Many business people still regard Africa the “last investment frontier”, even though oil and commodity prices and emerging market currencies have recently come under pressure. According to figures cited at this year’s World Economic Forum (WEF) on Africa, seven of the 10 fastest growing economies in the world are in Africa and it remains a promising investment destination.
“Africa has more or less 60% of the world’s arable land, 42% of its natural resources and 640 million people under the age of 24, which can all count in our favour,” says Frik Landman, CEO of USB-ED, a leadership development entity that forms part of the University of Stellenbosch Business School (USB).
USB-ED has extricated itself from the USB’s MBA-course and started focusing on executive and leadership development and management consulting. The institution replicated its South African academic model and has established similar ones in 14 countries on the continent.
Landman’s involvement with USB-ED’s expansion into Africa, has deepened his understanding of the continent and its people. “Essentially there are three forces at work in Africa – the public sector, the private sector and civil society – what we call the ‘golden triangle’.”
Unfortunately, the three entities in this triangle tend to operate in isolation, says Landman, and so many opportunities could be unlocked if they’d rather function in unison. “The existence of a business management school like USB-ED can play a big role in fixing the working in silos though, as we have convening power. We can bring the three role players together as opposed to just focusing on the private sector as traditional business schools have inclined to do over the years,” he says.
“We’ve formed networks with various non-government organisations and even churches to expand our reach on the continent and it has paid off.”
Landman and his team are in the process of establishing “knowledge nodes” in five regions on the continent – South Africa, the Sadc region, as well as East, Central and West through which business, management and leadership knowledge can be shared.
Like other thought leaders Landman laments the fact that Africans are among the poorest people in the world, despite the continent’s incredible riches. “The problem is that Africa hasn’t been able to convert its natural resources to the benefit of its inhabitants, but I believe we can start unlocking potential by cultivating leadership and management skills on the continent. When people have these qualities they can start breaking out of poverty.”
Apart from creating visionary leaders and managers on the continent, Landman also believes Africa needs a common ethos. “We need to have the same developmental goals and all countries need to agree on it,” says Landman, “but I don’t think it’s currently there.
“We have numerous initiatives for sustainability for example, but it’s too fragmented, partly because of cultural and languages differences. But a common development ethos on which there is broad agreement will be the glue that binds Africa’s more than 55 countries together across borders, trade blocs and diversity,” Landman says.
This article originally appeared in Finweek and is shared with their permission.
Landman has the following advice for South African investors who want to start businesses in other African countries:
- Do your homework and pay a visit to your potential investment destination. What works in one country doesn’t necessarily work in another, even though you may be convinced that there is definitely a market for your product or service.
- Be adaptable and culturally sensitive. One way to address cultural diversity is to get local people on board in your business as they will know the language and customs.
- Make provision for infrastructure challenges, such as poor roads, that may hamper business operations.
- Put your own financial systems in place, as getting funding and transferring money in Africa are unpredictable.
- Consider entering the economy through the informal sector – this is where the opportunities are. According to the African Development Bank, nine in 10 rural and urban workers in Africa are employed in the informal sector.