The African continent, with a current population of 1.2 billion people, holds the highest level of population growth in the world. With a forecast that the world population will grow by 2.2 billion people by 2050, half of that growth will come from Africa. To put this seismic shift in the global population balance into context, in 1970, there were two Europeans for every African; astoundingly by 2030, there will be two Africans for every European. The common assumption with such a rising population is that a greater domestic market, positive demographic transition, and economic growth will ensue.
|From left to right: Arthur Linke, Sim Shagaya, Neil Tinmouth, Brigitte Schwartz, Mawutor Letsu, Nthabiseng Moleko.|
However, there are some downside pressures stemming from the rapid urbanisation associated with population explosions such as the flare-up of slums and urban sprawl in the densely-populated metropolises. In reality, Africa has not yet seen the structural changes required to tap the full potential of this development to let the continent take off in economic flight.
In a panel discussion held at the University of Stellenbosch Business School, mixed views were debated regarding Africa’s growth possibilities, reflecting the ebbs and flows of the continent. Generally speaking, the widespread challenges identified include corruption, bureaucracy, lack of access to credit, conflict and inequality. On the other hand, there are pockets of excellence. Certain countries have seen incredible economic growth and investment in infrastructure such as Rwanda and Ethiopia. While digitalisation has brought large scale ICT giants to the continent such as the influx of tech firms, Amazon and Google in Africa; local, innovative business models such as the Safaricom collective of pan-African businesses; and the emergence of data centres and cloud solutions across the continent. The potential market and the business need for education is phenomenal, as Brigitte Schwartz identified, “In a continent of 1.2 billion people there are roughly 90 business schools, only 9 of which are accredited, meaning that roughly only 45 000 people are being educated”.
But how does a company succeed in doing business on the African continent? Mawutor Letsu explained, there is no one size fits all approach, there is a vast diversity of cultures, languages and inherent mind sets across the continent. Businesses must adapt their strategies to counter these obstacles and commit to the long haul rather than pursuing short term returns. Sim Shagaya elaborated that in the African context, many business support services that are established and available on other continents, must be built from scratch.
The consensus of the panel was that Africa should not just adopt Western approaches to ignite a spur of growth, but rather tailor the tactics and techniques that work for the continent. It is through visionary leadership, strategic partnership selection, and understanding the cultural contexts that companies can succeed in realising the true benefits of the African continent. Moreover, the incremental benefits from uniting, adopting open mindedness and working together to combine strengths across African countries are inviting and thus must be fostered by stable and reliable governments following a long-term strategy.
More about the panel members
Brigitte Schwartz: Marketing Director at USB Executive Development Ltd, Cape Town, South Africa
Arthur Linke: Technical Director at Aurecon, Cape Town South Africa
Mawutor Letsu: Head of Finance at Maersk Logistics, Cape Town South Africa
Sim Shagaya: Founder & Executive Chairman at Kongo Online Shopping, Lagos, Nigeria
Neil Tinmouth: USB MBA Full-time Student, Cape Town, South Africa
Hosted by: Nthabiseng Moleko, USB Lecturer, Cape Town, South Africa
|This article was written by a group of USB MBA students as part of their MBA module, Perspectives of African Frontiers:|
Rudolf Janse van Rensburg, Lona-Lize de Klerk, Neil Tinmouth, Dean Maree, Melissa Diseko, Florian Wissuwa, Matthias Unterbuchschachner, and Réne Martens.