Build Africa – and the world will come

I’m still rubbing my eyes in disbelief at an extraordinary event last week – the Build Africa Forum – held in Congo Brazzaville. Not only was the location out of the ordinary – who goes to Brazzaville as part of their day job? – but the cast of characters just blew me away. The Forum was the brainchild of events supremo, Richard Attias,  held under the aegis of the President of the Republic of Congo himself, His Excellency Denis Sassou N’Guesso. What’s more the invitation list of top notch business leaders, economists and senior government ministers was jaw-dropping. And they didn’t just turn up for an hour or two and then disappear. Brazzaville’s Palais de Congres was humming with the creme de la creme for a full two days. Networking, as I’d never seen it before. 

A quick word on the premise of the Build Africa Forum and then a few personal highlights. The premise was straightforward.  Africa needs a shed-load of infrastructure investment – roads, ports, power stations, water-treatment plants, universities – to release the productive potential of her people and resources. There may be fifty plus African nations, but the yawning infrastructure gap holds true for all of them. In the case of Congo-Brazzaville, the government has decided that investing in infrastructure is the foundation stone to economic growth. And so  airports, ports, roads, bridges are springing out of the ground in a bid to connect the rest of Africa and the wider world to the massive market and resource-store that is the Democratic Republic of Congo across the river. The question is will this gamble on investment provide lasting benefit to the people of Congo?

I’m not even going to begin to try and answer that question, ill-equipped as I am to be a commentator on  African matters. Here, instead, are some personal highlights of the Forum, starting with the Opening Ceremony, in which I had the great good fortune to be interviewing the Governor of the Central Bank of Nigeria, Lamidu Sanusi.  Of course his reputation for probity and professional competence went before him, but what I hadn’t expected was just how fiercely articulate and charismatic the Governor would be in person. He didn’t bat an eyelid when I asked him to stand at the front of the stage,  the better to engage with the audience, who were bursting with questions. And though Governor Sanusi declined to mention politics as his ultimate ambition, the buzz in the hall later suggested that we had  glimpsed  Nigeria’s next leader in waiting.

As it turned out Nigeria came up time and again in conversations as the African country international investors were most fascinated by. So I wasn’t altogether surprised when both rock star economist Nouriel Roubini and entrepreneur, Rob Hersov, both confessed on stage that having done a whirlwind tour of  West African states, Nigeria was the country they were most surprised by – pleasantly surprised. On a personal note, it was humbling to be on stage with such a fierce intelligence as Roubini’s. And I also had the pleasure of long conversations with another rock star economist, Prof  Xavier Sala i Martin from Columbia University, whose work on global poverty will make him the next Hans Rosling…mark my words!

Apart from Nigeria, my other big takeaway was Brazil. We all know about the China-Africa story of the past decade, what I hadn’t realised was how seriously Brazilians – business, investors, the government – take Africa. But dining  with Otavio Azevedo, President of   Brazil’s massive diversified conglomerate, Andrade Guttierez, dispelled my doubts. Mr Azevedo sparkled on the panel discussion about Infrastructure and Job Creation, as did  South African entrepreneur, Robert Gumede, whose passionate plea for legislation requiring local labour content in infrastructure projects went down a storm  with the audience. I’m not sure everyone on the panel concurred though.

Also a small journalistic point of satisfaction. When prodded a bit by me on the number of projects the IFC gets involved in, IFC VP Jean Philippe Prosper put up a robust defence  – we have to focus on a few key projects,  it is about providing a ‘demonstrator effect’ to give other investors comfort to follow suit…Later in the Palais de Congres, I overheard a couple of investors discussing that point about the ‘demonstrator effect’. So it seems we had the audience’s attention.

Finally, I was struck by the paucity of women at the Forum.  Apart from Renaissance Capital’s insightful Isabella da Costa Mendes, and Bombardier’s Suad Elmallem who conducted a first-rate panel discussion on Aviation, there weren’t very many high profile women on stage. Is this an infrastructure thing? Something to work on for the second Build Africa Forum in two years’ time. Meantime, how do you think the African infrastructure story will change in the next couple of years? Please join the discussion on my blog.

And here are the videos of each session at the Build Africa Forum: http://www.buildafricaforum.com/en/videos/2014

 

 

 

 

 

 

13
Feb

20 responses to “Build Africa – and the world will come”

  1. Tonye Cole says:

    Africa is surely taking center stage and the need to tell the story of Africa from an Africa perspective by non Africans and Africans alike is the genuine task ahead of us all. For too long the story of Africa is one of a continent ravaged by war, famine, poverty and corruption, a begging bowl in one hand and a starving child in the other. Nisha’s article points at the many surprises the emerging continent has in store for the rest of the world; surprises those of us on the continent have known and loved for over 2 decades.

    Nigeria continues to awe any first time visitor as very different from its projected perception and this goes for most of Africa. If there is a time to throw off prejudices and explore this vast and diverse continent, it is now! One surprise you will find is that there are many more women entrepreneurs in Africa than you would imagine.

  2. Dade says:

    An insightful take there Nisha. Your comments on Sanusi’s ambition runs contrary to his much publicized denials in the FT and on BBC Hardtalk about running for political office.
    I guess time will tell!

  3. Nisha says:

    Well, I was only reporting on the buzz in the hall, Dade! In the court of public opinion Governor Sanusi looked every inch the consummate political leader.

  4. Nisha says:

    Yes, Tonye, and that comment of yours about female entrepreneurs in Africa, was echoed by Rob Hersov of InvestAfrica, who mentioned meeting a roomful of impressive business women in Nigeria on a recent visit.

  5. james says:

    Hi Nisha, what a fascinating event,and place, to have been to. Africa has so much potential, so much human capital, so much to offer the rest of the world. I can’t wait for it to participate fully in the world economy – what a boon for African people, and for the rest of us. Bring it on.

  6. Nisha: Forgive the length of this post. It is a copy of the keynote speech I made at the conference. It is posted in my blog (http://salaimartin.com/randomthoughts/item/716) . Again, sorry for the lengthy post…

    Africa is forecasted to grow at 8% over the next 10 years and at 10% between 2025 and 2050. If true, this would take Africa’s share of world GDP from its current 4% to about 12% in 2050.

    The good news is that it can be done. It is entirely possible that Africa’s miracle not only will continue but it will even accelerate over the next few decades. Moreover, African citizens could achieve middle class status faster than those in the West did (it took them over 150 years), faster than Japan (which took over 100 years), or the rest of Asia (which toot 50 years). Africa can achieve middle class status it in less than one generation. And that is not unreasonable.

    The bad news is, however, that this sort of miracle is NOT going to happen automatically. And it is not going to be easy. I hear a lot of talk in this conference and conferences like this around West Africa where politicians and business people optimistically take the future success of Africa for granted. Yes it can be done. But no, there is no guarantee that it will happen for sure. The success of Africa will crucially depend on the decisions that are made today. This is why it is very important for the political and economic leadership of Africa present in this conference to make the right decisions as we move forward.

    The Global Competitiveness Index of the World Economic Forum estimates the determinants of productivity for 148 countries. Although African economies have been improving over time, they still lag behind in many important dimensions. Let me highlight the six key areas that will ultimately determine the success of the continent.

    First, Africa needs to make an intelligent use of its massive natural resources. Natural resources in Africa have been under the ground for millions of years. Yet, so far, they have not contributed to the economic growth of the. Until today, the natural resource money has been squandered in wars, corruption, waste and political favoritism. This has to change. Africa needs to stop blowing its colossal natural wealth and needs to start putting it to good use. Natural resources have to be invested productively once and for all.

    Second, infrastructures. Africa needs to invest in its infrastructures. And that is why congresses like this one are useful. Great nations have been built around great infrastructure projects. American growth during the XIXth century could not be understood without the railroads that crossed the continent from New York to San Francisco. And the success of the XXth century could not have been achieved without the interstate highway system. Infrastructures are good because they facilitate businesses, create networks, reduce costs of transportation, reduce the price and the time of communication, allow workers to get jobs that better match their abilities as they can commute, and improve life expectancy and the standards of living as they provide access to hospitals, schooling and clean water and sanitation. And perhaps more importantly, infrastructures facilitate the exchange of ideas, the ultimate source of growth.

    But the fact that infrastructures are crucial does not mean that all infrastructures are good. Many are a complete waste, especially those that are designed and build with political rather than economic criteria. Let me give you an example that is close to my heart. I am from Barcelona and in 2004, the city organized a mammoth forum. The government invested hundreds of millions of euros in infrastructures under the pretext that, once the forum was over, the infrastructures would attract businesses and economic activity. But when the Forum ended, businesses never came. That part of the city is now a ghost town while its infrastructures deteriorate irremediably. Something similar happened in Seville after its massive investments for the 1992 World Fair (Expo Sevilla 92). And during the construction bubble in Spain, colossal infrastructures were built. Infrastructures that were the pride of politicians of all political parties. And now that the bubble is over, Spain has lots of high-speed trains with no passengers, airports with no planes, roads with no cars and hundreds of thousands of empty buildings. The theory “build and they will come” is blatantly false and leads to frustration and waste.

    This means that, when it comes to deciding what infrastructures to build, decision makers should learn to prioritize. They should choose infrastructures that have a wide range of benefits to a wide range of industries. They should prioritize infrastructures that are flexible and can have multiple uses (as opposed to infrastructures that only benefit a handful of handpicked sectors or companies). The government should deploy infrastructures that are resistant to the passage of time. This is especially true in places like central Africa where the tropical weather wears and tears and depreciates buildings, roads or bridges at a much faster pace. The government should prioritize infrastructures that create networks: networks of businesses, networks of cities, networks of regions. Finally, the government should prioritize the infrastructures that solve bottlenecks problems. Start where there is clearly a demand. That explains the success of another great infrastructure project in Barcelona, a project that represented a great success: the Olympic Games of 1992. Unlike the 2004 Forum, the 1992 Barcelona built roads that facilitated mobility around and within the city, enlarged the overcrowded airport and ports, and cleaned historical buildings to expand a tourism sector that already existed. And that was a resounding success.

    A final word about infrastructures: in a session this morning a number of experts evaluated public works by the amount of jobs they created while they were being built. That is a mistake. The goal of building infrastructures is not to create jobs during construction. It is to facilitate the creation of a business environment and to improve the life of the citizens once they are finished. That is how they should be evaluated and chosen.

    Third, enlarge markets. Africa has 54 economies with over 700 million people. And it is expected to have 1,5 billion citizens by the end of the century. But unless things change dramatically, Africa will not be one of the largest markets in the world despite its size. African economies are disconnected both physically and legally. It is very hard and very expensive to travel around Africa by plane, boat, train or road. The infrastructures that connect African economies simply don’t exist. But even if they did, Africa would not be a single market as it is a continent fragmented into 54 different regulations, 54 telecommunications markets, and 54 bureaucracies. Africans need to make an effort to integrate at all levels. And this includes the free movement of people. It is beyond comprehension that in 2014 it is so hard to get a visa permit to enter almost all African countries. It took me two weeks to get a visa to get here. If I was an businessman eager to invest here or a tourist willing to visit this country, I would have decided not to come. It is simply too cumbersome and too hard. And there is no reasonable explanation for these absurd government-imposed barriers. Africa will not succeed in its quest to grow into a wealthy continent if each country remains closed to foreign talent. I think it was Bill Gates who said that the United States will continue to lead the world for years to come because, unlike China or Europe, it can draw talent from a pool of 7 billion people. It can draw talent from the rest of the world. In order to grow, Africa needs talented engineers, architects, businessmen, doctors, lawyers and teachers. Since it will take a while to grow its own talent, in the meantime, it needs to draw the talent from the world pool. And will this not happen as long as government maintain the current constellation of absurd barriers.

    Fourth, the government must work for the people. Political scientists’ measures suggest that, although some dictatorships remain, many African countries have made great progress towards being more democratic. Gone are the days in which there were no democratic countries in the continent. But, by democracy, political scientists mean governments that are elected by the people. A well functioning democracy, however, requires more than just elections. The government should not only be elected BY the people. It should be committed to work FOR the people. By the people, for the people. The public sector should not be seen as an institution that employs and benefits the friends, relatives and supporters of the parties that win elections. The government should not even be seen as an “employer”. The role of the government is not to employ people but to create the environment in which businesses and entrepreneurs create the jobs. Too many public teachers in Africa miss more than 25% of the classes. Too many public doctors in Africa get away without seeing patients for weeks. Too many public employees live off kickbacks. Shiny new ports are useless if it takes weeks and an uncertain amount of bribes to get the containers from the bureaucrats and the border police. Roads are useless if it takes hours or days to get a visa that allows people to cross borders. Railroads are useless if it is prohibitively costly to move goods across borders. None of these practices are acceptable in a well functioning democracy. An economy cannot function properly without a properly functioning public sector. The reform of the public sector should also be a priority in the reform agenda for Africa.

    Five, embrace technology. One of the key infrastructures for Africa is telecommunications. In many African countries, there are more cellular phones than people. And Africans have been very creative in putting these technologies to good use (everyone knows and cites the success of MPesa in Kenya). But the cellular infrastructure is already obsolete. While the rest of the world is moving rapidly to adopt smartphones, Africans are being left behind because the high-speed networks have not yet been implemented. It is very hard to connect to wifi and the internet, even in the most expensive hotels of the capital cities. Delegates attending this conference know that high speed internet does not work efficiently even in this very state-of-the-art congress center! This needs to change. Africa cannot afford to stay behind in the telecommunications revolution that is spreading around the world. Hence, as governments around the continent ponder on how to prioritize their infrastructures, fiber optic networks should be at the top of the list. Every building, every business and every school in Africa should have easy and cheap access to high speed internet.

    Which brings me to the sixth and last point: the mother of all infrastructures, the most important of all policies, the most urgent of priorities is… EDUCATION! It is impossible to understand the miraculous economic performance of Japan, Korea or China without recognizing the massive effort made in the education of its population. In less than one generation, Korea has gone from a rural and largely illiterate society to a modern technological world leader, whose scientists and engineers dominate the admissions committees of the best colleges of the planet. Over a third of the students accepted at the top elite universities in the United States now come from Asia. Education is the ultimate key to progress and development.

    But when I mean that Africa should prioritize the investment in education I do not mean more of the same education. The current education system is obsolete and more of the same will do little good. The education system must change dramatically. Research shows that 72% of business ideas come from workers (like Amancio Ortega, the founder of Zara, was a salesman at a bathrobe company before creating his empire). 20% of business ideas come from non-workers who are not researchers (the three founders of Starbucks were high school teachers, the founder of Cirque du Soleil was a street performer, and the founders of Ikea or Facebook were students). Only 8% of business ideas come from formal researchers.

    This means that the education system needs to focus on promoting the creativity of the regular students (as opposed to the superstar students who have the potential to becoming researchers and scientists). This means that the focus of the education revolution needs to be in primary and secondary schools, including professional schools, as opposed to tertiary schools. It also means that African schools should emphasize more the creative aspects of education than the traditional mechanical aspects.

    The world is witnessing an educative revolution. Americans, Europeans and Asians are experimenting and learning how the internet revolution changes the way we educate our children. It is not clear how it will all end up. I am not even sure how it is going to affect my job. The Massive Online Open Courses (MOOCS) that are being offered everywhere may end up meaning that a few superstar teachers have millions of students while the rest of us have to rethink what we do in our classrooms. Initiatives like the Khan Academy may change what primary and secondary schools students do in the classroom and at home. It is a fascinating moment in the history of education. And the beauty of it is that everyone who is connected to the internet can be part of it. That is why it is so important that the governments of Africa make every effort to connect every school of the continent to the internet. So that, this time around, African kids don’t miss the train. Because it does not matter whether you are in New York or in a remote village in Equatorial Guinea. Today, if you have access to the internet you can have access to the best education in the world.

    Nobody should underestimate the power of millions of educated, creative, young African people that live in an environment that allows them to develop and implement their ideas. If today’s African leaders are able to create such an environment and are able to endow the children with the right kind of education, Africa’s future will be as bright as the optimists foresee.

    In 1960, John Fitgerald Kennedy pledged to send a man to the moon and bring it back to earth safely by the end of the decade. After the inspiring speech, the entire country committed to achieve that goal. And Lance Armstrong made his “giant leap for mankind” in 1969.

    I whish that leaders made a similar speech today. But instead of sending a man to the moon, they should pledge to have a universal education system second to none by 2030. Only if African children have access to stellar education, the miracle of Africa will become a reality. And it is within our reach. It is only a matter of political will. That would be the real giant leap for mankind.

  7. Nisha says:

    Xavier, thanks for posting a copy of your keynote speech to the Build Africa Forum – insightful analysis. Especially struck by your warning that infrastructure alone may be a necessary but is certainly not a sufficient condition for growth and long-lasting prosperity. Salutary warnings about ‘glory projects’ from Spain, noted.

  8. Rob Hersov says:

    The one area in Africa where our Governments are failing us – in our combined effort to create better regional integration, the crucial transfer of goods, services and people, between countries – is in Commercial Aviation.

    The concept of a State-owned (and worse, managed)National Air Carrier is outdated, inefficient and will not deliver the low cost and superb airline services we find elsewhere in the world. All government-owned and managed airlines in Africa lose money – no surprise to me!

    Almost thirty years ago a majority of African nations signed the Yammousoukro “Open Skies” agreement, which showed great vision for what is required in creating the regional integration we so desire.

    Ten years later, all these nations reconfirmed their commitment to the agreement.

    As of today, nothing has been done.

    Africa needs leadership in this area, and for Governments to accept that owning and managing an National Airline makes no sense whatsoever.

  9. Nisha says:

    Yes and the Palais de Congres burst into spontaneous applause several times when you argued your case, succinctly and persuasively, Rob. But, as I recall, they did the same when Minister Bouya argued the opposite. A way to go…?

  10. Amir says:

    Nisha – if Afro-optimism was at the heart of this year’s BUILD Africa Forum, you and the wonderful collaborators were its soul. Big thanks to all of you for your contributions in this inaugural event. Such a wealth of views and knowledge!

    Rob, great to relive your fire and passion for aviation reform.

    The key takeaways for me personally from the two days we spent together was the need to professionalize infrastructure entrepreneurs and give them better resources to pitch their projects to the global investor community. There’s no shortage of capital out there to help decrease the infra deficit, it’s time to simply mobilize it in a smarter way.

    Beyond the need for more women, we were admittedly short on having more private African infrastructure players around. We know you’re out there…reach out to us at http://www.buildafricaforum.com, or @buildafrica2014.

  11. Tina Schneidermann says:

    I’m fortunate to be involved with several conferences in Africa on ‘big societal topics’, and one of the common challenges is about building, attracting and retaining capabilities – in infrastructure, health care and other other areas. The challenge can be broken down into three parts:
    – access for all children to the right kind of education
    – retaining homegrown talent in a reality where well-educated young people can find better paid jobs outside of Africa
    – attracting foreign talent
    None of the above are quick fixes, and I don’t think there is a magic formula. The good news is that the ‘raw talent’ is there but there’s quite some way to go before it becomes ‘capabilities, and the unresolved questions are: who is responsible, who is capable and who can finance it. Shortly, we’ll be discussing this at a symposium on Healthcare in Africa where one of the topic pillars is training and education. With a multi-stakeholder audience, great speakers and a pre-event task force to spearhead the debate and ensure the real challenges are addressed, there’s reason to hope we’ll have elements of answers after the event. Hopefully Nisha will have the opportunity to write about this event as well.

  12. Let me share with you that I was impressed by the number as well as by the quality of the participants to the Forum which has surpassed my expectations.

    The only drawback was, to my opinion, the lack of participation by Chinese speakers in the different panels since China is bringing so much to the development of Africa.

    BTW due to the lack of time for questions and comments by the audience I was unable to provide a strong comment/protest when we heard some people take anti-China stands on the issue of the “cooperation between China and Africa”.

  13. Nisha says:

    Good point, Patrick, there were several Chinese business people attending, but no speakers or panellists – and that tipped the tone of the debate at times.

  14. Maya Putois says:

    Dear Nisha, This was one of the most hopeful pieces of writing I have read on face book. I’m glad you posted it. Hope the right people get the benefit of all the new infrastructure. Totally agree about wanting there to be more women at such conferences.
    There are many incredible female African leaders who have done more for women, children, their environment and the planet’s than most. Wangari Maathai for one (heard her speak at a conference in Paris once). Also, glad to read about Brazil’s role in Africa. Do post more stuff like this.

  15. Jean Philippe Prosper says:

    Great blog and excellent comments about the Build Africa Forum. Indeed Infrastructure or rather lack thereof is one the key constraints to Africa’s growth and development. People have been talking about it for years; look at electricty availability, roads, railways, ports, airports, you name it, Africa as a continent is lagging far behind in infra. Today, something is happening, more than talking, there is some action, whether in Congo where we had the conference or Nigeria where there is a major effort going on in the power sector for example, change is on its way and with it economic growth will follow!!!

    At IFC and the WBG in general (IDA, IBRD or MIGA) we are keen to support this change and have been involved in most of the major infrastructure projects developed by the private sector over the past few years in Sub-Saharan Africa and will continue to do so.

    Nisha, may I take the opportunity to congratulate you for having done a superb job during this forum and big congrats also to the organizers for a great event!

  16. Nisha says:

    Maya, so glad you enjoyed my blog. Next piece will be focussing on how big business can support small-holder farmers. I’ll be interviewing the CEO of Unilever, Paul Polman, then holding a debate.

  17. Nisha says:

    Jean Philippe, thanks for taking the trouble to add your comment on my blog and for your kind words. Bet you had a lot of interesting side meetings at the Build Africa Forum.

  18. david swarbrick says:

    Africa is at least 5 if not 6 totally different worlds, just like Europe, Asia or the Americas….so I’m not sure we should focus discussion on continents – it over simplifies

  19. Pedro Rodrigues says:

    I believe this type of event is extremely important to show the world how much potential countries in Sub-Saharan Africa have. The presence of great business and political leaders helps to spread the word about most relevant and urgent transformations required in Africa. Also, the opportunities created by the abundant demand for investment will be taken by decision making men and women to the entire world.
    I also had the privileged to visit Brazzaville and parts of the country side in Congo and, just like you, realized that infrastructure and education are the most important assets the country needs to invest to unlock all its potential. The large amount of investments in different types of infrastructure made during the past few years shows that Congo is committed to improve its infrastructure and increase the country’s overall competitiveness. I have no doubts that with a constant high rate of investment in infrastructure keeps high Congo will be a great example to all sub-Saharan countries. With a better infrastructure and educational system, Congo will be able to produce and move goods and people for a lot less creating more jobs and increasing its overall productivity.

  20. Isabella da Costa Mendes says:

    Dear Nisha,

    I know i am coming seriously late to this. But i would like to higlight what a great forum this was and how much i believe infrastructure in Africa will be transformational. Your participation in the forum was critical to make it both insightful and fun. I can only look forward to the 2015 edition.

    Isabella

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