How changing attitudes can overcome the challenges of doing business in Africa

Changing the way we think about doing business in Africa is vital for those who want to succeed there.  This was the key message delivered by successful African entrepreneurs at the London Business School Africa Day conference which highlighted the challenges and rewards for entrepreneurs in Africa

The premise of this one-day event was that entrepreneurship and innovation must play a pivotal role in empowering Africans to take charge of their destiny.  The 2006 Africa Day set out to identify tangible approaches and programmes to develop African’s entrepreneurial potential. 

With the theme ‘A Vision for Empowering an Enterprising People’, the fifth event held by one of world’s leading business schools saw an array of speakers that included African entrepreneurs from diverse sectors such as broadcasting, finance and publishing as well as representatives of investment and financial institutions active in Africa. 

The keynote speaker, Baroness Valerie Amos, focused on the pivotal role the African Diaspora can play in promoting enterprise in Africa.

“I believe that the partnership between Africa and the wider Diaspora is the partnership that will really deliver the difference,” she said.  Speaking of the vital need for private enterprise to change the economies of Africa, the Leader of the British House of Lords noted that the focus of debate has moved from aid for Africa to boosting enterprise. 

She pointed out that the official $8 billion of remittances into Africa from Africans living outside the continent and informal estimates of $16 billion remitted through informal channels, gives the African Diaspora powerful leverage in assisting with entrepreneurial development. 

During her speech, Baroness Amos announced the setting up of an independent fund for Africa to be launched in Cape Town in May 2006. The fund will be managed by an independent Board and, with support from the African Union and Nepad, the $100 million fund is intended to encourage dialogue between business and government and to support African governments to create a positive environment for business.

Given its focus on enterprise, the conference included a series of presentations from African entrepreneurs who spoke candidly of the challenges they face in developing and building businesses in the continent.  Stressing that these challenges should not be seen as a deterrent by Africans in the Diaspora, Paul Fokam, the Cameroonian President of the Afriland First Bank, which he co-founded in 1987, pointed out that “it takes four years to get a banking license in China and yet, after six months, someone coming back home from the Diaspora says ‘I can’t continue in this environment’.”

A key theme of Bruce Ayonote’s session was the need for Africans considering investment in Africa to change their mindset and to adapt their view of reward to the local circumstances.  Describing the level of salary Africans educated abroad often expected as “unrealistic and unsustainable for a business”, Ayonote, the co-founder and Group CEO of Suburban Group, a Nigerian integrated telecommunications service provider, urged those listening to be less opportunist and transactional and more appreciative of the long term goals of business.

Stressing the need for applying social responsibility to enterprise in Africa, Ghanaian broadcaster George Twumasi, a driving force behind the establishment of the African Public Broadcasting Foundation, told the audience, “you need to look at opportunity through the context of social change.”

Chaired by award winning editor Anver Versi, the conference also included an Investors Circle session where senior executives from a number of leading banks and investors spoke frankly of the enormous investment potential of Africa today.

“Regardless of all the risks, the returns in Africa are higher”, said Tutu Agyare of Swiss investment bank, UBS.  “If hedge funds in the City of London can see the opportunities, we should all be investing.”    Arthur Arnold of the Dutch development agency, FMO, was equally blunt.  “If you’re not investing in Africa today, you’re missing the boat,” he said.

“Africa is changing” was the key message from Andrew Bainbridge, Barclays’ Managing Director with responsibility for the bank’s business portfolio in nine countries across Africa.  Bainbridge highlighted the importance of the small and medium sized enterprise (SME) sector, stating that it was only the development of this sector that would drive the 7% growth needed to attain the Millennium Development Goals.  Speaking of Barclays’ creation of Business Clubs in Africa to bring together business clients in order to provide advice and build business capacity, he acknowledged that “we need to provide the support mechanisms for enterprise to flourish.”

The conference ended with a presentation by Larry Drake II, CEO of Coca-Cola Nigeria and Equatorial Africa.  Touching on his experience of growing up as a poor African American, he outlined his company’s strategy in Africa and addressed some of the misconceptions of Coca-Cola’s role in Africa.

The conference, which was organised by the London Business School’s Africa Club, also saw the launch of the African Scholarship Fund which the School has established to provide scholarships to outstanding Africans wishing to study for an MBA.

For further information about contributing to the Africa Scholarship Fund, contact the London Business School or visit:
http://www.londonafricaclub.org/scholarship.htm