience reporting on Africa for CNN and other major media. “Today’s Africa is a continent with challenges, but it is a continent on the move and an attractive investment destination. More important, investment may be the best means for addressing Africa’s challenges.”

Big investors have been investing in Africa for more than a decade, but most have kept quiet about the astonishing returns.

Pineau’s filmmaking has been hailed for showing a more balanced vision of Africa. She is the producer and director of the award-winning documentary, ‘Africa Open for Business’, a groundbreaking film voted BBC Documentary of the Year. The film was also screened at the Cannes Film Festival, World Economic Forum, US Congress, and other top venues. It aired on BBC World and public television stations in the US. She recently directed and produced Kenya Stories, a film on Kenya’s aspiring young entrepreneurs.

Image“African Investment Horizons” features the three major avenues for investment in Africa: capital markets, equity funds and launching a business. The first half of the film shows a kaleidoscope of opportunities throughout the continent, while later segments address the issues around investing, such as corruption, political risk, currency devaluation, and the trade versus aid debate.

The film chronicles inspiring stories of dynamic and committed businesspeople working to create a new economic future for Africa. Among the featured stories are two Ivy League educated Ghanaians who left top jobs on Wall Street to return home. With $25 million from institutional investors, they walked into the Ghana Stock Exchange and did what is now referred to as “the big bang” that put the Exchange on the map.

Also featured is the Governor of the Bank of Botswana, whose prudent management of her country’s vast diamond income has not only resulted in one of the highest per capital savings rates in the world, but also allowed the country to offer free education to all and anti-retroviral drugs to people living with HIV/AIDS.

ome of the Fastest Growing Economies

ImageAfrica boasts more than 20 stock exchanges and the some of the fastest growing economies. China, Russia and India are investing heavily in the continent, and yielding impressive returns. Those returns average 30 %, compared to 16 to 18 % in other developing countries.

“Typically, one gets high returns where there is little information and little competition,” Teresa Clarke Ellis, Goldman Sachs’s Managing Director of Investment Banking explains in the film. “The capital markets in Africa are a fraction of the size of the more developed markets,” continues Ellis. “However in the last few years we’ve seen substantial returns outpacing those in the developed markets by a large measure,” she adds.

Africa’s role as a major player in the global economic field is underscored by the fact that film production funds were generated solely from African sources, including: Noah A. Samara, CEO of Worldspace; Sasol; Coca-Cola Africa; Industrial Development Corporation; Trust Africa; and Open Society Foundation for South Africa.

The NYSE event was sponsored by IBM’s Global Innovation Outlook and the African Development Bank. After premiering in New York City, the film was launched at the US Chamber of Commerce in Washington in May followed by the London Stock Exchange later that month. The documentary will be screened throughout the U.S., Africa, Europe, and Asia, thanks in part to funding from USAID.

For more information and to view the preview, please visit www.africainvestmenthorizons.com

A recent conference in London on investing in emerging markets provided the opportunity for a spirited defence of investment in Africa.


“Africa does have significant opportunities for everybody. The Chinese have realised it and are investing hugely in the continent”

Victor Osalador, UBA

The Emerging Markets Summit, a two-day conference sponsored by the Economist, examined the prospects for long-term sustainability in the new emerging markets. But, while China, Russia, Brazil and India are all portrayed as hot investment destinations, Africa is often portrayed as a high risk venture.

The conference provided the chance for leading African businesses to acknowledge the risks but, more importantly, to highlight the increasingly attractive investment environment across much of the continent.

Finding Creative Solutions to Doing Business in Africa

Africa is on the move, with economic growth at 5-6% over the last 5 years. The African continent is still considered among the most difficult business environments in the world but offers a huge market of around 800 to 900 million consumers.

One high profile champion of Africa’s investment potential was Victor Osalador, Chief Financial Officer of United Bank for Africa (UBA) and its Executive Director for Risk Management and Finance.

“If you are able to go in there for the long haul, you will make your brand very strong very quickly.”

Acknowledging the risks pertaining to any high return opportunity, Osalador noted however that in Africa “the challenges are diminishing by the day.” He highlighted the speed at which the market is growing and stressed its long-term potential. &ldquoIf you are able to go in there for the long haul, you will make your brand very strong very quickly.”

From Negative to Positive Branding

“Africa is mentioned only in the light of the negative but there are a lot of positives,” Osalador observed, pointing out that a recent World Bank report has highlighted strong positive indicators for the continent.

The African Peer Review Mechanism was, he said, another illustration of the way many countries in the continent are doing things differently and are increasingly prepared to account to their peers for their actions.

In terms of economic growth, he added, the explosion in the telecoms sector in Africa is a clear example of advancements that have made changes in people’s lives and in how business is done. In Nigeria, home of Osalador’s bank, the recent banking consolidation reforms transformed the economy from 89 banks to 24 strong banks. UBA, itself a merger of two banks and one acquisition, is today the leading bank in Nigeria. As the economies around the continent continue to experience growth, Osalador said, African countries’ need for skills is also increasing. This offers greater business and career opportunities for Africans outside the continent to return and participate in the growth.

“Somehow Africa is treated as a monolithic entity …. This has been a real challenge for governments – to get investors to look at individual countries and, within them, at individual corporations.”

He urged the delegates to revise their assumptions about the continent and to focus on the facts.

“Let us look at Africa – it does have significant opportunities for everybody,” he said. “The Chinese have realised it and are investing hugely in the continent; a sure sign that it is coming up.”

Africa - One Country or 53?

“Somehow Africa is treated as a monolithic entity,” observed Indrajit Coomaraswamy, Director of Economic Affairs at the Commonwealth Secretariat and a panellist at the conference. “This has been a real challenge for governments – to get investors to look at individual countries and, within them, at individual corporations.”

African governments are addressing the issues of governance and corruption, he said, citing Nepad (the New Partnership for Africa’s Development) as an African owned process and therefore one that will be more sustainable in the future. Many countries are making concerted efforts to move in the right direction and are providing major concessions for investors.

“There has been significant progress in terms of macroeconomic stability,” he added. Infrastructure remains perhaps Africa’s greatest challenge, making the cost of doing business in Africa high. Improving transportation and power will be key to Africa’s continued development. However, African governments are conscious of this and many are taking very pragmatic approaches to financing infrastructure projects.

The role of the private sector in Africa’s economic growth is crucial, he added. “Increasingly there is a consensus that there should be a private sector led economic strategy”. This, along with increased dialogue between the public and private sectors, has also seen emerging business associations engaging with governments. “The reform process in Africa should be seen as a marathon,” he said, “not a sprint.”

The international trading and financial systems “doesn’t do Africa many favours,” he observed. With 70% of the African continent being agrarian, European Union subsidies alone create substantial difficulties for many across the continent.

Despite these factors, overall indicators suggest that over the coming years, Africa’s star will continue to rise.


“With this conference, we are providing an opportunity to hear from investors who have succeeded in Africa.”

Terhas Berhe

On 22 February, the London Stock Exchange will host a high level conference that will bring together investors, financiers and key players in a bid to highlight the attractions and examine the challenges of investing in Africa.

The African continent today offers some of the best investment opportunities in the world and has one of the fastest growing economies. The International Monetary Fund has raised its economic growth forecast for African to 6.8% this year from 5.7% in 2006. Africa’s longest expansion in more than three decades is fuelling demand for capital from overseas.

Finding Creative Solutions to Doing Business in Africa

Africa is on the move, with economic growth at 5-6% over the last 5 years. The African continent is still considered among the most difficult business environments in the world but offers a huge market of around 800 to 900 million consumers. One high profile champion of Africa’s investment potential was Victor Osalador, Chief Financial Officer of United Bank for Africa (UBA) and its Executive Director for Risk Management and Finance.

ReConnect Africa spoke to Terhas Berhe, Managing Director of Brand Communications, the UK based financial communications company focused on Africa and the Middle East. The African Investment Finance and Conference, organized by Brand Communications, is in association with the Commonwealth Secretariat and in partnership with IC Publications and is scheduled to feature speakers including Stephen Jennings, CEO of Renaissance Capital, Celtel founder Mo Ibrahim and David Lenigas of Lonrho.

“In the last two years, investment in the West has been stagnant or in decline. The next major investment frontier will be in Africa,” says Berhe. “With this conference, we are providing an opportunity to hear from investors who have succeeded in Africa; who can talk about where the best investments projects are and how to minimize risks.”

Addressing the Afro-Pessimists and Sceptics about Africa

ImageAcknowledging the risks pertaining to any high return opportunity, Osalador noted however that in Africa “the challenges are diminishing by the day.” He highlighted the speed at which the market is growing and stressed its long-term potential. “If you are able to go in there for the long haul, you will make your brand very strong very quickly.”

From Negative to Positive Branding

Selling the story of investment in Africa is not easy for many reasons, says Berhe. “There is still scepticism about investing in Africa, primarily because of a lack of information and awareness. What this conference will provide is a platform for investors, financiers, economists and strategists from the global financial community to highlight the opportunities across Sub-Saharan Africa.”

The Africa Investment and Finance Conference will address a number of key topics including the macroeconomic framework and investment outlook, doing business in sub-Saharan Africa, Africa's capital markets, the private equity landscape, market developments, Africa’s banking sector, infrastructure financing and foreign direct investment opportunities in Africa.

There is no shortage of investment success stories from Africa, insists Berhe. “For instance, take a look at Emerging Capital Partners and Ecobank, both of whom will have speakers at the conference. Emerging Capital Partners’ investment in Ecobank produced returns of 300% following Ecobank’s successful listing in 2006, an outcome you are highly unlikely to find in any matured market and which is also rare in other emerging markets. But this opportunity does exist in Africa.”

Globally Renowned Speakers and Panelists

“Speakers at the conference will be talking about their experiences as investors,” says Berhe, and the line-up is indeed an impressive one.


“Sub-Saharan Africa is a second once-in-a-lifetime opportunity.”

Jim O’Neill, the Head of Global Economic Research at Goldman Sachs and who first coined the acronym BRIC for the new emerging markets of Brazil, Russia, India and China, will be addressing the role Africa can play in future investment strategies.

Discussion panels will feature some of the biggest private equity investors, including Sheikh Mohammed Hussein Ali Al-Amoudi and Thomas Gibian, CEO of Emerging Capital Partners.

Another highlight of the conference is the keynote speech which will be delivered by Joaquim Chissano, former President of Mozambique and the recipient of the inaugural award for Good Governance established by Mo Ibrahim.

Also speaking will be Stephen Jennings, whose company Renaissance Group has announced its intention to open investment banks across Africa, and who will be addressing the topic of opportunities for private equity in Africa. It was Jennings, who was reported by Bloomberg as saying that “while Russia was a once-in-a-lifetime opportunity, sub-Saharan Africa is a second once-in-a-lifetime opportunity.”

The Africa Investment and Finance Conference promises to be an informative and unique opportunity to hear from leading financiers and investors, says Berhe. “The African Investment and Finance Conference is a must-attend event for anyone who is likely to be sourcing or seeking capital from the global investor community for Africa.”

For further details about the conference and information on how to register:  www.africaif.com

An international conference on investment in Africa puts the spotlight on the Diaspora

Over 200 people gathered in London in November 2004 for the Africa Diaspora Investment Forum, held under the auspices of the African Business Roundtable and the NEPAD Business Group.
Sub-titled "Tapping and Unlocking the $45billion investment of the African Diaspora", the aim of the event was to create links and increase awareness by the African Diaspora of the various investment opportunities available to them in Africa.

Africans outside Africa have increasingly become a recognised force for the development of their countries of origin. In 2003 over $300 billion is estimated to have been sent from developed to developing countries, with remittances to Africa, through formal and informal channels, estimated at approximately $45 billion.


Remittances from the Diaspora are the second largest source of external funding for developing countries after foreign direct investment. Recognition of the African Diaspora as a partner for building sustainable capacity in Africa has highlighted the need for more investment vehicles to enable some of this external wealth to be invested. To date, key obstacles to investment in Africa have been the lack of links between the Diaspora and the continent and little awareness by Africans outside the continent of the various investment opportunities in Africa.

The Conference was opened by Dr Okereke Onyuike, Director General of the Nigeria Stock Exchange and Chairman of the Africa Stock Exchange Association (ASEA). 

The agenda also included presentations from Nicholas Okoye of the Nigeria Stock Exchange, Simon Rutega of the Uganda Securities Exchange, Michael Opagi of the Ministry of Finance in Uganda and Barbara James, Director of African Investment Advisory (UK). 
Plenary sessions were followed by workshops where participants were able to examine avenues and strategies for investing in SME’s, the African stock markets, property and financial flows in more depth.

The Forum, organised in partnership with Africa Recruit and BEN TV, was sponsored by a range of organisations including Western Union, the Nigeria Stock Exchange, the Kenya Post Office Savings Bank, Standard Chartered Bank and ASEA.

ImageFollowing South Africa’s successful hosting of the first International Media Forum, John Battersby highlights the media’s role in changing the face of Africa


By this time next year, global perceptions of Africa could be changing radically as two major new international television stations project a different image of the continent and provide African viewers with a global context to better understand global forces and seek advantage for the continent in trade, investment and tourism

The two new stations – CNBC Africa and Al Jazeera International which are both set to go live in the next 6 months or so – will intensify the media spotlight on Africa at a time when the northern hemisphere view of the world is being increasingly challenged by economic realities and reforms at the United Nations and multilateral institutions.

South-South Co-operation now an Economic Reality

A recent cover story in the influential Economist pointed out that the developing world now accounts for more than 50% of global economic output measured in purchasing-power parity. The rise of major industrialising developing powers – such as China, India, Brazil, Mexico, South Korea and Turkey – have prompted reforms at the UN, IMF and World Bank as the global centre of gravity shifts closer to the developing countries.

ImageMajor corporations in the developing countries – such as India’s Tata Industries and South Africa’s SABMiller – now account for more than a third of all foreign direct investment in the developing world.

South-south co-operation is no longer a political slogan – it has become an economic reality. Increasingly, global economic growth depends on the economic growth of developing countries.

In recognition of these new realities – and the emergence of Africa as a major trade and investment partner of China and the new developing powers – CNBC, the global business TV leader, is set to open a 24-hour Africa business channel by mid-2007 with an initial investment of R190-million $25-million)

24-Hour Africa Business Channel

CNBC Africa, an autonomous unit with its headquarters in Johannesburg and set to train a new generation of African financial journalists, will beam six hours of dedicated Africa programming each week day and will have correspondents in Cape Town, Nigeria, Kenya, Tanzania, Botswana and London. It will also incorporate its Asian, Middle Eastern and European services for its African viewers.

ImageZafar Siddiqi, chairman of CNBC Africa, said that the new service would address dysfunctional broadcasting policies between African countries, poor communications and inadequate marketing on the continent
and an over- sensationalisation of news.

“We will set a new standard in broadcasting on the continent that will spur others… we will work closely with all broadcasters around Africa,” Siddiqi told the first International Media Forum in Johannesburg.

The Forum, which was partnered by the International Marketing Council of South Africa, sought to promote a dialogue between international media and South Africans about mutual perceptions of the country and the African continent.

Al Jazeera International in Africa

Al Jazeera International, a new English-language station spawned by the successful Qatar-based Arabic station serving the Middle East, is due to go live before the end of the year with a 24-hour global news service with five bureaux in Africa.

Al Jazeera has hired some of the top names in British journalism including the legendary interviewer David Frost and former BBC heavyweight Nigel Parsons who heads the station. It seeks to portray global news from a centre of gravity which lies outside of the industrialised world and will portray global news from a developing world perspective thus reflecting the new global realities.

“We will set out to normalise news coverage in Africa,” said Andrew Simmonds, Al Jazeera International’s Africa bureau chief who attended the Forum.

The renewed interest in Africa is being driven by a confluence of forces: increased global interest in Africa’s rich resources – particularly oil and steel – the rapid rise of the continent as a destination for Chinese and Indian investment and trade, major growth in South African investment in Africa and a deeper understanding of the link between terrorism, poverty and failed states.

The First International Media Forum

Delegates to the International Media Forum heard a succession of influential speakers representing the world’s leading news organisations – CNBC, CNN, Al Jazeera, the Wall Street Journal, BBC, Dow Jones Newswires, Reuters and Africa Confidential – sketch the news global realities and the rising importance of Africa in a globalised world.

The messages that come through repeatedly were that news organisations are driven by what their readers and subscribers want – rather than focussing on either negative or positive news – that there is no built-in bias towards Africa, and that African countries and companies need to develop better communication strategies to compete in the global market place if ideas and enterprises.

Minister in the Presidency Essop Pahad, who spoke at the conference, welcomed the tone of speeches from the international editors and suggested that South Africans should revisit the view that the global media was a monolithic block that sought to marginalise the continent and entrench negative stereotypes.

“We cannot simply dismiss negative reportage as the product of the racist or the colonial mindset nor must we paint all reporters with the same brush,” he said. “We also need to be more open to investigative journalism.”

Randy Walerius, London-based Africa and Middle East Editor at Dow Jones Newswires, said that the slogan and driving force of his news organisation was: “news to profit by”. “We don’t look at news as positive or negative,” he said. ”It’s whether the news offers news (for readers and subscribers) to profit by.”

Themba Maseko, the new director-general of the Government Communications and Information Systems (GCIS), presented government’s new communications strategy which sought to correct perceptions by clear and repeated communication of government policy and its achievements and he promised better access for journalists.

Challenging Perceptions

The Forum kicked off an overdue debate between the international media and South African stakeholders in business and communications about differing domestic and international perceptions of South Africa and the importance of open and clear communication to promote good governance and economic transparency.

South Africa’s challenge is to ensure that, just as opportunities open up for Africa and South Africa with changing international perceptions, we have not become prisoners to our own stereotypes that global opinion is biased against us and always looking to reinforce the negative.

It is time to open ourselves to international scrutiny and put our case more convincingly and more professionally.

John Battersby is the UK Country Manager of the International Marketing Council of South Africa based in London. He recently accompanied a group of leading international journalists, editors and managers on a visit to South Africa to attend the first International Media Forum

ImageCape Town is more than just a popular holiday destination for those who crave sunshine in the depths of the northern winter: it’s also making a credible bid to become an alternative to India for call centres and other outsourced business processes

‘Calling the Cape’

“For many unemployed young South Africans working in a call centre is a critical and highly coveted step into the formal job market,” says Luke Mills of promotion agency Calling the Cape. “The manufacturing sector in the Western Cape is declining and many young people face a lifetime of unemployment relieved by occasional spells of domestic or manual labour.Unlike in Europe, call centre jobs in this context are a step up.”

One of the results of this job scarcity is that staff turnover or attrition rates are exceptionally low by international standards, having stayed around 14% for several years. In India, by comparison, attrition can be as high as 90% and the average call centre agent spends less than a year in each job.

Mills says Cape Town’s low attrition rates go a long way towards offsetting its slightly higher labour costs. “Our salaries are around 20% higher than in India or the Philippines, but their high attrition rates raise training and recruitment costs, as well as harming the quality of the work environment and customer service. And Cape Town’s labour costs are still less than half the UK’s.”

Cape Town’s traditional role as the hub of South Africa’s sophisticated financial service industry has also created a rich skills base, with over 13,000 agents being employed in the city. “The domestic call centre sector has roots going back to the late 1980s and is still accounts for nearly 80% of the industry,” says Mills. There are as a result, he says, levels of service and quality that are exceptionally high by global standards.

Success Stories

Mills says Budget Insurance, one of the first UK-based companies to set up a customer service call centre in Cape Town, has saved 35% of its UK costs while achieving a 30% productivity increase and equalling customer satisfaction levels.

More recently telecommunications giant Carphone Warehouse, which set up a Cape Town customer service centre in April 2006, managed to equal the performance of its UK counterparts within six weeks of going live.

More generally, the rate of “first call resolution” – an industry term referring to the number of customer queries resolved on first contact – is 89% in Cape Town, compared 66% in India.

Cape Town produces over 33,000 high school leavers and 15,000 each year. School leavers tend to have high-quality skills, with around 10-15% of those who apply for offshore positions being successful (compared to 3% in the Philippines). Many speak excellent English with an accent that is readily understood in Europe, and Afrikaans speakers have been successfully trained to work in Dutch-language call centres.

The cultural links between Cape Town and Europe, says Mills, are as important as the linguistic links. “The power of a shared cultural background and shared value system shouldn’t be underestimated,” he says. “Many European investors find it easier to do business here than in the East because we have a common set of assumptions as well as similar legal systems,” he says. “It also makes our agents better at conversation with clients based in the UK and Europe.”

Cost of Business

The telecommunications cost problems which until recently undermined these human resource advantages have largely gone, with international telephony costs falling by up to 85% since the deregulation of the Voice over IP (VoIP) market in February 2005. There are now a number of well-established and experienced VoIP service providers in the market and the costs of converged voice and data capability are now on a par with those of the world’s most competitive offshore markets.

Neotel, the country’s second fixed-line national network operator, finally launched in August 2006. Its entry to the market has already created significant downward pressure on prices in the increasingly competitive market for corporate voice and data services. Although consumers still pay more for broadband service than their counterparts in most developed nations, prices are dropping fast and a wide range of technological options is available.

The combination of government support, high-quality and competitively priced skills and sophisticated telecommunications and other infrastructure has seen Cape Town’s call centre industry double in size since 2003, and the rate of growth shows no sign of slowing down. One good sign is the number of outsourced service providers with local operations, including Merchants, Dialogue, CSC, DCM, IBM and CCN.

International companies with Cape Town call centres now include Admiral Insurance, ASDA, Barclays, British American Tobacco, Budget Insurance, Capital One, Carphone Warehouse, Shell and Emedia. Even Lufthansa has a telesales operation based in Cape Town: so booking a winter sunshine break could provide a good opportunity to evaluate the quality of Cape Town’s service.

Calling the Cape is a Section 21 company that promotes Cape Town and its surrounding areas as destinations for national and international investment in contact centres and business process outsourcing. Formed in 2001, Calling the Cape is funded by member contributions as well as by local and provincial governments.

Image“The BPO sector is not just the flavour of the month, but one which will help to move South Africa further up the value chain,” said Phumzile Mlambo-Ngcuka, South Africa’s Deputy President, as the country launches a major bid to market South Africa as a destination for business process outsourcing.

South Africa House in London was the setting for a recent Forum on the expanding Business Process Outsourcing sector in South Africa. A high-powered delegation of BPO industry experts from South Africa, led by the Deputy President, Phumzile Mlambo-Ngcuka, presented industry leaders in London with a strong business case for outsourcing to South Africa.

Following a welcome address by H.E. Lindiwe Mabuza, the South African High Commissioner to the United Kingdom, South Africa’s Minister of Trade and Industry, Mandisi Mpahlwa, presented a keynote address highlighting what he termed “South Africa’s value proposition for business process outsourcing.”

South Africa’s Value Proposition

While acknowledging that it takes time for a developing country to develop a track record, he pointed out that South Africa has more than risen to the challenge.

“South Africa has the largest economy in Africa, the most industrial development on the continent and the most educational and training institutions,” he said. “We have had 12 years of sound economic management and we have a growing economy which has yet to realize its full potential.”

Speaking of the country’s accelerated shared growth strategy, AsgiSA, the Minister noted that the BPO industry fits squarely within this context. South Africa already has a vibrant BPO industry with 70 operations and 80,000 people employed in contact centres and back offices. “We have a set of distinctive assets, a first call resolution higher than other lower cost destinations and a large, well-educated labour pool,” he said.

“We produce 300,000 school leavers and 100,000 graduates a year from world class universities and we have a low budget deficit, sound infrastructure and the cheapest electricity prices in the world.”

The Minister cited the benefits of South Africa’s highly attractive lifestyle which has encouraged the immigration of diverse nationalities and communities, offering a range of language capabilities that benefit the BPO sector.  With mature and established institutions in the banking, insurance and telecommunications sectors, South Africa already has the sound business foundation needed for high value outsourcing opportunities.

“South Africa is not necessarily competing with the cheapest, but it is comparable with many operations in the UK and Europe,” the Minister said.  “We can combine superior quality with high cost savings.”

Government Incentives

Key factors in South Africa's favour for attracting business process outsourcing are its time zone, which falls comfortably within European time zones, as well as the country's English-language capacity.

ImageTo boost the county’s competitiveness in business process outsourcing, the South African government has recently developed a 5 year plan for the expansion of the sector.  Working closely with industry, the plan aims to strengthen the industry through financial incentives for investment and through deepening the talent pool and creating up to 100,000 jobs.

“Substantial training assistance, a skills development programme and a learnership scheme will be made available to companies that locate their operations in South Africa,” said Mpahlwa. “Companies will get cash grants, tax deductions and the acquisition of work-ready talent.”

The Minister acknowledged that the cost of telecommunications is regarded with concern by the sector, adding that deregulation and the promotion of competition is the way forward to achieve lower prices and that a R.30 billion investment in Telkom over the next 5 years plus a BPO dispensation on pricing is in the pipeline.

Case Studies

“South Africa is at the centre of IBM’s new strategy,” said Mteto Nyati, Director of Global Technology Services for IBM in South Africa, presenting a case study of his company’s experience in offshoring to South Africa.

IBM has adopted a new business model, creating global shared services and centres of excellence in 7 strategic locations around the world, including South Africa, he said.

“South Africa is not a normal call centre but a highly technical environment where highly skilled people are managing complex IT issues,” said Nyati.  The company is now moving many of the high value services it provides to its clients which include household names such as Boots and ABN Amro, to South Africa where it currently employs over 1,500 staff.

A case study by Shell highlighted the quality of service provided by its operations in South Africa.“It’s not about cost reduction but about finding good value – although there are also cost benefits,” said Julian Davis, Shell’s Programme Director for Global Customer Services.

BPO is not just the ‘Flavour of the Month’

Deputy President Phumzile Mlambo-Ngcuka addressed the Forum and emphasized the Government’s programme for “removing entry barriers that we, as Government, are responsible for.”

“We have identified binding constraints and among the initiatives we have identified is the area of infrastructure; transport logistics and telecoms,” she said.  “We are addressing the costs and ensuring that in 3-5 year, South Africa will not be the same place as today for these services.”

The Deputy President pointed out that although South Africa has a population of 45 million, as a member of SADC, it offers access to a market of 200 million people. She reiterated the government’s commitment to work with industry and to avoid ‘stand-alone government’, referring to the Business Trust that has been set up as a joint venture between government and industry.Government incentives will help with developing talent to increase access to the labour pool in urban and rural areas, she said, and will ensure that the country remains internationally competitive.

“BPO is not just the flavour of the month,” she added, “but a sector which will help South Africa to move further up the value chain and become a knowledge economy.”

Quality of Customer Experience

ImageThe Forum ended with a panel discussion and open question session. Describing the question of talent as “one of the key drivers of the economy”, the Chief Director of Competitiveness Strategies in South Africa’s Department of Trade and Industry, Dr Ray Ngcobo, highlighted the financial incentives on offer for talent development.

Ngcobo described the ‘monyetla’ 6-month work-readiness programme that matriculates and new graduates are being offered.  Companies that recruit from this pool of talent will also receive tax rebates and grants for company specific training.  Urging companies to take advantage of the current ‘window of opportunity’, he added that a one-off investment grant of between R. 37,000 and 60,000 was also on offer.

The CEO of SACCCOM, the apex organisation for South Africa’s BPO sector, highlighted the quality offered by the South African workforce.  Mfanu Mfayela advised the delegates that in addition to a low attrition rate in the sector at around 11%, costs savings of about £11,000 per seat were possible in a company’s first year of business even before considering the Government’s incentives.

ImageOutsourcing to South Africa has proved a success to those companies that have made the move. As the country positions itself for a major lift-off in this sector, ReConnect Africa speaks to Mfanu Mfayela of SACCCOM about what South Africa has to offer the international business community.

SACCCOM, The South African Contact Centre Community, is the association responsible for the development of the Business Process outsourcing (BPO) industry in South Africa.

Established in February 2005, SACCCOM is led by Mfayela, a former engineer. The organisation aims to increase public understanding around the South African offering and actively markets South Africa as a BPO destination to the Chief Executives and decision-making levels of overseas businesses.Continuous brand building is also focused around a range of events and exhibitions relating to the sector

Marketing South Africa

SACCCOM markets the South Africa story and the country’s strong selling points for this industry sector; quality of service, similar time zones to the UK and Europe, developed infrastructure and the cultural affinity and the general knowledge and understanding of the UK and Europe by South Africans.

The global BPO industry looks set to grow by 50% a year over the next five years, resulting in growth estimated at between $90-100 billion. The UK is a key target market for SACCCOM’s member companies, who are pitching themselves in competition against British outsourcing companies rather than positioning themselves directly in competition against India, where the standard and cost of living is quite different.

“We benchmark against Europe, not against India”

“We generally do our analysis and benchmarking against the UK itself,” explains Mfanu Mfayela. “Even at double their current salaries, Indian salaries would only be equivalent to the basic level salary paid in South Africa as the cost of living in India is relatively low.”

But given India’s successful track record in business process outsourcing, what can South Africa learn from their success? Mfayela points out that rather than going through the same learning stages, South Africa has been able to work and build on India’s experiences to be able to do things better.

“As an association, we share experiences with India and advise our members on how India’s experiences can benefit them.”

Skills and the Sector

But how does the highly publicized skills shortage in South Africa impact on the BPO sector?  Mfayela is confident that in most areas the country already has the talent needed.  “The only thing we need to develop is more managerial talent at both the strategic and operational levels, if the industry grows as quickly as we think it will,” he says.

SACCCOM’s members have taken the issue of training on board and, as companies roll out contracts, they often recruit overseas management for short periods to enable management skills to be acquired by and transferred to South African staff.  Over time, this training will create the pool of managerial talent needed to support the industry’s expansion although, Mfayela admits, the need for international expertise does currently have an impact on the cost of contracts.

The South African Diaspora

South Africans living outside the country are of interest to SACCCOM’s objectives in two key ways, according to Mfayela.

“Firstly, we need South Africans abroad to represent us and to talk positively about us within their companies,” he says.  “Offshoring is mostly about perception and what someone thinks.  South Africans abroad are often highly placed within their companies and we want them to say ‘Let’s consider South Africa’ when it comes to this area of business activity.”

The skills of South Africans in the Diaspora are also a welcome source of support for the industry. The industry currently employs around 80,000 people and has about 600 operations in place.   “When deals come in, we want some of our skilled South Africans to come back and add value to the process,” adds Mfayela.

The industry is already proving one of interest to the South African community overseas and SACCCOM forwards CVs sent to them by prospective applicants to their member companies for action. In some cases, returning South African talent has already made an impact. For example, a South African who had been based in the UK for ten years now runs The Carphone Warehouse Company in Cape Town.

SACCCOM has plans to provide added support to its members in the area of talent development and to signpost interested job applicants to its member companies via its website.

Challenges for the Sector

The BPO industry in South Africa faces some challenges, both local and international and Mfayela notes that the country needs to create a conducive environment for the sector.

“The countries we compete with give incentives”, he says, citing the role of the Irish Government in promoting inward investment into Ireland. “Our challenge is to lobby government for acceptable incentives but our lobbying is bearing fruit.”

The other major challenge for the sector is brand awareness.  Ensuring that brand South Africa is equated with quality of service delivery is a key plank in the BPO sector’s strategy, says Mfayela.  “With increased brand awareness we can grow the industry and address socio-economic activities - and extend the sector beyond Johannesburg, Durban and Cape Town.”

For further information about opportunities within the BPO sector in South Africa, contact info@sacccom.org.za

ImageThe launch of a new database aimed at Ghanaians living in the UK will offer crucial information on money transfer providers.

For Ghanaians living in the Diaspora, sending money back home to family and friends can be both expensive and risky.  An initiative launched by Profile Business Intelligence with the aid of the UK Department for International Development (DFID) aims to provide Ghanaians with information to make informed choices when sending remittances.

Remittances to Ghana

The launch of the Ghana leaflet and website took place in February at the Ghana High Commission in London.  Welcoming the delegation of Ghanaians and other guests to the launch, Mr. Adolphus Arthur, Ghana’s Deputy High Commissioner to the UK, highlighted the importance of remittances from non-resident Ghanaians to those at home.

Image“The ever increasing migration of Africans has its own dividends,” he said.  “Ghana has benefited enormously from her sons and daughters migrating to the UK.”  Pointing out that the number of Ghanaians in the UK has grown from around 10,000 in 1957 to the 2001 official census figure of 150,000, Mr. Arthur added that “the amount of money received in Ghana in remittances is impressive in its sheer scale.”

The benefits of remittances are many, he said.  “Remittances go straight to the grass roots; to pay for school fees, health and to invest in business.  Remittances don’t come with interest, like loans, so they go straight to the beneficiary.”

Global Impact of Remittances

ImageThe issue of remittances to developing economies was given impetus at the 2004 Sea Island G8 Summit when politicians publicly noted the importance of these contributions to countries.  While estimates of remittances vary, formal studies have suggested that approximately US$200 billion was remitted to developing countries in 2006, with estimates of informal flows seen as likely to be double this figure.  For many countries, these sums come second only to foreign direct investment (FDI) and, in some cases, surpass official aid.  They are often a crucial source of income to recipients and critical to their ability to pay for healthcare, education and other costs.

With over 2 million of its citizens overseas in the UK, USA, Africa and, increasingly, in Asia, remittance flows into Ghana are of major significance to the country’s economy.  According to Ghana’s President Kufuor, between 2001 and 2006, approximately US$7-8 billion was remitted into Ghana, while the Bank of Ghana has estimated remittances to be 15% of the country’s GDP.

The scale of these contributions has led to an increased recognition of the importance of Ghana’s Diaspora and has facilitated developments including the introduction of dual citizenship for Ghanaians and the right of non-resident Ghanaians to vote in Ghana’s elections.

Removing Barriers to Remittances

Speaking at the launch, Emmanuel Addy, Director of   Profile Business Intelligence, the company managing the ‘Sending Money Home’ project, stressed the desire of DFID and the Government of Ghana to encourage remittances by reducing the barriers of cost and security. 

“The reason for publishing the leaflets and producing the website is to make information about remittances as accessible and easy to understand as possible for those wishing to send money abroad,” he explained. “The website is aimed at Ghanaians living here in the UK and both the Ghanaian leaflet and the Ghanaian page on the website, contain crucial information on money transfer providers, their fees, speed of transfer, ID requirements and a number of other factors that affect people’s decisions when sending money home.”

The website is designed for consumers and is a practical tool which has already led to a reduction of 12.5% on the cost of sending remittances from the UK for the other countries featured on the website.

“There is always a choice on which service provider to use when sending money home and this information is available to assist those in making their decision,” Addy said.

Sending Money Home

Launched in March 2005, the ‘Sending Money Home’ project has produced and distributed over 600,000 community-specific information leaflets and booklets, many of which have been translated into the relevant languages.

The project provides detailed and comparative information on the range of products available for remitting money worldwide. To date, the company has provided information for various African communities in the UK, including the Kenyan, Nigerian, Rwandan and South African communities in the UK and for non-resident South Africans wishing to send money to Botswana, Lesotho, Malawi, Mozambique and Swaziland. www.sendmoneyhome.org

Image In the waiting area of a large office complex in Accra, Ghana, it's standing room only as citizens with bundles of cash line up to buy shares of a mutual fund that has yielded an average 60 percent annually for the past seven years. They're entrusting their hard-earned cash to a local company called Databank, which invests in stock markets in Ghana, Nigeria, Botswana and Kenya that consistently rank among the world's top growth markets.

Chances are you haven't read or heard anything about Databank in your daily newspaper or on the evening news, where the little coverage of Africa that's offered focuses almost exclusively on the negative -- the virulent spread of HIV/AIDS, genocide in Darfur and the chaos of Zimbabwe.

Yes, Africa is a land of wars, poverty and corruption. The situation in places like Darfur, Sudan, desperately cries out for more media attention and international action. But Africa is also a land of stock markets, high rises, Internet cafes and a growing middle class. This is the part of Africa that functions. And this Africa also needs media attention, if it's to have any chance of fully joining the global economy.

Africa's media image comes at a high cost, even, at the extreme, the cost of lives. Stories about hardship and tragedy aim to tug at our heartstrings, getting us to dig into our pockets or urge Congress to send more aid. But no country or region ever developed thanks to aid alone. Investment, and the job and wealth creation it generates, is the only road to lasting development. That's how China, India and the Asian Tigers did it.

The Ghana Stock Exchange regularly tops the list of high-performing stock markets

Yet while Africa, according to the U.S. government's Overseas Private Investment Corp., offers the highest return in the world on direct foreign investment, it attracts the least. Unless investors see the Africa that's worthy of investment, they won't put their money into it. And that lack of investment translates into job stagnation, continued poverty and limited access to education and health care.

Consider a few facts: The Ghana Stock Exchange regularly tops the list of the world's highest-performing stock markets. Botswana, with its A+ credit rating, boasts one of the highest per capita government savings rates in the world, topped only by Singapore and a handful of other fiscally prudent nations. Cell phones are making phenomenal profits on the continent. Brand-name companies like Coca-Cola, GM, Caterpillar and Citibank have invested in Africa for years and are quite bullish on the future.

The failure to show this side of Africa creates a one-dimensional caricature of a complex continent. Imagine if 9/11, the Oklahoma City bombing and school shootings were all that the rest of the world knew about America.

I recently produced a documentary on entrepreneurship and private enterprise in Africa. Throughout the year-long process, I came to realize how all of us in the media -- even those with a true love of the continent -- portray it in a way that's truly to its detriment.

The first cameraman I called to film the documentary laughed and said, "Business and Africa, aren't those contradictory terms?" The second got excited imagining heart-warming images of women's co-ops and market stalls brimming with rustic crafts. Several friends simply assumed I was doing a documentary on AIDS. After all, what else does one film in Africa?

The little-known fact is that businesses are thriving throughout Africa. With good governance and sound fiscal policies, countries like Botswana, Ghana, Uganda, Senegal and many more are bustling, their economies growing at surprisingly robust rates.

Private enterprise is not just limited to the well-behaved nations. You can't find a more war-ravaged land than Somalia, which has been without a central government for more than a decade. The big surprise? Private enterprise is flourishing. Mogadishu has the cheapest cell phone rates on the continent, mostly due to no government intervention. In the northern city of Hargeysa, the markets sell the latest satellite phone technology. The electricity works. When the state collapsed in 1991, the national airline went out of business. Today, there are five private carriers and price wars keep the cost of tickets down. This is not the Somalia you see in the media.

Obviously life there would be dramatically improved by good governance -- or even just some governance -- but it's also true that, through resilience and resourcefulness, Somalis have been able to create a functioning society.

Most African businesses suffer from an extreme lack of infrastructure, but the people I met were too determined to let this stop them. It just costs them more. Without reliable electricity, most businesses have to use generators. They have to dig bore-holes for a dependable water source. Telephone lines are notoriously out of service, but cell phones are filling the gap.

Throughout Africa, what I found was a private sector working hard to find African solutions to African problems. One example that will always stick in my mind is the CEO of Vodacom Congo, the largest cell phone company in that country. Alieu Conteh started his business while the civil war was still raging. With rebel troops closing in on the airport in Kinshasa, no foreign manufacturer would send in a cell phone tower, so Conteh got locals to collect scrap metal, which they welded together to build one. That tower still stands today.

Throughout Africa, what I found was a private sector working hard to find African solutions to African problems.

As I interviewed successful entrepreneurs, I was continually astounded by their ingenuity, creativity and steadfastness. These people are the future of the continent. They are the ones we should be talking to about how to move Africa forward. Instead, the media concentrates on victims or government officials, and as anyone who has worked in Africa knows, government is more often a part of the problem than of the solution.

When the foreign media descend on the latest crisis, the person they look to interview is invariably the foreign savior, an aid worker from the United States or Europe. African saviors are everywhere, delivering aid on the ground. But they don't seem to be in our cultural belief system. It's not just the media, either. Look at the literature put out by almost any nongovernmental organization. The better ones show images of smiling African children -- smiling because they have been helped by the NGO. The worst promote the extended-belly, flies-on-the-face cliche of Africa, hoping that the pain of seeing those images will fill their coffers. "We hawk poverty," one NGO worker admitted to me.

Last November, ABC's "Primetime Live" aired a special on Britain's Prince Harry and his work with AIDS children in Lesotho. The segment, titled "The Forgotten Kingdom: Prince Harry in Lesotho," painted the tiny nation as a desperate, desolate place. The program's message was clear: This helpless nation at last had a knight -- or prince -- in shining armor.

By the time the charity addresses came up at the end, you were ready to give, and that's good. Lesotho needs help with its AIDS problem. But would it really have hurt the story to add that this land-locked nation with few natural resources has jump-started its economy by aggressively courting foreign investment? The reality is that it's anything but a "forgotten kingdom," as a dramatic increase in exports has made it the top beneficiary of the African Growth and Opportunity Act (AGOA), a duty-free, quota-free U.S.-Africa trade agreement. More than 50,000 people have gotten jobs through the country's initiatives. Couldn't the program have portrayed an African country that was in need of assistance, but was neither helpless nor a victim?

Still the simplistic portrayals come. A recent episode of the popular NBC drama "Medical Investigation" was about an anthrax scare in Philadelphia. The source of the deadly spores? Some illegal immigrants from Africa playing their drums in a local market, unknowingly infecting innocent passersby. Typical: If it's a deadly disease, the scriptwriters make it come from Africa.

Most of the time, Africa is simply not on the map. The continent's booming stock markets are almost never mentioned in newspaper financial pages. How often is an African country -- apart, perhaps, from South Africa or Egypt or Morocco -- featured in a newspaper travel section? Even the listing of worldwide weather includes only a few African cities.

The result of this portrait is an Africa we can't relate to. It seems so foreign to us, so different and incomprehensible. Since we can't relate to it, we ignore it.

There are lots of reasons for the media's neglect of Africa: bean counters in the newsroom and the high cost of international coverage, the belief that American viewers aren't interested in international stories, and the infotainment of news. There's also journalists' reluctance to pursue so-called "positive stories." We all know that such stories don't win awards or get front-page, above-the-fold placement. But what's happening in Africa doesn't need to be cast in any special light. The Ghana Stock Exchange was the fastest-growing exchange in the world in 2003. That's not a "positive" story, that's news, just like reports on the London Stock Exchange. I imagine a lot of consumers would have found it newsworthy to learn where they could have made a 144 percent return on their money.

My independent film was made possible by funding from the World Bank, for which I am extremely grateful. But the bank wouldn't have had to step in if the media had been doing their job -- showing all Africans in all facets of their lives. In a business that's supposed to cover man-bites-dog stories, the idea that Africa doesn't work is a dog-bites-man story. If the media are really looking for news, they'd look at the ways that Africa, despite all the odds, does work.

Carol Pineau is a journalist who has specialized in Africa for more than a decade. She has reported for CNN, BBC, NPR, VOA, RFI and other major worldwide broadcasters. “Africa: Open for Business”, her first long-format documentary, screened at the Cannes Film Festival, where she was given the “African Vision Award” by Agoralumiere. She was a plenary speaker at the World Economics Forum and was honored at the US-Africa Business Summit. Ms. Pineau is the author of numerous articles as well as a book. She currently lives in Washington with her husband and daughter. capineau@aol.com

Image“The time has come for us to have a truly private sector owned, private sector run African investment bank. That is the vision of the AFC,” said Professor Chukwuma C. Soludo, Governor of the Central Bank of Nigeria, at the fundraising roadshow and launch of the Africa Finance Corporation.

“The Central Bank of Nigeria has taken the lead in promoting the African Finance Corporation,” said H.E. Dr. Christopher Kolade, welcoming guests in London to the first leg of the Africa Finance Corporation fundraising roadshow.

The event was organized to present information about the Africa Finance Corporation (AFC), an institution which the Central Bank Governor described as “a dream which came out of the realization of the huge gap Africa faces in financing itself out of its economic situation.”

The existing funding gap for key economic growth sectors and infrastructure in Africa presents significant opportunities for collaboration among African institutions in establishing a regional investment bank to bridge the funding gap.  The AFC is intended to reduce the dependence of domestic capacity on foreign financing and enable the growth of private sector businesses that can compete at a global level.

Africa Finance Corporation

The Africa Finance Corporation is a Nigerian dream but an African project, delegates were told.  The AFC – Africa’s equivalent to the World Bank’s private sector focused arm, the IFC – is intended to take off with US$1 billion in April 2007.  The institution will have its head office in Lagos, Nigeria, with branches in a number of other member states.  The focus of the AFC’s activities will include a full range of financial products including loans, guarantees, risk management products, equity participation in private-sector led projects and venture capital.  The AFC will also provide investment banking services including mergers and acquisitions, capital market activities, equity research and asset management.  Additionally, the institution will offer technical assistance and advisory services in support of private sector development in Africa. After its initial period of stewardship, the Central Bank of Nigeria intends to take a back seat and to enable equity contributors to run the institution.

The structure of the AFC is that of a private-public partnership in the first instance, said the Governor, with a minimum of 51% privately owned.  “The goal is to move to an institution that is 100% owned by the private sector,” he added.  Such is the support for this institution from Nigeria, he said, that while they expect share ownership to be oversubscribed, the Central Bank stands ready, if necessary, to meet any shortfall in the US$1 billion the institution is targeting for April.

Funding Projects for Growth

The AFC is being set up to provide funding for private sector led projects in key areas of economic development in Africa, Soludo said.  Against a positive growth outlook for the continent, increasing foreign direct investment – US$30 billion in 2005 - and strengthening local demand, the need for the AFC is critical.  Nigeria estimates its own growth at over 10% p.a. with huge opportunities for further expansion across sectors such as infrastructure, agriculture, oil and gas, telecoms and financial services.  Africa has 30% of the world’s mining reserves, Soludo said, yet it accounts for less than 10% of the world’s minerals markets. 

According to the Governor, typical funding sources in Africa today “are still a far cry from what is needed in Africa.”  Big ticket projects are in search of capital and, for the kind of transformation and massive investment Africa needs, “the funding gap is quite horrendous.”

Creating Accelerated Industrialisation

The vision of the AFC is an institution to “create accelerated industrialization and provide positive investment returns for shareholders”.  The AFC, Soludo said, “is not coming to supplant existing banks but to work in cooperation with them.  There will be enough room for everybody to play because the finance gap runs into tens of millions of dollars.”

Ownership of the AFC is intended to be broad, with predominantly private-sector ownership both in and out of Africa.  The institution will be managed by a highly professional Board, independent Non-Executive Directors and an experienced management team.  “Core banking principles and best practices will apply, as will ethical and high corporate governance,” the Governor announced.  “These are the building blocks from day one because we want it to compete – and possibly out-compete – with other sources of finance.”

Investing in Africa

With plans for a stock market listing of the AFC within 5 years, the Governor spoke of the groundswell of ownership interest. With a fundraising roadshow that will include London, New York, Johannesburg, Nairobi, Accra and Banjul, it is fully intended that the AFC commences operations in April.

The AFC has an authorised share capital of 2 billion ordinary shares of US$1 per share. It is intended that financial institutions in Africa, pension funds, institutional investors, independent Central Banks and high net worth private individuals take up ownership. For local investors, investment in the AFC, whose functional currency will be the US$, is projected to yield significant returns in a foreign currency denominated investment.

For the founders of the AFC, the bright economic prospects for Africa more than justify the need to establish an investment banking institution that will harness the continent’s evident potential to foster further economic growth for the benefit of its citizens.

Image“How are we going to re-brand Africa?” asked Wendy Luhabe, Chairman of the International Marketing Council of South Africa, in her address to the Ogilvy Africa Conference.

We publish the full text of her speech below.

Good evening, sister and brother propagandists.

What did she just call us, I hear you asking yourselves? Us? Propagandists?

A hundred years ago, there would have been no shame attached to being called a propagandist. The word propaganda had not yet been hijacked by the enemies of democracy. In some parts of the world, notably Latin America, propaganda still has a neutral sense. There it refers to commercial advertising.

Edward Bernays, the friend of Sigmund Freud who is considered by many to have been the father of public relations, was happy to call his art propaganda. He thought it was an important component of democracy. He even titled his groundbreaking 1928 book on PR "Propaganda".


Propaganda is a Latin word. It means “things that need to propagated or disseminated”. One the reason eggs and bacon is today synonymous with breakfast is that Bernays successfully propagated the idea that eggs and bacon were a healthy way to start the day.

He did that by getting a segment of society that commands universal respect – the medical profession - to endorse the benefits of a hearty breakfast. Then he promoted eggs and bacon as the quintessential hearty breakfast. This was before the discovery of cholesterol.

Gathered here this evening are some of the most talented practitioners of the art of propagating ideas in the world. And while you represent a great and diverse array of clients and interests, one of the most compelling questions that challenge all of us is: how can we do for Africa what Edward Bernays did for bacon and eggs?

How do we propagate the idea that Africa is an appetizing, energising and essential part of the world’s day?

The basic ingredients are coming together and the product is perhaps more saleable than it has ever been. Late last year, the World Bank reported that 2005 “may well have been the year when Africa turned the corner” from poverty and debt to prosperity and wealth.

A Changing Continent

Economic growth is picking up steam all over the continent. A growing number of countries, among them Senegal, Burkina Faso, Cameroon, Uganda and Ghana, is on course to cut poverty in half by 2010. Primary school enrollment and literacy rates are rising. In many countries, infant mortality is down. Macroeconomic indicators are improving, with inflation falling to historic lows, currencies stabilizing and fiscal deficits dropping, and foreign direct investment surging.

“How do we propagate the idea that Africa is an appetizing, energising and essential part of the world’s day?”

Democratic transfers of power are now the norm and the African Union is starting to stand fast against member governments who come to power through unconstitutional means. African conflicts may still grab headlines, but the truth is they are dwindling in number, largely as a result of the efforts of Africans themselves. And, having overtaken the Middle East as America’s largest source of oil imports, Africa is assuming unprecedented strategic importance.

Africa – Hollywood Style

Too little of this gets projected to the world at large. To the contrary, in the popular culture of the North, Africa remains a source of horror and pity. Consider Hollywood’s latest contribution. This year, two Oscar contenders painted Africa in the direst imaginable colors.

One, the Last King of Scotland, depicted the bloody rule of Idi Amin in stomach-turning detail. The other, Blood Diamonds, dealt graphically with the civil war in Sierra Leone, limb-severing and all.

The conflict in Sierra Leone is now over. Peace has been achieved. Idi Amin is long gone and Uganda has for years been seen as a model of post-conflict reconstruction and is now one of the fastest-growing economies in the world. But the distinction between past and present has also most certainly been lost on most filmgoers in the North.

Last year, of course, an African film made by Africans about Africa actually won an Oscar. But as justifiably proud as we were of Tsotsi’s success, its images were not ones we would necessarily have chosen to have seared into the minds of international audiences.

All these films deserve the accolades they’ve been getting as examples of the filmmaker’s art, but we have to be aware of how they feed pernicious stereotypes. In the same way, just we have to be aware of the messages cherished celebrities send when they come to Africa bearing gifts and professing love and compassion. Unwittingly or not, they tend to nourish the assumption that Africans are victims and incapable of looking after their own.

Africa in the Media

This assumption is also fed by the media. This is not because the media is malicious. Actually, the journalists who cover Africa for the world’s newspapers, radio and television are generally caring human beings with a strong regard for truth.

Most of them didn’t become journalists to fatten their bank accounts. Many entered their profession because they wanted to shine a light on what is wrong with the world with a view to helping get it fixed. That being the case, reporters and their editors are not going to spend a lot of time covering things that are working. The fact that South Africa has the lowest cost electricity in the world is not news. Power failures are.

By the same token, reporters are going to spend a lot of time with, and give voice to, people they see working to get things fixed. That is part of the reason NGO’s like Oxfam and Global Witness and Doctors Without Borders tend to be the primary sources for stories out of Africa. Another part is the reason is the journalists have a hard-wired distrust of authority, which is a good thing for democracy.

A lot of NGO’s do terrific and necessary work and make a genuine difference in people’s lives. But it’s a fact of life that they have to compete for resources to do their work, which leads, quite naturally, to their marketing the problems they seek to address. This marketing tends to drown out other more hopeful narratives about Africa and plays straight into Afro-pessimism.

Re-Branding Africa

How, in the face of all this, are we going to re-brand Africa?

One way we are not going to do it, is by assuming an angry and defensive attitude and attacking messengers, challenging their bona fides and being perpetually thin-skinned about criticism. All that will do is reinforce stereotypes.

ImageThe only media that consistently reports "good news" is the media in closed societies and closed societies tend to be the least successful in today’s world. We might do worse than to learn from the American cognitive linguist George Lakoff and what he has been trying to teach his country’s Democratic Party about framing its message to voters. In his book, "Don't Think of an Elephant", Lakoff makes the simple point that if you ask someone not to think of an elephant, an elephant is precisely what will leap into that person's mind. What this means is that when we talk to the world and tell it our story, we must use our own frame of reference, not the frame supplied by Afro-pessimism or existing stereotypes. If we start out defensively by confronting the Afro-pessimist or stereotypical viewpoint directly, we have conceded control of the frame.

Take the example of crime in this country. Government is talking about this issue in a reactive and defensive way, using the frame supplied by its critics. It needs to establish it own frame, a frame that gives people a sense of hope that crime is a problem that can, and will be dealt with. Instead we need to create a vision for what a safe, secure and successful country will resemble.

A good example of the approach I'm talking about is an article that appeared in the Financial Times last year by Jim Sutcliffe, the CEO of Old Mutual. He was worried about the way BEE was being seen by foreign investors. But instead of beginning his article by mentioning investor concerns, he created his own frame. Here’s how the article began:

"South Africa's drive to bring the long excluded majority of its people into the mainstream of its economic life is paying healthy dividends. It is pushing the growth rate – nearly 5 per cent in 2005 – onto a higher trajectory. It has helped the 12-year-old democracy move ahead of India as a destination for foreign direct investment. And it was a factor in the 47% total return on equities traded on the JSE last year.

Black Economic Empowerment

Broadly defined, the black economic empowerment (BEE) strategy hammered out between government and business is helping fuel an economic and social revolution as millions of South Africans start to enjoy disposable income and upward mobility for the first time in their lives. This is making South Africa both an exciting place to do business and one that holds the promise of long-term stability.

How real is the transformation? Consider this. Just over 20 years ago, South Africa’s most famous newspaper, the Rand Daily Mail, closed because its readership was increasingly black and of no interest to advertisers. Today, South Africa’s most successful newspaper is the Daily Sun, a three-year-old start-up targeted at the black working class. Its circulation is 450 000 and rising and advertisers are clamoring for space on its pages."

This is a great example of how we can all work to redefine Africa in the minds of the world. It’s about telling our story on our terms – and telling it truthfully and without trying to pretend that everything is perfect. Sutcliffe did go on to respond to concerns investors have about BEE, but not before establishing a whole new way of looking at the subject – a new frame - as a reason to invest and have faith in South Africa’s future.

Importantly, he told a concrete and unexpected story – the extraordinary success of the Daily Sun - to illustrate his case and help readers see South Africa in a new way. This is the way we have to start talking about our continent as a whole – as a region ripe with opportunity, a market 800 million strong, rich in resources, human and natural, and with huge pent up demand for goods and services. In short a great new frontier. Having established this frame, we can then build its credibility by being totally candid about the problems we still face.

Africa as the Opportunity Continent

Above all, we need to be armed with gripping stories that stick in people's minds. The way we perceive the world is shaped strongly by anecdote, and the more memorable stories we can tell that defy stereotype and illustrate the strengths and capacities of our continent's people, the more we will change mindsets. The more we demonstrate a country Alive With Possibility", the more we will create Afro Optimism.

There are great stories to tell, if we're willing to look for them and encourage people to tell. Story gathering is something we can't simply leave to the media which, for the reasons I've outlined, are not focused on our kind of story. There are or course exceptions, like the American filmmaker Carol Pineau, whose documentary, "Africa Open for Business", has been winning prizes and accolades around the world. In this film, Carol introduces to the world an extraordinary array entrepreneurs, from Pierre Sauvalle, founder and artistic director of Senegal-based Pictoon, the only animation design studio in Africa that produces television series and feature films, to-Adenike Ogunlesi, who owns and operates the "in" label in Nigeria in children's clothes, Ruff 'N' Tumble, to Mohammed Yassin Olad, who runs a thriving airline in the truly business environment of Somalia. She has another film on the same theme now in the works. We must do all we can to encourage this kind of work.

“There are great stories to tell, if we’re willing to look for them and encourage people to tell.”

Ultimately, as the article by Jim Sutcliffe and Edward Bernays with his pro-hearty breakfast doctors showed, very little beats credible third-party endorsers when it comes to selling a product or propagating an idea.

We need to get what Simon Gladwell has called the mavens, the connectors and the persuaders – the key players in dramatic shifts of public perception – to propagate the idea of Africa as the opportunity continent. This is a process about which there is a great deal of expertise in this room tonight. I am confident that we are close to the tipping point. Africa is on the move. Yes, there are huge challenges still to be confronted, and yes, movement is by no means uniform. But many of the challenges are really opportunities, if properly viewed and properly framed.

That is an idea Ogilvy and its supremely talented people can do much to propagate, and in fact, have a responsibility to do so.

Reproduced with the kind permission of the International Marketing Council of South Africa.

Zambia – Growing through Investment

Image“Zambia is a paradise in terms of investment,” Kenneth Konga, Zambia’s Minister of Commerce, Trade and Industry, said at a recent investment forum in London. The event brought a number of Zambia’s public sector and industry representatives to London to highlight business and investment opportunities.

The Zambia Investment Forum, supported by the Zambia High Commission, focused on the theme ‘Consolidating Economic Growth through Investment’ as it offered participants a detailed overview of the investment climate in Zambia and the range of industry sectors offering a high return on investment.

Hub of Regional Development

Zambia’s High Commissioner to the UK, Anderson Chibwa, welcomed delegates to the Forum, organised in association with Business Profile Intelligence.

“Many countries claim to be the hub of regional development,” he said in his introduction. “Few can make a stronger claim than Zambia, whose geographical location in SADC (Southern African Development Community) provides direct strategic connections by road, railways and telecommunications to eight of the fourteen countries in the regional body.” In the trade sector, he said, “the central position of Zambia in southern Africa, gives it the unique advantage of expanding markets to the north, east west and south where vast opportunities lie for various goods and services.”

In 1992, Zambia embarked on a series of market orientated reforms to liberalise the economy. With growing investor confidence, Zambia is entering a new phase where it seeks to consolidate the economic gains of the past five years and the country’s Minister of Finance, Hon. Ng’andu Magande, presented a paper outlining his Government’s efforts to strengthen the investment climate in Zambia.

Zambia’s Economy

High copper prices on the world markets throughout 2006, in addition to unprecedented debt cancellations, gave Zambia the stimulus needed to create opportunities for inward investment. The increased economic stability has served to reduce inflation in the country and to accelerate economic growth to nearly 6% from 5% recorded in 2005. The Zambian Government’s budget for 2007, while giving a measure of tax relief to lower earning Zambians, saw an increase in royalty and tax rates for new entrants into the mining sector as well as a new 3% advance tax on commercial importers.

Potentially one of Africa’s richest countries, Zambia’s economic outlook in 2007 remains very positive, with new investment in mining and infrastructure likely to create even more benefits for the country.

“Zambia is a paradise in terms of investment.”

While the mining sector still holds a dominant position in the country, other sectors also offer good prospects for investment, including commercial agriculture, export processing and water management.

Investment Forum

The Forum included an impressive line-up of Ministers, while Managing Directors and senior representatives of leading banks in the country and of Zambia’s copper mining industry, farming, telecoms and tourism sectors also delivered presentations and case studies.

The country’s economy was described as ‘young, dynamic and evolving’ and on the verge of attaining middle-income status. The Zambian Government sees its role as fostering private sector development and creating a climate conducive to investment.

“Over the past 15 years, Zambia has moved from a closed planned economy to a liberal and open one,” Konga said. “The private sector is increasingly recognised as the engine of growth for Zambia’s economy and government has taken a shift in its policies accordingly.” Its objective of developing an open and competitive industrial economy was underlined by the Commerce, Trade and Industry Minister.

“Zambia has signed a number of treaties with other countries to protect investors,” he said. “This Government is pro-business and we want to assure all investors that your money is risk-free.”

Zambia’s geographical strategic advantage was a point also noted by Maxwell Mutale of Vedanta, a fast-growing FTSE 100 metals and mining group. “Zambia has plentiful labour with high levels of literacy and an expanding economy with generous incentives for investment,” he added


Economist John Fynn of the Zambia National Farmers Union outlined the investment potential of Zambia’s agricultural industry as it moves from traditional commercial farms based on maize, beef and tobacco.

“Infrastructure now provides scope for expanding exports of raw and processed products and there is an untapped demand and unfulfilled markets in Zambia and neighbouring countries,” he said.

Flowers account for a significant and growing percentage of Zambia’s exports and the country has comparable advantages in availability of land and water, making it well suited to compete in the growth of high quality Arabica coffee production. Cotton offers opportunities for seed production in the commercial sector, he said, while Zambian tobacco is highly regarded and in massive demand from China and the West.

“Zambia makes good business sense.”

Fynn pointed out that Zambia has the highest sugar yield potential in the world which, combined with available land, labour and water, offers high export potential for high-quality sugar production. Beef production, poultry and pork processing also offer significant investment potential.

With neighbours including countries like Botswana, Namibia, Mozambique and Angola, Zambia’s access to these markets, while offering one of the cheapest power tariffs in the region, place it high on the list of investment destinations. In the words of Fynn, “Zambia makes good business sense.”

When Africa Means Business

ImageNow in its 15th year, the Wharton Africa Business Forum (WABF) is expected to bring together in November over five hundred business leaders, investors, academics and students to learn about the rapid transformation of Africa’s business and political environment, network and develop business relationships.

The Wharton Africa Business Forum is an integral component of the Wharton Global Business Forum, the pre-eminent business school event addressing the major economic, social and political trends affecting Africa, Asia, Europe, India and Latin America. The WABF has become the leading conference on business in Africa at business schools. The 2007 edition will host an exciting gathering of professionals, dignitaries and experts on investment, trade or development, many of whom are recognized across the globe for their entrepreneurial and leadership achievements.

Africa Rising: The New Dawn of Trade and Investment

Under the theme ‘Africa Rising: The New Dawn of Trade and Investment’ the approach of this year’s Forum is aimed at identifying viable and attractive areas for investment and trade with Africa.

ImageWithin the context of discussion about business opportunities, the changing economic and geo-political landscapes, and examples of success stories, panelists and speakers will share their views on Africa’s future and discuss their vision for the continent.  The 2007 WABF keynote speakers include Mandé Sidibé, Chairman of pan-African banking group Ecobank, Yibrah Tesfazghi, GE President & Corporate Regional Executive for Africa, Akere Muna, Vice-Chair of Transparency International and a Member of the African Union Audit Commission and Euvin Naidoo, President and Chief Executive Officer of the South African Chamber of Commerce in America

The speakers, who include successful global leaders in charge of multi-billion dollars organizations, have substantial investment in Africa and represent diverse regions of the continent.  With their proven business experience, the speakers offer what the organizers describe as ‘a unique vantage point to understand the 53 countries continent of Africa which accounts for 20% of the world’s population.’

Moving Beyond the Myth

A key objective of the Business Forum, says Victor Petenkemani, WABF 2007 Chairman, MBA/MA Class of 2008, is to create awareness of Africa.  “We want to move beyond the myth to uncovering the truth. We need a story of Africa by Africans who best know their continent. Africa is a fast changing continent for the better.”

From 1999 to 2005, 34% of African countries had annual GDP growth of 4.5% or above. Against a backdrop of high commodities prices and the implementation of increasingly sound macro economic reforms, Foreign Direct Investments into Africa have reached unprecedented levels, with an estimated net inflow of $40 billion in 2005.

“As the premier business school in the world, Wharton has invaluable links with the investment community and can facilitate African entrepreneurs’ access to capital.”


“Investment is returning and it is more diverse with the increased presence from China, India and the United States,” says Petenkemani.  “There are huge natural resources that can be used to jump start African economies and we want to leverage the Wharton Brand and to reach out to the investment community.”

Promoting Entrepreneurship – The Business Pitch

Another key objective for the organizers is to promote entrepreneurship as a solution to development.  The Business Forum is providing a platform for future entrepreneurs with prospective African ventures to present their ideas to participating financing institutions that already invest in Africa. Pre-selected applicants to the Business Pitch contest will have the unique opportunity to pitch their business idea to participating Banks, Venture Capitals, and Private Equity firms.

“As the premier business school in the world, Wharton has invaluable links with the investment community and can facilitate African entrepreneurs’ access to capital for new ventures, business expansion or trade development into new markets,” says Petenkemani. “Pitching is an important technique entrepreneurs must acquire to quickly impress venture capital and private equity in the real world.  Those who succeed can effectively raise the capital needed for the development of their venture.”

The Forum will provide a setting for networking with leading figures from the business community while a Career Fair will run alongside the main event, enabling conference participants to meet recruiting sponsors and participating recruiters. For prospective students to Wharton, the Forum will aim to demystify the application process into Wharton Business School and provide a unique insight in applying and gaining admission into Wharton.

Making a Difference

The Organising Committee is in no doubt that the Business Forum will have a positive impact.  “The event will make a difference because of the incredible awareness it creates,” says Petenkemani.  “The Wharton Brand is extremely powerful in the investment community as Wharton is the reference on the street for educating top business professionals.”

By matching investors to entrepreneurs and demystifying the process, the organizers believe that the Forum will teach African entrepreneurs how to reach out to raise the money they need. “There is plenty of capital out there looking for great ideas, whether for small or big businesses.”

“The Forum will benefit a wide range of participants,” adds Petenkemani.  “Students, prospective students, professionals, investors, career seekers and entrepreneurs will gain something from attending.  We also invite corporations to attend because Africa is a fast growing emerging market of 900 million people, rising to 1.4 billion by 2040.  We invite everyone to join us on November 10 to witness, contribute and learn from great minds about the business opportunities that Africa possesses.”

Participants can register at:

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