Africa Rising ,Role of the Entrepreneur

Africa is Rising, Where is The Evidence?Effective Politics and Policy Making in the New Africa

All rights reserved 2015 | Nkunimdini Asante-Antwi | Metis Decisions LLC

Africa is Rising

Who are the key drivers and what can the laggards learn? What role for

the African Entrepreneur?

A Broader View

Fact Sheet

54 Countries – 2nd most populous after Asia (estimated at 1.1 billion)

Libya was the first to gain independence in 1951.

South Sudan was the last; on July 9, 2011 from another African country.

Home to world’s leading cocoa output (2/3 of global production)

30% of world’s mineral reserves.

Zimbabwe; 2nd largest platinum reserves.

2nd most widely spoken language is Arabic (100m+)

…The Narrative

Africa’s Basket

In 2012, total GDP of Africa was $1.3trn, equating to

2.5% of world’s $54trn (source: Old Mutual

Investment Group). GNI per capita; South Africa

($6,800), Nigeria ($2,850).

124 kWh per capita annually.

Africa’s poorest households are spending around

$10 per kilowatt-hour on lighting—20 times more

than Africa’s richest households. Compare, that to

U.S where national average cost for electricity is

$0.12 per kWh and in the United Kingdom is $0.15

per kWh (Africa Progress Panel).

Notwithstanding freedom and democracy, popular

participation and social inclusion remain crucial

policy imperatives.

Trade & Investment

Infrastructure

Democracy & Governance

B.R.I.C.S or B.R.I.N.C.S?

40%

Business Constraint

- Infrastructure

Governance

Structures AMU/UMACEN-SAD

COMESA

EAC

CEEAC-ECCAS

CEDEAO-ECOWAS

IGAD

1. Africa Union – 8 Economic Regional Communities (REC)

2. African Development Bank (AfDB)

3. Civil Society Organizations such as; IMANI Ghana (Ghana), African Economic Research Consortium (Kenya), Al-Ahram Center for Political and Strategic Studies (ACPSS) –Egypt, Centre for the Study of the Economies of Africa (CSEA) (Nigeria) etc.

SADC

Lagos Plan of Action

1980-2000

The Business Environment

4.5% Real GDP

Growth Forecast

2015 (AfDB)

6.1 billion (70%

of global

population) to

access SMART

phones by

2020.

“

”

Behind every corrupt politician

are 10-20 corrupt businessmen.

- Mo Ibrahim

Assessing Policy and Political Risks

Policy Discontinuation

Supply chain exposure; an emerging political risk for

African entrepreneurs.

Political victimization.

Over-emphasis of FDIs at the expense of building local

entrepreneurial capacity.

Annual

cost of

corruption

- A.U Study, 2002

“

”

Knowledge is power. Information is

liberating. Education is the premise of

progress, in every society, in every family.

-Kofi Annan

The Social Sector – Emerging Risks

Libya and Botswana leads Africa in Human Development Index (HDI) performance.

Rwanda, Burundi and South Africa ranks #7, #17 and #18 respectively on the Global Gender Gap Index Report, 2014, ahead of U.S.A and U.K

Language and culture continue to be a barrier to regional integration.

The teaching of critical thinking and problem-solving at all levels of the education ladder, particularly, tertiary, remains a key challenge to business growth and wealth-creation.

Socio-cultural Risk Indicators (SRIs)

World University Rankings

No African University in first 200,

not even South Africa.

Fudan University, China (193) and

Lomonosov Moscow State

University, Russia (196) all

members of BRICS, are featured in

same. (Source: Times Higher

Education World University

Ranking.)

Human Development Index 2014

Countries Index Ranking

Norway 0.944 1

Australia 0.933 2

Libya 0.784 55

Botswana 0.683 109

Egypt 0.682 110

U.K 0.7383 26

Last 18 countries

all in Africa

OWNERSHIP

STRUCTURES“

I’ve always said we must

overcome our thinking of being

the sole owner of our businesses,

and that is one of the drawbacks of Ghanaian businesses.”

-John Dramani Mahama

(President, Ghana)

Less than 15% are

Limited Liability

Over 60% - Sole

Proprietorships

Others

40% of GNP in low-

income economies

produced by informal

sector (World Bank).

Economy

Overview

Strategy & Structure

Average growth over last 10

years

Financial Intermediation

Infrastructure

Global trade balance

Frontier market debt finance

Data Source: AfDB Statistics Dept.

Euro Area 1.5%,

2015. IMF

Japan 1.0%, 2015

Economy (Cont’d)

Fiscal Performance

-0.09

-4.4

-4

-5

-6

-5

-4

-3

-2

-1

0

2008 2009 2010 2011

Monetary Development

Ghana: Deposit/GDP increased from 20.7% in 2010 to 21.4% in 2011. Debit card usage (% age 15+) is 11.4%. DMB asset/GDP moved from 23.9% in 2010 to 23.1% in 2011.

South Africa: Deposit/GDP was 59.1% in 2011 from 59.2% prior year. Debit card usage (% age 15+) was 45.3% in 2011. DMB Asset/GDP inched downwards to 78.8% in 2011 from 82.5% in 2010.

Cash Surplus/GDP (%)

Data Source: Africa Devt. Indicators

(ADI), IMF

Data source: Global Financial

Development Database (GFDD), IMF)

Equity & Debt Markets

South Africa: Mutual funds assets to GDP/ratio was 30.6% in 2011, down

from 38.9% in 2010. Stock market capitalization to GDP ratio trended

southwards from 200.9% in 2010 to 145.2% in 2011.

India: Mutual fund asset/GDP ratio (2010: 6.6%, 2011: 4.6%). Stock market

capitalization/GDP ratio was down in 2011 (68.7%) from 82.8% in 2010.

Brazil: Mutual fund asset/GDP ratio (2010: 44.1%, 2011: 46.5%). Stock market

capitalization/GDP ratio was down in 2011 (58.3%) from 67.1% in 2010.

Ghana:

2010: 9.5%

2011: 8.4% Data source: Global Financial Development

Database (GFDD), IMF.

Technological

Changes

Mobile subscriptions in Q1 2015 was

910million (Africa), according to Ericsson

Mobility Report 2015. This includes 21

million new subscriptions. Africa, Asia and

Middle East are expected to drive global

growth going forward.

Growth has been

driven broadly by

sector liberalization

that has allowed

competitiveness and

investments in

infrastructure by

private actors.

2012: 14.6% | 2013: 16.9% | 2014: 19.2%

Internet Users per 100 People

Source: Internetworldstats.com

High-speed

broadband | Fibre

& Wi-Fi Networks

$500m

E-commerce or M-commerce?

What Are the Lessons?

Leaders and Laggards

Governance & Democracy

Leader: Ghana or Botswana?

Increasing use of law courts to

settle political disputes and

protect human rights.

Strong and vibrant media with

assertive civil society sector led by

IMANI Ghana.

Botswana adjudged #1 Global

Rule of Law Index according to

World Justice Project (WJP).

C.A.R – Laggard?

“…the security situation [in CAR]

remains volatile and clashes

between anti-Balaka [militias]

and ex-Séléka elements continue,

while criminal activities aimed at,

among other things, controlling

the country’s natural resources

are increasing.”

-Ban Ki Moon (UN Sec Gen.)

Human Development

Libya – Leader?

Ranks number 1 in Africa and # 55

globally on the 2014 Human

Development Index.

Included in the High Human

Development category with

countries such as Russia, China

and Brazil.

Niger – Laggard?

Ranks last (187th) globally.

Included in Low Human

Development category with

countries such as Eritrea, Chad

and Malawi.

Source: Human Development Index, 2014.

Economic Growth

Nigeria – Leader?

USD 568.5 billion GDP by year-end 2014, according to World Bank data, making Nigeria the 22nd

biggest economy after Sweden.

The country’s GDP outstripped South Africa in 2014 to be the biggest in Africa, growing at 6.3% in 2014.

This notwithstanding unemployment is still high, estimated at 25.1% in 2014.

Zimbabwe – Laggard?

Average real GDP growth over

decade covering 2003-2013 was

-1.6%.

Experienced strongest

performance in 2010 (9.6%),

slowing down to 6.0% in 2013.

High inflation

Source: Global GDP Ranking, 2014. World Bank.

Technology

South Africa – Leader? Internet penetration was 49% in

2014, compared to 38% for Nigeria.

Estimated 133% mobile phone and 47% Smart phone penetration compared to 72% and 29% respectively for Nigeria on same metrics.

13% of age 15yrs+ used electronic platforms for payment in 2011 compared to SSA average of 2.1% same year. (GFFD)

Sierra Leone – Laggard?

7.2% mobile penetration as at

2012 (least in Africa).

Only 1.7% of the country’s 5.7

million people use the Internet.

Source: Internetworldstats.com

Financial Intermediation

South Africa – Leader?

Highest DMB’s deposits/GDP ratio

(59.1%) in 2011.

DMB’s asset/GDP ratio very high

(82.5%, 2010), enabling big-ticket

deal financing from domestic

sources.

Uganda – Laggard?

DMB’s asset/GDP ratio quite

modest (19.1%, 2011)

Deposit/GDP ratio in 2010 was

16.7% while 2011 registered 17.8%

Source: Global Financial Development

Database (GFFD), World Bank

Ease of Doing Business

Mauritius – Leader?

Aggressive reforms implemented to improve the ease of doing business. Score: 28 out of 189 economies surveyed by IFC.

5 procedures to start business in 6 days with cost 2.1% of per capita income.

4 documents to export goods in approx. 10 days. Cost per container; $675

5 documents with 9 days import turnaround time, costing $710 per container.

Eritrea – Laggard?

Ranks as the most difficult place to do business (189th) across 189 economies survey by IFC in 2014.

It takes 13 procedures in 84 days with 41.5% of per capita income as cost to start a business.

It takes about 490 days and approx. 22.6% of claims sought to enforce contracts.

It takes an average of 54 days for import/export.

Source: Doing Business Report 2015, IFC.

Globalizers and Localizers

The Stark Evidence

Meet Eric Kinoti

Company: Shades Systems (EA) Limited

Founded: 2007

Sector: Light Manufacturing (Tents)

Role: Founder

Asset Size: Not Available

Annual Revenue: USD 1million

No. of Employees: 18

29yrs

Kenyan

“It was never easy, and it will never be easy to start up. I faced a lot

of difficulties, so many hurdles and obstacles…but I was

determined to make my dream a reality.”

Meet Bright Simons

Company: mPedigree Network

Founded: 2007 (Re-launched 2009)

Sector: Technology

Role: Founder and CEO

Asset Size: Not Available

Annual Revenue: Not Available

No. of Employees: Not Available

Some Key Clients: AstraZeneca, Sanofi, Tropical Cables Conductor Ltd.

Ghana

“…that experience opened my eyes to a whole new world of

fighting the system—of being an activist. And this led directly

to my becoming a technology innovator.”

Meet Patrick Ngowi

Company: Helvetic Group

Founded: 2007

Sector: Renewable Energy (Solar)

Role: Founder and CEO

Asset Size: USD 15million

Annual Revenue: USD 5m (2013)

No. of Employees: Not Available

Key Markets: Tanzania, Uganda,

Burundi.

29yrs

Tanzania“You should start small, with lean operations,

and scale up as you go along. I started my solar

company being the only employee, going on roof

tops to install one solar panel at a time.”

Meet Tunde Kehinde

Company: Jumia Nigeria

Founded: 2012

Sector: Online Retail

Role: Co-founder (Resigned 2014)

Asset Size: Not Available

Annual Revenue: Not Available

No. of Employees: 1000+

Key Markets: Nigeria, Ghana,

Egypt

31yrsNigeria

Meet Khaled Shady

Company: Mubser

Founded: 2013

Sector: Technology

Role: Founder

Asset Size: Not Available

Annual Revenue: Not Available

No. of Employees: Not Available

23yrsEgyptian

“Mubser was our team’s graduation project and we

decided to take it to the next level to make it a startup to

support the millions of blind and visually impaired people.”

Meet Winifred Selby

Company: Ghana Bamboo Bikes

Initiative / Afrocentric Bamboo Ltd

Founded: 2010

Sector: Light Manufacturing

Role: Co-founder

Asset Size: Not Available

Annual Revenue: Not Available

No. of Employees: Not

Key Markets: EU, U.S.A

20yrsGhana

“Because we discovered that, there were many bamboo

plants in Ghana people took for granted. So we wanted to

add value to that to address the transport needs of people.”

Now, Meet Joshua…

$3/day

30yrsPoor…

Abasua Mountain

Farming

Tourist Support

Services

Micro-trading

Meet David Too…

Dropout

5yrsChild

Laborer

21.8%

Child Labour (5-17yrs)

Source: GH Living Standards Survey 6

Finally, Meet Ama Akyea

School Attendance Status (5-17yrs)

Never Currently Used To

Female 6.1 88.3 5.6

Rural 9.2 85.45.3

Urban 2.2 92.7 5.1

Alone

11yrs

Broken Spirit

Data Source: GLSS6

33% of 26million – 5-17yrs

The Role of African Entrepreneur

Restoring Human Dignity

South Africa

Ave. unemployment

last 15yrs

25.27%

Where Do We Start?

Empathy

Collaborations and Business

Combinations

Formalization

Mentoring and Coaching

Long-term Investments

Scaling Globally

Collaborate with Higher

Education

Responsive Regulation

Bridging Infrastructure Gap

Fiscal and Monetary Discipline

Institutional Strengthening

Tax Regime Rationalization

Wave of the Future

Mobile/Data

“…value chain gaps

persist in traditional

sectors; agric and

industry.”

Personal

Corporate

Public Policy

The End

Out of Darkness comes a great

light

Out of despair rises new hope

Out of the concrete, the flower

grows

Out of stillness a wild wind

blows

Wisdom for the wise

Poetry for the young

Arise and take your place

under the sun, Africa.

Presented by

Nkunimdini Asante-Antwi

Founder, Metis Decisions LLC

+233 505 767 865

+233 202 952 658

[email protected]