Foresight 2010

What do you think South Africa needs to do in 2010? (Aside from winning the World Cup).

That was the question that Judge Dennis Davis put to the panel at the GIBS annual “Foresight 2010” forum. A quick survey of the members of his jury presented a variety of bullish and bearish responses – as well as one too many “Pass” cards, and talk of creating rather than predicting the future. The optimists got cross-examined for being unrealistic, while the pessimists were lambasted for being vague.

To be fair, the Judge was right. For all the talk of needing values, accountability, active citizenship, public-private dialogue – what does that actually mean? When push came to shove, to state some concrete action that the government should do in 2010 nobody wanted to put their neck on the line. Which was – ironically – stated as part of the problem and why business avoided engaging in debate with government, by Brian Bruce, CEO, Murray & Roberts among others.

What we might agree on is that there needs to be a vision for South Africa. What I don’t agree with is that business and government should share one same vision. By their very natures they will diverge completely – their interests lie in different corners. Yes, there needs to be co-operation, whereby government facilitates business to reach its goal, but the friction between the two – and the role that citizens play across both – is what drives change, and hopefully progress.

Michael Jordaan, CEO, First National Bank, was one of the panellists who came back to the human resources that South Africa has – training and keeping talent. Without going into the debate around school and university education that they embarked upon, it is also a key theme emerging in the survey that africapractice is conducting of African businesses, opportunities and challenges for the year ahead.

Chief Rabbi Warren Goldstein took it one step further, talking about the importance of the human spirit, the need to have faith in people and their ability to deliver. However, he was also the one who addressed my question of what South Africa needs to do to improve the perception of the country abroad and attract foreign investment with a very swift and succinct response: “Crime”. How much faith does he have in the people committing the crime to stop, or the people set to stop it succeeding?

Wendy Luhabe, chancellor of the University of Johannesburg, had been the only one to reference the outside world (aside from mention of that old Global Economic Crisis, of course). What must foreign investors think of the lack of discourse and progress being made by the Government and Business Community in South Africa?
When push came to shove, and Judge Dennis insisted they give him an answer to what single step was needed, Bonang Mohale, chairman and VP, sales and operations, Shell, SA, said leadership, and repeated the old adage, "People get the leadership they deserve". I didn’t know that South Africa spends more per capita on education and healthcare than most countries in the world, but the results still point to failed leadership. Without government representation present, the panel represents some of the best business leadership the country has. If they can’t step up and take account for engaging government and civil society in the debate they talk about, then who can?

A thought provoking discussion, but one that brought up more questions than answers. Who will start the discourse? I can’t help thinking it will fall back to the media once again....

Things you might not know about Africa

The africapractice team had emails flying round in response to the question: What do people not know about Africa?

There are plenty of preconceptions and misconceptions about the continent, but here are a few of the facts and figures that came up last week:

• Seven countries in Africa account for more than fifty per cent of the population (Nigeria, Ethiopia, DRC, SA, Tanzania, Kenya, Sudan)
• Africa holds about 10% of the world's proven oil reserves
• There are up to 100 million members of the African Diaspora
• The longest cable car in the world is in Nigeria
• South Africa sold $1.8 billion worth of cars to the US last year, putting us ahead of Sweden and Italy as suppliers to the US market
• Africa is most affected by climate change but only produces 3% of global emissions
• Approximately half the population of Africa is under the age of 18
• Kenya is one of only five countries in the world that generates more than 15% of their electricity from geothermal sources
• Africa is the fastest growing telecoms market in the world
• Nigeria has a population the sum of the thirty one smallest countries in Africa
• Only 4% of Africa's hydropower potential is utilised currently
• Rwanda is ranked first by the Inter-Parliamentary Union in terms of the percentage of female politicians in its lower chamber, with 56.3 percent.
• The largest cement plant in the world is being built in Nigeria
• South Africa is the first, and to date only, country to build nuclear weapons and then voluntarily dismantle its entire nuclear weapons programme
• Almost 50% of all African immigrants in the United States hold a college diploma
• In the mid 1990s, there were more phones in New York City than the whole of Africa. But if the growth curve in mobile devices in Africa continues, it is likely to surpass the United States in number of mobile consumers
• The city of Pretoria, in South Africa, has the second largest number of embassies in the world after Washington, D.C.

A list of facts won't change people's image of Africa in one go, but it's all part of a far richer picture then a lot of people realise exists.

World Bank report highlights downturn in growth and capital flows to SSA

On 22 June, the World Bank released its 2009 edition of Global Development Finance, in which the institution indicated that the world economy would shrink by 2.9% this year vs a 1.2% growth in developing countries. In this latter group, investment flows ebbed to $707bn in 2008, significantly down from the $1.2trn recorded in 2007.

In the case of Sub-Sahara Africa (SSA), the World Bank highlighted that the region had been hit hard by negative dynamics in external demand, plunging export prices, weaker remittances and tourism revenues, and sharply lower capital inflows. Growth in SSA is now seen at 1% in 2009, from 5.7% in 2006-08, although it should strengthen in 2H09 and may rebound to 3.7% in 2010 and 5.2% in 2011, respectively.

On World Bank data, the fastest growing economies in the region in 2009 include the Republic of Congo (7.4%), Malawi (6.6%), Ethiopia (6.0%), Rwanda (5.1%) and Uganda (5.0%), while six nations could experience a contraction in GDP growth (of which Seychelles' is estimated at -10.5%, Botswana -8.0%, and Angola -1.9%). Nigeria is forecast to expand 2.9%, in line with the IMF projection.

WEF: A Future Roadmap for Africa

The World Economic Forum in Cape Town last week brought together the public, private and non-governmental sector, as well as media and commentators on Africa.

Here, a final word on Africa’s Roadmap: From Crisis to Opportunity

• Maria Ramos, CEO, ABSA Group: If we can build world-class stadiums we can build schools and health centres. We have the capacity, just not the execution. Africa is only limited by its imagination.
• Graca Machel: Founder, Foundation for Community Development (Mozambique): We need to bring women and young people into the discussion. Women are more than half of emerging markets so must be part of the re-design of a world that equally belongs to them. They bring more than just numbers; but also entrepreneurship, talent, experience.
• Graham Mackay, CEO, SAB Miller: The reality is that business creates wealth. If we could get Africa to grow by 6-7% instead of 4-5% we could solve most of the issues that we have talked about here today.
• Soud Ba’alaway, executive chairman, Dubai Group: Africa needs to take risks. To realise opportunities and success you need more than plans, you need to execute. Africa is a land of opportunity and needs to celebrate its success stories.
• Jacob Zuma, President of South Africa: We need to look at improving the perception of doing business in Africa. Larger economies on the continent should play a bigger role, but smaller ones also need to be ready to work together. South Africa is very transparent – you know the good and the bad of being here as a business, but we will continue to invest in creating jobs and changing the economic landscape.
• Five key priorities for investment and participation:
  o Privatise education
  o Improve health
  o Combat crime
  o Rural development
  o Improve infrastructure

World Economic Forum and the New Global Economy

The World Economic Forum in Cape Town last week brought together the public, private and non-governmental sector, as well as media and commentators on Africa.

Despite the recession, the overall feeling was upbeat. Most conversations were framed within the current economic circumstances, but if I took one message away it was “Africa can do it, but we need less planning and more doing”.

Another theme was that the talent and capability exists already, the resources and the will. Africa needs to celebrate its success stories, to change international perceptions of the continent as a place to invest, as a destination of choice. But it’s easy to be positive in a room of 700 people who all feel the same way. My question is whether Africa believes in itself when faced with international pressure, when confronted with China or Brazil making its demands, or when trying to find a voice at the global negotiations table on climate change, for example.

I do also sometimes wonder what we would all talk about if there wasn’t a global financial crisis on. And what would be the trigger to inject investment into Africa’s infrastructure and tourism business if the continent had not won the opportunity to stage the FIFA 2010 World Cup finals. But while we do have both crisis and opportunity right here and now, there are some interesting discussions.

If you are a Twitter follower, check out #africa09 for a summary of things coming out.
Zaprio’s cartoon posted to Twitter - http://twitpic.com/7g9y3

A quick summary of some of the sessions I attended follow...

Africa and the New Global Economy

• Jacob Zuma, President of South Africa: The global economic crisis is being felt all over. Africa has its own way of response. Its own problems too, but we must do our best in the spirit of belief in a recovery. All economies become inward looking during a crisis, but we must avoid shutting others out.
• Kofi Annan, Co-Chair of WEF on Africa: We are facing a crisis of governance and a crisis of leadership, and need to restore it. Africa needs to be part of the solution by seeking to invest in infrastructure, education, health. We can’t ignore the needs of the poor, or any system we set up won’t last long.
• Ngozi Okonjo-Iweala, MD, World Bank: There is a short-term response, but also an opportunity for long-term development. To quote Hilary Clinton: “Don’t waste a good crisis.” We need to think about shape of the continent post-crisis, working things like climate change in to our solution. China has expressed an interest in Africa – are we crafting our own response or simply waiting for it to happen?
• Soud Ba’alawy, Executive chairman, Dubai Group: There is a misperception of Africa as high risk, it is a good investment destination. Africa needs to develop its own home-grown solution, using its resources, its young population, and to create an environment conducive for business.