In November 2012, the Institute of International Finance (IIF) reported that the African growth is not a dream but a reality due to the fact that the African economy has been in constant growth for a decade. All studies show that this year’s growth rate will be 6%.
According to the World Bank’s report Doing Business 2014 published in October 2013, ten African countries are among the “Top 100” countries with the best economic perspectives and facilities to invest (four of them are among the top 50). It should be noted that according to the report, no European Union country are among the top 10.
Other reports (BAD, PNUD, CEA) highlight the youth of the African population, market growth, the necessity for services and products for a growing middle class and the need for innovation for a new model of inclusive and sustainable economy.
There is much value to these macroeconomic markers, as one should not forget that most Western countries -considered until recently the engines of the world economy – are currently weak.
Africa’s improvement is due, among other reasons, to better governance; as opposed to what people imagine, currently only 5 out of 54 African countries are dictatorships. The African economic unity is still far from the European one but plans have started to shape, as for example, the Africa 2063 plan for the improvement of the connections among African countries.
Western countries keep subsidising programs to help development, which in five decades have served all purposes except development. China and generally all Asian countries – especially Korea, Taiwan, Japan and India, but also countries like Bangladesh – strive for an egalitarian relationship with African countries and businesses, something the Anglo-Saxons call a win to win.
On the other hand, sociocultural barriers and administrative hindrances are nowadays a big obstacle for African entrepreneurs and their new world partners. We should ask ourselves whether these obstacles are insurmountable. The answer is absolutely not. Communications between Europe and Africa have improved substantially, countries are much more stable and the previous study and knowledge of the country give managers a less traumatic adaptation. In addition, executive training in European business schools allow the creation of local teams, which facilitate business with local companies. Moreover, for a Spaniard, the selection of countries in the Portuguese area of influence will make for a much faster adaptation.
Another common mistake when analysing Africa’s potential is to put all countries in one bag. Today, Angola, Ghana, South Africa, Cameroun, Ivory Coast, Benin, Botswana or Namibia are stable countries and with GDP growth similar to China or India. So much so that in 2011, Jim O’neill included South Africa in the group of emerging economies, coining the acronym BRICS. In these countries, sectors like agriculture, education, healthcare or infrastructures hold a very important development potential.
In some countries, certain sectors are already mature such as for example tourism in Kenya, Tanzania and, since recent times, Sudan. Why would Africa not take off in other sectors and other countries? Why can far away China negotiate in Africa and the close-by Europe cannot? The decision lies in our hands as in Africa everything is up for proposals and ideas.
Divaika Kiemba Dina
Coordinator for African in Adminex and President of Centre Euro Africa