7-8 JUNE 2017 / Tour & Taxis / Brussels

Opening Session EU-Africa Business Forum

Opening Session EU-Africa Business Forum

EDD17 - Replay - Opening Session EU-Africa Business Forum

special event
A3
Wednesday, June 7, 2017 -
09:00 to 10:30

Key points

  • Africa’s population will double to 2.4 billion by 2050. This demographic boom is driving domestic demand and creating great supply-side opportunities.
     
  • Sub-Saharan Africa needs to create 18 million new jobs a year. Investing in SMEs and entrepreneurs is the key to success.
     
  • Banks and investors need to re-evaluate their perceptions of risk in Africa and make working capital more easily available to entrepreneurs. Angel investment is currently non-existent.
     
  • Education is vital, not only in schools, but lifelong learning in technical, managerial and financial skills. Africa should make use of online learning tools, focusing on women and girls.
     
  • Governments must reduce the risks for investment through better infrastructure, legal certainty, fair rules, anti-corruption measures, tax breaks and blended finance.

Synopsis

More than half of the world’s population growth to 2050 will be in Africa, which will see its population double to 2.4 billion. By mid-century, Africa will be the only region in the world with a population younger than it is today. This demographic boom is driving private consumption, creating a €2 trillion domestic market by 2025. Seven of the 10 fastest growing countries in the world today are in Africa. With so much demand, the supply side opportunities for investment are enormous. While agribusiness, sustainable energy and digital technologies have been defined as key sectors for investment, every single challenge in Africa brings an opportunity to create jobs.

Half of all Africans are under 25 years old. Their hunger for change risks turning to anger if there are not enough jobs. Sub-Saharan Africa needs to create 18 million new jobs every year until 2035. The revolution in digital and mobile technologies is enabling more young people to become entrepreneurs. But they lack access to capital. Angel investment is non-existent.

The African Development Bank, with the European Commission, will soon launch the Boost Africa fund, which aims to finance venture capital in specific countries. But commercial banks and investors need to re-evaluate their perceptions of risk in Africa and make working capital more available to entrepreneurs. There is potential to create a “Silicon Savannah” in Kenya, a Silicon Valley-style cluster of entrepreneurs with ideas and expertise. But banks currently demand assets as collateral for lending; instead, they need to move towards a Western model of investing in business plans.

Many young Africans lack the financial literacy to write a decent business plan. They need to learn the basics, like how to create a profit and loss statement (P&L), and how to write a marketing plan. They need training in soft skills and creativity to give them the confidence to take risks. Much of the void in the labour market is not the lack of jobs, but a lack of skilled people. Lifelong learning is required – and it needn’t just come through formal education. Google, YouTube and MOOCs (Massive Open Online Courses) offer great opportunities to learn. Educating African women and girls is a particular priority. Even once they are underway in business, entrepreneurs need mentoring to succeed.

Governments need to create a more attractive investment environment, reducing the risks that put off many international investors and businesses. Better infrastructure is vital – for example, the Mombasa-Nairobi-Addis transport corridor. Governments need to root out corruption, improve legal certainty and ensure fair rules for business across the board.

Governments can help create jobs by offering tax incentives to big business to contract out to entrepreneurs. And governments should seize the opportunities offered by blended finance to reduce the risk of doing business in the 20 of Africa’s 54 states defined as fragile. The African Development Bank, which invests just 4 % of its resources into fragile countries, is keen to scale up this investment but needs governments’ help to tackle the risks. One practical measure would be to increase access for businesses to local currency financing.

 

Insight

We talk a lot about South-South cooperation. But Africa can learn a lot from Europe’s achievements integrating over the last 60 years. By stitching together lots of small countries, too tiny to compete globally, the European Union has transformed Europe. African regional integration could follow a similar model. To grow, Africa needs to free up the flow of goods, people and capital within the continent.
  • Moderator
    Chris Bishop
    Managing Editor of Forbes Africa Managing Editor
    Forbes Africa
  • Mohammed Dewij
    CEO
    MeTL Group
  • Ambroise Fayolle
    Vice President
    European Investment Bank
  • Pierre Gattaz
    President
    MEDEF - French Business Confederation
  • Pierre Guislain
    Vice-President for Private Sector, Infrastructure and Industrialization
    African Development Bank
  • H.E Quartery Thomas Kwesi
    Deputy Chairperson
    African Union Commission
  • Neven Mimica
    Commissioner for International Cooperation and Development
    European Commission
  • Vimal Shah
    CEO
    BIDCO Africa
  • Rebecca Stromeyer
    Founder
    eLearning Africa
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