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Investment Marketplace Coming To Africa

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From November 7-9, Africa Inc. will convene in South Africa’s Gauteng Province, the continent’s seventh largest economy, for the inaugural Africa Investment Forum (AIF).

An initiative of the African Development Bank (AfDB), it was announced in May in Johannesburg by AfDB President Akinwumi Adesina with Gauteng premier David Makhura.

“It will be the continent’s first-ever investment market place,” said Adesina, formerly Nigeria’s minister of agriculture.

“South Africa is open for business again, and as Gauteng, we are ready to host the forum on behalf of not only South Africa, but for Africa,” said Makhura, calling the forum “the Davos of Africa”.

A platform to close the investment gap, Adesina called it a game-changing initiative.

READ MORE: The Investment Hotspot

“It cannot be business as usual, it must be business unusual,” he said.

With Africa’s population set to be two billion by 2050, its development needs will require an estimated $600-$700 billion per annum. So accelerated development will be the forum’s focus.

“The forum will be 100% transactional. There will be no political speeches. The only thing allowed will be transactions, transactions and transactions,” said Adesina. In attendance in November will also be African heads of state who will be present as the CEOs of their countries.

In a sit-down interview with FORBES AFRICA, the AfDB president shared more about new investments, and the bread baskets and Silicon Valleys of Africa:

How will AIF take Afro-optimism and the African growth story further?
African economies have been growing relatively well in a very difficult global environment. Despite the global economic downturn, in 2016, they grew at roughly 2.2%; in 2017, they grew at 3.6%. In 2018, they are projected to grow at 4.1%. And that’s still above the global average.

So Africa’s head is above the water. But it’s more than about keeping your head above the water that matters, it is about how fast you can swim. I think Africa needs to swim fast and needs a lot of oxygen to do that. And that means a lot of firepower in terms of capital to close the infrastructure gap. To be able to drive millions of people out of poverty, Africa should be growing at double digits.

To be able to do that we have to deal with the problem of lack of electricity, make sure there is a lot more investment to allow trade to happen. Africa could contribute a lot more be it is rail, ports, national highways or aviation. It has to change lives on the ground and quiet honestly when people ask if I am an Afro-optimist, I am a very proud African. Africa is a beautiful place and has tremendous potential so we shouldn’t always just talk about the potential because nobody eats potential. We have to unlock that potential. So that is what the Africa Investment Forum is all about. Be it oil, gas, minerals or agricultural commodities, Africa is awash with rich resources.

The question is how to turn them into real dividends with significant amounts of revenue that allows a better quality of life for the people. For that, you need to deal with the infrastructure deficit. We used to say it is about $15 billion. But that has changed. The AfDB recently released the African Economic Outlook report and the deficit is anywhere between $67 billion to $107 billion every year, so which means we must do a faster job pulling capital together because the rest of the world is not waiting.

How long will it take to close that gap?
I think within the next decade. But it’s going to take a lot of work…

What about the youth dividend; what are the future industries?
Africa is at the very top in fintech and mobile money… but as we look at new types of industries, we have to look at them in the context of the fourth industrial revolution… I get excited when I see the youth in Africa well-educated, they are all on social media, know how to use apps, which means they already have a leg up. So the key is how to re-tool them to operate in that kind of a new economy. The AfDB is doing that in three ways already. First is we signed up a joint program with Google and Microsoft to help develop young talented Africans in computer technology. We as a bank are already investing in technology parks in Cape Verde, Angola, Kenya, Senegal, Rwanda. These are technology parks where you can have the ICT industries emerge; almost like trying to create the Silicon Valleys of Africa.

When it comes to the new economy, you have to start early. We have a program trying to create 250 coding centers in Africa where you get people with computational knowledge to do coding services that can help in this new world we are moving towards. We are also investing in universities for science and technology across Africa to create this new scientific human capital…We need to give African youth the skills they need for the jobs of the future, not for the jobs of yesterday.

What then are the new wealth generators?
If you look at where the money is going in Africa, it’s not actually going into oil, gas and natural resources. Most of the foreign direct investment (FDI) is going into the service industry, at least 64%, and also the financial services sector; maybe about 27% goes into the manufacturing sector. So these are the big sectors where you see a lot of FDI. But there are two sectors very important for me.
One is ICT, because this is going to be the driver of the economy. It’s very important for countries to invest heavily in the ICT industry to give their countries the platforms they need in the knowledge economy.

The second is the food and agriculture industry. Africa has a lot of oil and gas, but nobody drinks oil, nobody smokes the gas. Food is the future. The size of the food and agriculture industry in Africa is going to be $1 trillion by 2030 in Africa. This is where the wealth is supposed to come from. Unfortunately, in Africa, we always walk past gold. Just imagine you are seeing gold, and you see it as dirt and don’t recognize it. That’s the power agriculture has… The food business is the biggest business. Agriculture is not a development sector, it’s not a social sector, it’s a wealth-creating sector. Agriculture is a business and Africa needs to fully unlock that potential. If you look at the amount of arable land left to feed nine billion people in the world by 2050, it is not in Europe, Latin America, Asia, or the US, it’s in Africa – 65% is right here. What Africa does with agriculture will determine the future of food for the world.

How will Africa’s billionaires and capitalists help achieve these goals?
If you look at the high-networth-individuals in Africa, the majority of them make their money on this continent, and that’s already a strong signal. Aliko Dangote makes his money in Africa.
So we are going to get them involved on the Africa Investment Forum because it is trying to send a message to the world that we have African businesses that are viable businesses making money and doing well on the continent; so putting capital to help them expand can help them become global multi-national companies…

And investing in African entrepreneurs?
The issue for entrepreneurs is finding them, nurturing them and then putting the financial backing behind them to thrive. Africa has a lot of young people. Every day, I wake up I read about a young person doing so well. So the best investment that Africa can make is to put its capital at risk on behalf of its young people. Because when you see a young person walk into a financial institution, all you see is risk, risk, risk. We have to change that and try and see creativity, innovation and entrepreneurship. So that way we can put your money at risk to make them more creative, more innovative and unleash their entrepreneurship capacity. That is why at AfDB, we have a program helping to invest in the early-stage businesses of young people. Mark Zuckerberg and Bill Gates didn’t just get there, somebody had to believe in them.

We have a program set up with the European Union called Boost Africa to invest in young people. The other thing we are doing is helping unleash entrepreneurship in the food and agriculture industry. The bank has a program targeted at getting young graduates, medical doctors, engineers… who are all going to agriculture as a business. Last year, AfDB invested over $860 million in that program for about eight countries. Going forward, we expect to invest $1.5 billion dollars every year in that program for the next 10 years.
I really think unless we change the mindset, the labor composition of the agricultural sector and create a new dynamic group of entrepreneurs in the food industry, we only will have old people left. Every university in Africa has to make entrepreneurship compulsory.

– By Karen Mwendera and Methil Renuka

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A Country On A Roll

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The tiny country of Rwanda is now producing factory-fresh Volkswagen cars from its rolling hills. Next up are ride-hailing and public car-sharing services by the German carmaker.

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The Heroes Among Us

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Heroes exist in history, on celluloid, in pop culture or in these digital times, at the forefront of technology. These are the mighty who shine on the front pages of newspapers, as the paradigms of victory and virtue. But every day in public life, surrounding us are some of the real stars, the nameless, the faceless we don’t recognize or celebrate. In the pages that follow, we look at some of them, exploring the exemplary work they do, from the war zones to your neighborhood streets. They are not flawless, they are not infallible, but they are heroes.

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The Power, Humour And Anger Of Mandela

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It is a century since Nelson Mandela came kicking and screaming into a world that he would change.

In one hundred years, his name has been spoken with pride from the paddy fields of Vietnam, through the savannahs of Africa to the smoky steak houses of New York. His legacy appears more contested with every passing year.

I was fortunate to have a front row seat in the Mandela years and saw the power, humour and anger of the man. I used to feel 10 feet tall at press conferences when he used to greet my questions with: “Mr Bishop, how are you?” Once I was walking to a TV interview with him, at an African Union summit in Harare, the day after I had ruptured my knee playing football, he noticed I was hobbling far behind – something he was not used to. He turned and inquired of the cause of my pain.

“May I suggest you take up boxing, it’s safer!” says the old man with that million dollar smile. I shall take the warmth of that smile to my grave.

Make it clear, I am no Mandela worshipper. He was no saint and certainly didn’t want to be one: he could be angry and petulant with the best of them; his past was chequered by domestic troubles; a man of the people, yet distant from his own family, according to many close to him. A man who promoted press freedom, yet like many of the lesser politicians who followed him, wanted his picture on every page of the morning newspaper. Mandela drew the line at the sports page – he joked that he didn’t want to risk being associated with losers.

The greatest fear Mandela had was that his ideals – not his name – would be forgotten after his death. Not for Mandela the greed of rule, nor the trappings of power.

Yet it is very fashionable these days to run Mandela down as something akin to a sell-out. Those who claim, erroneously, that Mandela sold out his people. They say he didn’t stop poverty overnight nor right the wrongs of the past with the wave of his wand. They need to talk to those who were there in the negotiations for a new free South Africa.

“People say we gave up too much in negotiations yet we had nothing to start with,” Denis Goldberg, a man who faced death with Mandela at the Rivonia Trial in 1964, once told me.

READ MORE: Mandela Through Their Eyes

The negotiations with an entrenched elite – that held most of the cards and only grudgingly acknowledged Mandela and his comrades – were difficult to say the least. Mandela’s African National Congress (ANC) could not even threaten to go back to war because the depleting arms of its military wing posed little or no threat to the state.

Even so, a deal was hammered together somehow. In the next two years, in the run-up to the 1994 elections, Mandela won his leadership spurs as he steered South Africa away from the civil war that many feared was inevitable. He flew to Durban and told bloody-thirsty faction fighters to throw their weapons into the sea and they listened. When revered freedom fighter Chris Hani was gunned down on his front drive, in 1993, many were ready to take the law into their own hands.

Mandela barged into the SABC studios in Johannesburg that night and made a broadcast to the nation to calm down and put its weapons away. He wasn’t even in Parliament then and I wonder to this day how many lives that broadcast saved with this canny display of leadership.

Then, when into power with a virtually bankrupt Treasury, Mandela steered the National Development Programme that built millions of homes and schools; electrified the homes of legions of poor people and rolled out roads to connect the nation. Yet, the money was never going to stretch far enough and millions still have no roof over their heads and too many schoolchildren attend classes under trees.

It is fashionable these days to say the majority of South Africa must rise in a civil war in which the nation will be cleansed of its past, restored of its land on the path to righteousness. It probably sounds even better after a few drinks.

READ MORE: Celebrating Mandela From Where It All Began; Soweto

I say this is bunkum and anyone who has ever seen or smelt a civil war will agree with me. How a vile, stinking trail of dead fathers, raped women and children, destruction and disorder, can lead a country to the light beats me. Those who scream for war have clearly never seen it.

The first time I clapped eyes on the great man, at the Harare Agricultural Show, on his first foreign visit to Zimbabwe in August 1994, he walked alone, without a security man in sight. I didn’t ask for a selfie – they didn’t exist then, anyway – I was tongue-tied. We merely smiled at each other in passing.

So when people in political circles told me that South Africa’s new president Cyril Ramaphosa didn’t care for wealth and power – he merely wanted to put his name up there with Mandela – I smiled like I did on that August day in Harare.

This does seem feasible as President Ramaphosa – a millionaire in his own right – was the man who stood next to Mandela, holding the microphone, on the town hall steps in Cape Town, on February 11 1990, during his famous address on release from 27 years in prison.

“I stand here before you not as a prophet but as a humble servant of you, the people,” said Mandela to deafening cheers on that bright summer’s day.

Clearly this humility and willingness to serve rubbed off on President Ramaphosa on that fateful day in 1990. In his first 100 days, he has made manful attempts to stop the rot in South Africa by merely enforcing the rule of law. A course of action he made no secret of even before he took power on February 15.

“There are no holy cows. Anyone who is caught doing wrong things will end up behind the bars of a jail,” says Ramaphosa, with microphone in hand and humble service in mind at the World Economic Forum in Davos, Switzerland, in January.

True to his word, Ramaphosa cut swathes through the corruption of the past. Former president Jacob Zuma ended up in the dock on corruption charges something that many – including me – thought they would never see in their lifetime. He removed the rookie finance minister Malusi Gigaba and replaced him with the people’s choice Nhanlha Nene who has staved off more downgrades of the economy. A clean-up of the state-owned enterprises and the institutions is underway and many who thought they were invincible six months ago have been cut down to size.

I am sure the old man, who must have been spinning in his grave over the last few years, would approve.

“Never, never and never again shall it be that this beautiful land will again experience the oppression of one by another,” says Mandela at his inauguration at the Union Buildings in Pretoria.

As we mark 100 years since his birth, it is time for cool heads and clear thinking to make sure this utopian ideal of liberty and tolerance lives on after his death. Our grandchildren will judge us harshly if we don’t.

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