Africa: No Longer a Single Story

By Obiageli K. Ezekwesili
Vice President, Africa Region
The World Bank

Presented at the
Diageo Africa Business Reporting Awards 2010
London
July 1, 2010

Introduction:

Thank you Paul for your kind introduction.  I am really pleased to have been invited to deliver this keynote address at the 2010 Diageo Africa Business Reporting Awards.  But first I must thank Diageo for its efforts over the past 6 years to draw the link between business and development; and of course the crucial role that the media plays in that process.  It is very gratifying that amongst the nominees today are entries from African journalists – an indication of not just increased capacity but also the increasing role of the private sector as enablers of growth in the continent.

Africa – No Longer a Single Story:

Africa’s story is a complex one.   One view could be from the lens of a continent that has been smeared with civil wars, military take-over, armed insurrections and genocide.  Another view however could be an Africa that has made giant strides towards a more open society; free elections and successful economic development strategies with beneficial outcomes to its citizens. And one that has become a veritable destination for investment and increasingly open to business.

This changing perception no doubt is also fuelled by the  numerous success stories from Mali’s mango exports and Nigeria’s “Nollywood”, to Rwanda’s gorilla tourism and to Kenya’s cut flowers—stories that paint a robust picture of a continent that is clearly on the move.

It is obvious that the African media – as much as the international media, needs to be part of changing the perception of Africa, by bringing to a wider audience the stories of a continent that is no longer just about potential – a continent that is far from being just a destination for charity and aid; a continent with a large and mainly untapped market, offering excellent investment returns and diverse opportunities.

An eminent businessman once said “profit lies where the gap between perception and reality is greatest.”  I believe that place is Africa. My objective here today is partly to quickly tell why I strongly believe so.

My aim is also to briefly highlight the current trends we see coming out of Africa.

Africa, south of the Sahara, today faces its brightest prospects in a generation.  Before dismissing this statement as yet another belied optimistic forecast, consider the following facts:

• Before the onset of the global financial crisis of 2008-9 that morphed into an economic crisis, African economies were growing at 5 percent a year for over a decade, accelerating to over 6 percent for the last three years.
• Growth was widespread, with 22 non-oil-exporting countries sustaining better-than-four-percent growth for over a decade.
• Poverty was declining by about one percentage point a year—a rate faster than in India.
• Child mortality rates fell by 25 percent in four years in about 13 countries and across the continent, the fight against the HIV/AIDS scourge is gaining mileage.
• Over 60 percent of Africans (and 80 percent of urban Africans) are in range of a GSM signal making mobile phones the most prized asset of the poor.

All these culminate in an Africa that is perhaps at about the same point now as where India was 20 years ago and where China was 30 years ago… just before their economic boom set in. 
The prospects for the future are very bright. Here are the reasons why.

First, the interrelatedness of social and demographic changes would create new domestic engines of growth. Key among these will be urbanization, an expanding labor force, and the rise of the middle-class African consumer.  In 1980, just 28 percent of Africans lived in cities.  Today, 40 percent of the continent’s one billion people do—a proportion roughly comparable to China’s and larger than India’s.  By 2030, that share is projected to rise to 50 percent, and Africa’s top 18 cities will have a combined spending power of $1.3 trillion. 

Meanwhile, Africa’s labor force is expanding, in contrast to what’s happening in much of the rest of the world. The continent has more than 500 million people of working age. By 2040, their number is projected to exceed 1.1 billion—more than in China or India—lifting GDP growth.

Second, the advent of ICT has been critical to the development of the economies in Africa and has become the source of more than $60 billion in private investments between 1998 and 2008.  It has not only helped to bridge the knowledge gap between Africa and rest of the world, it has also offered transformational opportunities by enabling access to finance; and enhancing the dynamism and efficiency of the markets.  Kenya’s M-Pesa is one of the most successful examples, with $1.96 million transferred through M-Pesa each day. One can only imagine the potential of 450m children growing up with a mobile phone in their back pocket – that’s more than the US, Canada and Mexico combined.

Thirdly, the continent accounts for more than one-quarter of the world’s arable land. And the fact that it only currently generates only 10 percent of global agricultural output implies that there is huge potential for growth in a sector now expanding only moderately, at a rate of 2 to 5 percent a year. 

Finally, we have tourism and how can we speak about tourism without mentioning the 2010 FIFA World Cup – approaching the final in South Africa as we speak! This is a tremendous example of what Africa has to offer the world.  However, tourism plays an exceptionally important role in investment. Most people want to visit a country before they invest, so tourism is central to perception management. Over the past 20 years, tourism has emerged as an important source of revenue and growth in Africa, with a steady growth rate of 5 percent per annum, and accounting for 8 percent of GDP. 

This is the future that I see, and for many companies, one that is worth investing in.

Challenges as opportunity

But challenges remain.  Infrastructure – energy, roads, rail, ports, etc. - remain a critical bottleneck. Less than 25% of the population of SSA has access to electricity, compared to 40% access in other low income regions.  The consequence is that Africa is less competitive beyond the factory floor and remains constrained and unable to take advantage of the 2% increase in growth and 40% rise in productivity that results from better infrastructure.   

The narrative is critical.  Do we adopt a poverty narrative or a wealth-creation narrative? 

It is all about the lens through which Africa is viewed – one of untapped opportunity or one that emphasizes development challenges.  We have also seen businesses scared of declaring their successes in Africa either because of the stigma attached to “exploiting Africans”, or because accepting that Africa is a profitable destination demystifies existing stereotypes of disease and squalor, which keeps away the institutional, objective and hands-off investor.

And this is why we are here today.  To celebrate those who have strived to bring to the world stories of a different and emergent Africa; its opportunities and its challenges.   It is great to see that the 2010 awards have categories that focus on some specific industries that we recognise are key to Africa’s growth and development: Internet Communications and Technology; Finance; Infrastructure; Agribusiness / environment; and Tourism.

The opportunities are immense for Africa, and we all have a role to play is realising these opportunities: 

• For  governments – a sustained commitment to the fiscal and structural reforms that has served them so well and for which the benefits are only beginning to emerge;
• For Investors – remaining true to that business principle that profit lies where the gap between reality and perception is greatest. And remembering that that place is Africa;
• For Development Partners – a true partnership that recognizes the importance of poverty reduction but also seeks to promote enterprise
• For Citizens – a constant for greater accountability and seeking out avenues for holding leaders to account. 
• For the Media – continuing the work towards de-marginalizing Africa and ensuring that the continent and its promise gets onto the radar screen in both newsrooms and boardrooms.

I also believe that the capacity of African journalists needs to be enhanced further. This is a long term project that many in this room today are part of – Reuters Foundation, Diageo, and BBC Trust to name a few.  But I believe we can move faster on this and leverage existing skills in the continent.  What better way to start than to work with the African nominees and winners at this year’s awards.

Thank you for listening!