African firms have what it takes to give MBAs equal, if not higher, standards of employment as any other multinational company.
Simply put, the 9th Annual Africa Business Conference was bold and engaging. Speakers and panelists did not shy away from talking about their business strategies, trials and tribulations. The conference theme “Open For Business: Intergrating Africans into the Global Economy” set the tone for tough questions to which panelist responded with a candor and frankness that is atypical of business conferences. Participants reported that they gained incredible value by attending any of the several events which took place during the three day conference.
The conference was kicked off by Simon Harford, Head of Actis West Africa, a leading international private equity investor in emerging markets with $3.4 billion funds under management. Simon focused his talk around the importance of continued investment of value-added capital in Africa. Mr. Harford noted that African firms have made great strides and believed countries such as Nigeria were near the tipping point of becoming developed economies. He noted that the challenge facing African countries is to maintain momentum. He also stated that international integration will be critical, driven by private sector development. Specifically, he noted “private sector job creation has a significant impact on the overall economy,” giving as an example “a newly created airport job, will create 14 more in an economy.” He also believes that the more powerful the private sector becomes, the less room there will be for bad behavior in the public sector. “The private sector is self-correcting” Simon concluded, “corrupt, inefficient management will not survive in the long-run, while unfortunately this is not the case in most African governments.”
Regarding the keys to continued development, Harford stated, “What will develop Africa is more investment. What will determine the effectiveness of that investment are capital, ethics and management value added. The capital must be both thoughtful and intelligent.” In his view, private equity money does bring that value, whereas bank loans and the illiquid stock markets don’t provide much value-added benefits. He also stated that private sector management is the greatest challenge facing African firms, as there is clearly a shortage of management talent in Africa. Regarding ethics, Simon stated “for corruption to take place, it takes two to tango,” emphasizing that the private sector is not without blame for the environment of corruption still in place on the continent.
He concluded by challenging the crowd to live up to the theme of the conference, “Who is going to integrate Africa into the global economy?” He asked, “Every one of you! We must not be arm chair supporters, or worse, armchair critics. We must do it now, and we cannot assume someone else will do it, because many of these countries are at the tipping point.”
The conference featured 16 dynamic panels with a wide range of topics-private equity, financial services, entertainment, and entrepreneurship. It also gave participants the opportunity to gain honest insights into a wide spectrum of business success stories: from start up to multinationals, professional services to social enterprises. The second keynote speaker was Jim Ovia, a Nigerian who co-founded Zenith Bank and grew it from a single branch in Nigeria to over 200 branches throughout West Africa with about $7 billion in assets. Mr. Ovia stressed the importance of Information Communication and Technology (ICT) in the development of the continent. His address contained anecdotes relating stories of how the most advanced ICT equipments now available in Africa are curbing fraud and improving productivity across all sectors. He also spoke about the need for qualified professionals. The audience laughed when Mr. Ovia took a long pause as the pictures of the impressive, ultramodern headquarters of Zenith Bank in Nigeria came up on the Burden Hall screen. However, his message was not lost in the seemingly entertaining nature of this act: African firms have what it takes to give MBAs equal, if not higher, standards of employment as any other multinational company.
This quest for African human capital follows the increasing number of multinationals setting up shops on the continent and reflects Africa’s growing presence in the global economy. “The demand for skills presents huge opportunities for us and for talents who want to find employment at home,” says panelist Oona Burke, marketing manager for Careers in Africa Initiative at GCC, a global career firm which has placed more than 2500 professionals in Africa over the past few years.
It was particularly informative to interact with African entrepreneurs, especially those who are involved in professional services such as consulting, law, and banking, most of whom left lucrative employment in the U.S. and Europe to establish companies in Africa. They openly talked about their adjustment and growth strategies. Mr. Elikem Kuenyehia, a Kellogg MBA and former international banking lawyer with Barclays in London who is now based in Accra, stressed the importance of reengineering oneself to fit the local realities: “in my practice, clients come to me for advice on legal issues, and then talk about their financial problems, family issues…etc. I cannot just dismiss these needs. Instead, I find ways to meet them and in the process add value to my business and my client.”
Participants came from Africa, Europe, and several U.S. states. There was great representation from the African business elite, HBS alumni and academic communities, and several other business schools. For most participants, the conference was an opportunity to develop an understanding of the current trends and opportunities on the continent, share their experiences and network. The discussions on industries trends such as Private Equity, Venture Capital yielded the following major takeaways.
a) Africa offers an attractive destination for private equity. With returns easily surpassing 100% within 3 years, companies are replacing multilateral institutions as sources of direct foreign investments. Some sectors-principally telecom, power, natural resources and financial services-will continue to attract private equity players to the continent. Governments have realized the value added roles of private equity firms in Africa.
b) To create an environment suitable for these companies, African leaders are restructuring their business environments and pursuing policies that support dividend repatriation and collaboration between domestic and local partners. The future of private equity in Africa will continue to experience the proliferation of bigger players as well as the demand for capital. Such competition will offer alternatives for domestic companies to access capital. It is up to Africa to maintain and elevate its infrastructure to support these movements of capital.
The final keynote of the day was an interview moderated by HBS Professor Eric Werker and included Nancy Barry, Former President of Women’s World Banking, and Dr. Jennifer Riria, Chief Executive Officer of Kenya Women Finance Trust, Women’s World Banking affiliate. Jennifer Riria inspired the crowd with a speech focused on helping the poor majority of Africans and overcoming the negative perceptions of the continent. She noted that despite the great deal of natural wealth on the continent the majority of our residents still live on less than a $1 per day. Jennifer warned “there are still many who are commercializing on the pain, conflict and chaos in Africa.” She also cautioned conference attendants not to ignore the majority of Africans who are poor. “You need to work with the majority, specifically you cannot ignore women’s contribution in Africa.” She advocated microfinance as the most ideal form of engaging the poor in Africa. Microfinance, in her view, works with the majority and helps create business for many, where some of t
he other topics discussed during the conference still benefit the privileged few. Nancy Barry followed by expressing similar views about the power of microfinance, but warned about predatory commercial banking practices targeting the poor in Africa. She also urged the participants to go back to Africa if they truly want to make a difference, “You cannot do it from here, you need to be imbedded in you own economy to be part of the solutions,” she concluded.
The conference ended on Saturday, February 17, with a Gala Banquet at the Hyatt Hotel where the Second Africa Business Club Leadership for Excellence Award was given to Mrs. Ndidi Nwuneli, a petite dynamo who founded several organizations such as LEAP Africa and the not-for-profit NIA. Mrs. Nwuneli is a Harvard Business School graduate and has been recognized as a Global Leader of Tomorrow by the World Economic Forum in Davos, Switzerland.