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The new AfricAEmErging opportunitiEs for businEss and africa
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The new AfricAEmErging opportunitiEs
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FOREWORDThe world is waking up to a new africa. The predominant theme inthe emerging narrative is no longer war, famine and disease but ratherstrong economic performance. The resources industry has played animportant role in this shift but economic diversication is coming tomany African countries, where an expanding consumer base is fuellinggrowth in other sectors. And measurable improvements in governanceand human development suggest that these changes will be lasting.
Investors are realising that africa is good for business. Strong
economic growth, business friendly reforms, mature nancialinstitutions and some large economies (South Africa, Nigeria and Egyptamong them) add up to an enticing proposition. It is no wonder thatforeign investment in Africa is showing strong growth and that returnson investment in Africa, both foreign and domestic, are among thehighest in the world.
Increased investor interest is having a benecial impact on manyAfrican countries: business is good for africa. Investment iscreating jobs which have a wide ripple effect. And foreign companiesare helping to develop domestic industries through the transfer of skills
and technology and by generating demand for extended supply chains.A sharper investor appetite for African opportunities is sparking avirtuous circle of developments. As companies wake up to Africaspotential, they are making investments which develop local industries.As those economies grow, they present yet more opportunities toinvestors and spur governments to make their business environmentmore attractive to investors.
Africa has turned a new page. The prospects look bright and this is onlythe start of the story.
Zad Torres-Ramandebe a a
Mcael LalorpeE & Y sh a
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CONTENTS
Aas pospts a mpovg 04
sylv sl, p me, d be,iel fe c / the Wl bk g 07
ny dbe, He reeh, E gvee
pe idasa he ie dey a 09
Aa s good o bsss 11
cyh cll, che Exeve oe, al ae l 18
gey dve, che fl oe, cdc g l 20
V. shk, cEo Ee, he mle E, a he ae,s chee l 22
Bsss s good o Aa 24
gh mky, che Exeve oe, sabmlle l 25
pe Eh Ke, insEad ch pll Ey V fellw, cee gll devele 27
ital colsos: Tkg Dtly 29
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The new AfricAEmErging opportunitiEs
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AFRiCAS pROSpECTS
ARE iMpROviNgthee ew a ve ee.f ee, ll a hly ee ye ee; e , llly, e , vey, e ee e key hee h ve.Hweve, he e he cl W ke eve h a e. th
h w ve e y le-ee ll, e elye hw e he 1990.ae eely,v he
elve ly eqe e wh evele. i w h
e l, e e ee ee, e-we eeeve, ely lel yeehee, y a eewee ee el e.
thee l he hve hele ee eve y a e
h h ve ke ee, ely ve e vee. fhee, weee, ehe wh ey vee ll vee, he e ,lly ee level lee, , lyevel ey e, e ll
e le wh h a.
bey he el, hee w vee y h evee hvew, e h he e e evelel e ahve ve ely ve he ee h a lele e wh jey:
a e h e hle ve he ee. i ee Wl E olk e (al2011), he imf e 5.5 e e gdpwh s-sh a 2011 6e e 2012, wh wh e e lke gh, Key, Eh,al, bw, tz, u ne1.
1 IMF, World Economic Outlook: Tensions from the Two-Speed Recovery, April 2011.
African economic outputhas more than doubledover the past decade
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The new AfricAEmErging opportunitiEs
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a ve h wh h eehe ee y, ee y
he a hhey e. Hweve, he eey h hele ehe ehe. rewe e, pl clle,e he le wh lkely he wely ee. fe vee el ex wll e vee he e level (e whe exle a ve elykw -l e), h h wllhve ly ve a
e wh2.
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i hl eh e heh he wh e y vla e hve ee eve e. a eeh e y theEconomis, 6 a e hve ee he 10 e w ee he wl ve he ee; 7 ae e e e he 10e w ee ve he ex veye (ne, Eh mzqe
2 See Paul Collier, The Plundered Planet: Why We Must and How We Can Manage Nature For Global Prosperity, New York:Oxford U.P., 2010; and The case for investing in Africa, McKinsey Quarterly, June 2010.
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africas prospects
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The new AfricAEmErging opportunitiEs
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africas prospects
are improving
3 The Ibrahim Index provides a comprehensive ranking of African countries according to the quality of governance in its broadest
sense. It uses 84 outcomes-based criteria across 4 main categories (and 13 sub-categories): a) Safety and Rule of Law; b)Participation and Human Rights; c) Sustainable Economic Opportunity; and d) Human Development.4 The World Bank, Africas Future and the World Banks Role in It.5 In their paper, African Poverty is Falling, Xavier Sala-i-Martin and Maxim Pinkovskiy reveal that there has been a sharpreduction in poverty and income inequality since 1995, and that, further, this trend has been widespread right across thecontinent. Alwyn Young, in The African Growth Miracle, shows that African household consumption has grown 3 times fasterthan what is generally reported in international data sources.
e h l). fhe, the Economise h ve he ex ve ye, hevee a ey wll w eh a e.
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e e ve he 15 ye he h hee h l ee ll l e. the ely h a e hve e e w e y ey. i 2011, le
17 a e e hele hve
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ale he ele ewh ll e, hee h l
ee vee e he hevele . a heWl bk, e he mlledevele gl h ee ely h y e (h mlw,gh Eh) e lkely eh he l, y 2015 he heee. a vey e w ll e eee ye, 59 ee 1995 50 e e 2005. chlly e e el; HiV/aids
lz; y le ee e a h ywheeele.4 tw he ee lyl ek he vew h a vey e eqly ll ly, h,veely, el hehl ly 5.
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Source:MoIbrahimF
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* Excluding countries less than 10M populationand Iraq and Afghanistan
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ch 9.5
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The new AfricAEmErging opportunitiEs
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SYLViA SOLf/ INTERVIEW
SYLViA SOLfp me, d be, fl pve se devele Ve peey,iel fe c, the Wl bk g.Wh llee, Davd Bdgma, rel me, ivee cle, ivee cleavy seve a, Wl bk g, Mlssa Jos, se pve sedevele sel, ivee cle re avy, Wl bk g
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av yo s as t majo tds Aa?
pee a ve. m, exle, ke 20h llly heee e, llwe y sha (34h), bw (52), rw(58h), gh (67h). o he he h,9 he 10 ee ke lwe e s-sh a. o vee, he ell k 137h he wl. th eh ll ee ve a
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Regulatory reformscan send a strongsignal of governmentscommitment to soundinstitutions and policies.It is becoming easier to
do business in Africa
6. The Doing Business project analyzes regulations that apply to an economys businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and closing a business. Through the indicators the project is able totrack changes in those areas across the world.
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ye, h e s-sh abk f, gh, m, mlw,ml, m, mzqe, ne,
rw,
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e exle e he el, e eqe e ee 223 ee e e 2005.ty, ke w ee heey 8.9 e e e e. rw l e ellel l ew y lw,lvey lw, ee lw, ll e ehe ve ey h e.
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Wh e e e, ely ee hve ee ee. gvee ely e hee . a eeee h e e vy he l e hh e je he wy eevey.
se 2007, e h 20 a veehve e d be ewk ly e. they hve e he
eee ey e ely e, e e lle vee, e. se hve e e:rw e he 100 llly;seel e he 10 a.Lee eh y e heel l he .
c-y ly h l hwh ely e ee
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a ex evele ve he le ye h ee e ye ee-le. d ee-le eve
m rw, e vee eeeve 10-15 ee exhe kwlee ee heely e e. m, rw, bw e he e k hele.
...reformers recognise thatbringing more economicactivity to the formalsector through businessand job creation is themost promising way to
reduce poverty
SYLViA SOLf/ INTERVIEW
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7 Graham, Paul. (2010). Strengthening Cooperation Between Europe and Africa on Democratic Reform, Challenges and politicsof supporting democratization processes in Africa setting the scene, 11 October 2010. Paul Graham is the Executive Director ofIdasa.
nAncY DuBOSSeHe reeh, E gvee pe idasa heie dey a
wat s t td gova ad
a t sss stos?
peh he ee k l ele whh e e ee e el le he e. 2011 ye a;14 e wll hl eel ele.sevel hve ley ke le, ly he eee, whh le he sh s, eelele u ne. sll e e ce, he derel c, Ey, Le.
o he he h, hee e he exh e Zwe, Eql ge,
swzl . b hee ee ee le.a heee -gh, whee vey lelyeeele w
ee y ll e; Key whh he k vlee 2007 w
h lee elly ee; he e Leh evl e w he l y.f ee l, eh hey e ee eqe he e. Whee y h ehh he e , he eee h e hee. dee elely he le ey he le wh ey7.
a ze hve w e hee he lv he
e e vlle hee. a aeel vey (2008) mzqe,e-h ee he lv ly vey . fy-w e e
sh a eleve h he e he y e h we e welve h . Eve hee el ee a el ve l eve,whh, , ee lewh. ree eve t, ale, Ey hve hw h lye wh l ze ee he wele e l llly.
ho dos dmoat gova otbt
to sstaabl soooom got ad
dvlopmt?
clely, le le evele ke lewh ey; eqlly eh ee lwy ke hee e ly he. b eeh exeee e h -ee e le he e e, whle ee hve eey el e ve e. fhee,he le e vee ve -e wh evele y e ee weh ey ze.
i eelly ee h ee ly ee; h , he well-ewe e e e
he e whe e -eevele . the vey lly
2011 is a big year forAfrica; 14 countries willhold presidential elections
nAncY DuBOSSe / INTERVIEW
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e ee, lk ly, leeh v.de vee ee h
y e ye whh llw heeee e lze eqlee. iee he y hea che hve e vee e he ele h h he e wy ee h a eewee e qly e evey e he lve.
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good gova?
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ahe he Exve ietey ive (Eiti), l ee , whh eek eevee he exve e evel e y e he
ll l y ye vee evee. twey- ehve heve Eiti e , xee whh e a e lce, de rel c,g, ml Z. fy he wlle l, e velye he Eiti e. the Eitih l w he ve 80 llvee .
thee e l e l elyh e eke he e whh hey e. E heexl ll ee . cl ll e ee lz ex he e w lke hee e hhe he hl ve .
oe ee vke ee, eek. i vl he y--y ey; llyhe ve e. se e lly e he le e ee, veee, , l eexee, eve elvey. theve e hl ve whee hey e ye. the ee h wll ly ee e e ly ee ew eqle
ll ly.
The private sector shouldadvocate where they canfor transparent systems
nAncY DuBOSSe / INTERVIEW
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8 Brazil, Russia, India and China9 How Exciting is Africas Potential, Goldman Sachs Strategy Series, October 2010.
AFRiCA iS
gOOD FOR buSiNESS
te, vee e e ll e he ew a wh
ve.thee e eeh el e
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pl, tkey, s a. Ey ne e eevely he 40h 41 le ee he wl (he he qle), lly ehmly, he he lke iel,iel, chle, ll he E celEe e (exe pl), newZel Ve. bh ne
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Africa as a whole andmany individual Africancountries compare veryfavourably with otherEmerging and Developingmarket regions
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fg 5:the elveze aee y
africa is
good for business
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e e, e e
wll e e ll e.a key ele wh veeh ee he e e elye. i he l ye, exle,gh, Ey, Key, bw, bk
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GO
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africa is
good for business
A key enabler of growthand investment has beenthe trend of businessfriendly reform
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s, a h ll he k ell vee lee, e l
wh,llye,
lyveve whh ve e.i hl
eh e he h e vee a e hehhe ( he hhe) he wl. i
, h ly ee e. oe he key l 1999 ue nceee te devele(unctad) e10 w h he 1990ly fdi a w hheh he h e he wl.a he exle e w he e
us fdi a, whh vee e e 29 e e ewee 1990 1997,lly hhe h y he e he e e.
th e hh vee e a e y evel eee e11, l ee bcl g y 40 ae ( hey ll he achllee). a us$100 vee
SOuThAfricA
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Relative World Rankings
africa is
good for business
...during the 1990s
protability from FDI intoAfrica was higher than inmost other host regionsin the world
10 UNCTAD, Foreign Direct Investment in Africa: Performance and Potential, 1999.11 These include Boston Consulting Group, The African Challengers: Global competitors emerge from the overlooked conti-nent; Collier and Warnholz, Nows the Time to Invest in Africa, Harvard Business Review, Feb 2009; Warnholz, Is Investmentin Africa low despite high prots?Working Paper, Centre for Study of African Economics, 2008; McKinsey Global Institute, Lionson the move: The progress and potential of African economies, June 2010.
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14
l ex he 40 eleea e nvee 2000 wlhve w y 25 e e cagr hh2009, ve 11.8 e e he msciEe mke ex evee he s&p 500.
ahe el y y Je-LWhlz he cee he sy a Ee ox uvey
ve evee hh e a hee ee eeve. He,, e l l 7000 le
e,ve ll a elee a(ch, i,Ve,bleh,
ie) Lae
(bzl, ae, pe, chle, cl,uy, p py) e.a hee key vee ee, ely , roE roc, he a elly e he a L ae e.
nex, Whlz, e he Wl
bk rel p Eee
devele (rpEd) vee hee le le e le vyze he (hee he e 15 e s sh a, 8 sh ae well bleh, i Ve). the lle eee hee hve le ve elyee, hele ely ve 500. a, he hw l (ve20 e e) roc ae.
flly, Wlz lye jee ee s-sh ak ke ne, gh, Key,n bw. ove he 5 ye 2002-2007, el e heeke wee le 30 e e, lle h s&p 500 e.
africa is
good for business
Again, the data showssubstantial prot margins(above 20 per cent) for
most African countries
fg 7:iexeee he bcg a
chllee
2000
T-ya total saold ts
2001 2002 2003 2004 2005 2006 2007 2008 2009
1000
800
600
400
200
0
nvee1999
(nvee1999100)
nvee2009
se: bl; th ree; bcg ly.ne: sk iexe e e he j l k exhe: tsr he a hllee e wehe y ke l.the llw e e le hve vlle tsr : sh, ona g, al Ezz g, oe chee ephhe, Ey, Elewey cle, cevl, ryl a m, sabmll, ge Ell b a e ivee.1d vlle ly e fey 2005.
a chllee
msci
Ee mkes&p a1
cagr19992009
(%)
24.8
11.823.6
-0.8-5.8s&p 500
tx
ph
t:Wrlbk
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ove he 2 ee,sh a bewee(sab) ew l
sh a e,
y he wle le ewe(w sabmlle)
75 e xe, ely70,000 ele. sabmlle
e e 1 2 ve 90 e e he ke whhhey ee lch (e 1), i (2),e 1 ll 6 ehey ee Lae, Ee(ly E), usa (2), he a ke
hey ee . gwh s-sh aw he ee h
ll wh ey, y a ve h sabmllee. a e key he whe, ve $1.5 l exee hee vee hee ve he ye.
sabmiller
mtn
i he e 15 ye,mtn ew
e he le yl he Jhesk Exhe. f sh a , yee 21 e a he mleE. i 2009 ( 15hye exee), mtne he 100 lle ke. mtn
e 1 2 19 he21 ke whh hey
ee, l sha (e 2, wh 32e e ke he);ne (e 1, 50 ee); gh (e 1, 55e e); i (e 1 2, 40 e e). neh ee lly e y mtn.f q 1 4
lee 2001, hey hvew he e
e 35 ll (ve50 e e he eke), l yeeee ve us$1 evee ne( 61 e e Ebitda).
Some African
Growth Stories
africa is
good for business
If there was more of Africa,wed be investing in it
Gaam Makay, SABMiller CEO.
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africa is
good for business
bharti airtel
bh ael e ew ee ee ke ve a. the iele y,wh ve 150 ll lee i, hZ a e l
ye $10.7, wh eee vee 16 ae (bk f,ch, c bzzvlle,de rel c, g, gh, Key,m, mlw, ne,
ne, seyhelle, seLee, tz, u Z). o he k h q, wl e h ibmwl e wh bh le he eeit eve he16 a e ee it ye
veee he ee ll he l, eee, eve, e ek eve. th wllly ex he ibmeee a well.
Africa is a huge continent and will remain a very important new
market. My focus for the next one to two years is to execute thebusiness model and strategy in these 16 countries and maybelook at other markets after that. As a continent, this will havebigger potential than even India.
MAnOJ KOhLi, HEad of bHarti airtELs intErnationaL opErations
Lilongwe
SUDAN
NIGERIA
NAMIBIA
LIBYA
CHAD
SOUTH
AFRICA
UNITED REPUBLIC OF
TANZANIA
MORO
CCO
ZAMBIA
CENTRALAFRICAN REPUBLIC
TUNISIA
UGANDA
CTE-D'IVOIRE
LIBERIA
SIERRALEONE
BURKINA FASOGAMBIA
CAMEROON
WesternSahara
ERITREA
CON
GO
NIGER
DEMOCRATICREPUBLIC
OF THECONGO
GABON
MALI
MAURITANIA
BOTSWANA
SWAZILAND
LESOTHO
MALAWI
BURUNDI
RWANDA
ZIMBABWE
DJIBOUTI
KENYA
MOZ
AM
BIQ
UE
M
AD
AG
ASCAR
ANGOLA
ALGERIA
SENEGAL
GUIN EA-BISSAU GUINEA
EGYPT
ETHIOPIAGHAN
A
BEN
I
N
TO
GO
SO
MALI
A
Standard Chartered
SABMiller
MTN
Shoprite
Bharti Airtel
Tullow Oil
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africa is
good for business
standard chartered
s chee hee a. they w e 1969 hh ee w k, e whh,the s bk bh sh a, w
e sh a
1862, y he 1960 hexee she, cel, E We a. ty, schee ee 14 s-sh ae, wh ne e
he le ke,
wh wh e ke,l Key, gh Z. i he 2010 lye, he a eelvee le- wh 9 e e
l g ee x.
tullow oil
tllw, ftsE 100 ywh ih , he leeee l y
a. the y e a y 1986 seel, wh vee
ewk l el. i w 2004, wh he q he sh a y,Eey a, h tllwelly e le a e. thq h wh vea l e
e h le hel eeve. se he,tllw h ely w
a eee, w e ew he wh, wh le Jleeel gh hee el vee u.
We started in Africa, Tullow is anAfrican business, its where wehave made our money, its where
we see our future and in verysimple terms, we like it!
AiDAn heAVeY, tuLLoW oiL cEo
shoprite
she h evlve eh-e, vl
e 1979
wh y he le ele he ae (ew 130 e 16 a e, ely 88 000 ele he e). Wh qe ee she h
he e a he
elvely we ehlve. the eyh eelly ee ehe evelly wh lleee. th h llweee ehe vly hevee eh ke.
We have taken a rm decision thatAfrica is where our future lies andwhence a substantial part of ourgrowth will come from
chriSTO wieSe, sHopritE cHair.
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cYnThiA cArrOLLche Exeve oe, al ae l
As a log-stadg vsto Aa, at
attatos do yo s t ott?
a e e e.i he e, wh ll eee e, a eee he le. i h 30 ee llel ee e e h60 el el , ll, l el (pgm),e, kel, , l,, ee, h, xe l.
Ad at kps yo vstg t?
al ae h 93 ye hy sh a. We e-le L ke
ve llke ve 40e e ee sh a we e
lewh h.thee 7
e (l, e hel l) w key e( ee) ee sh a. thee e ll lllyeve ee we e ve he: $20 cex sh a vehe l 10 ye e wh ele l $15.
wat do yo look o vstg?
a e well-ele ke whee wekw he le e elle . i he y, le-e e l weee e le l le 10-20ye he wh ee. thee h e e wh vee l.
tey he key ee. a y we e e lhwh we y. i sh a we ex evee he vee $1.2ll, he hhe sha xye. i e we w kw he e e veew he y ke e
he e-k e. n ye lee l e. bvee e ee e e l .
We l w ee he l vleye. Wh ey e hey w? oe wh j ye, jh e wh ee ey, hh wele h elyee ll e; l ve
y h wll e le well hee; hw e he eve.We he h ely vee a wll eek he ewhh wh ey we le.
We w e ve e whhhve eee je.thee ee l e heel kele h h l lel ye whh hl he le
lw ee wh ll he ee.
Three of our 7 mainbusiness groups operateout of South Africa. Theseare all globally competitivebusinesses and we are
investing behind them
cYnThiA cArrOLL / INTERVIEW
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We w e le w helhy well-ee wke. We veve 100,000 e j sh a. We
e ly e elyeehelh evele h he
eee eey HiV/aidse.b weeeh he we
hlleeh eee
eh wh he lvee.
Lly we l w ee e v e. a veve eve e ee l,we wele e y vee le he hee l ele we. i he
y, l ly e le we ee lk elve v l-ve eh.
peh he key w. We ee
kw h we wll e wk ehe he e l e, e h he l.
wat do yo s as t pmay otbto
tat bsss s as yos a mak
toads Aas dvlopmt?
the e y h he we ke el eee llev el vey e wy.f exle al ae, we e$10.4 lly eve, hee qe h
evel e. a j 1 ee ee vee lle eql 125 e e ll vee e. the hwe e eh ye ee ee ke ee le he e he uK, fe gey he ey ve evele y. b h j e e hee he
y-l, he e j ll ee he v e le vee ewk whh h ll ke le.
...just 1 per cent of ourprocurement diverted tolocal spend is equal to125 per cent of our annual
social investment budget
cYnThiA cArrOLL/ INTERVIEW
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GODfreY DAVieSche fl oe, cdc g l
ho m o yo vstmt s osd o
Aa ad y?
a evele e (dfi),cdc e e wh evel e y ve
ee. se e 1948 cdc h ee l vee a, he e cdc vee ly
ke 75e e ewvee lw-ee 50 ee ew
vee -sh a. i heee, h 44 e e cdc vee l a, wh e vle 877.
ho old yo dsb t ovall
pospts o Aa?
the e a e vey . thee whle h ejye wh 5 e e vee ve he l ee,whh vey e, he e ve he wh. ck e h a he ll gdpwll e 4 e e 2010 7 e e 2030 wll eh 12 e e y 2050.
thee ee wlle veel level llw he vee ke e h weeevly eeve he e-we l e . the Wl
bk Ee d be re lke le h el eve he ee h ve hee el
ee ly a. f exle,gh e e le he eek, ce ve le, rw 12le u w eve le.
wat a t ky dvs ad abls ogot Aa?
cdc ee ve key ve wh a.f, ely e e h lweh, l eve vee lk el a eey e l e he h eeeel vl.f exle, seel l hee llw e ee he l
e, e welh vee.se, e e a hl e eee. a w ly l wll ee e e , hee ee ll e eve ve wh lle fmcg el ee.
th, he l a y
w. n ly e h ve ely vlle, eve le, a le ee y he e wh e l.E ee ee e le he h el.
fh, l w e v wh a. th le fdi, whh e hk he ew wee a vee e. n e eee, hweve, e d
ee whh e le vle hfdi. a he Wl bk 2010ee exeee us$20 e lleee 2009 e he ll l
Good returns are possiblefrom making responsibleinvestments in Africa
GODfreY DAVieS/ INTERVIEW
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. ree e l le vllee l hey lly e ee e ey heh ee fdi e. fhee
ee y a whee fdi wllevelly ex he e.
flly, y e hve lee hey e e we e wh.
wl cDc as a dvlopmtal objtv,
yo xpt a t om yo vstmts.
wat kd o ts a yo sg om
yo vstmts Aa?
a -- ve cdc wk wh71 e he wl h vee l whh ee ewee 5 e e 20 e eee he e, e ve he , ehe wh he qly vee ey he eee.
a cdc we eleve h k eh e e he ehy
e he vee el evele e. ceh ke w e le. fhee, dfi
e cdcjeve ee elve h ee le kelevee a.
plee e
ee . f exle, 2010cdc l e ve us$3 ll xe ve j l800,000 ele. fhee, e 2004
cdc h e ve 1.6. thh ee evee evel e cdc l vee a
w wh ve 877 le ve 400e.
wat do yo s as t pmayotbto o t pvat sto to Aas
dvlopmt?
the el v h he vee ke elye. i he e j ve le, whhle e, eee xe .o eql e, hweve, hw vee j ve ee el . pve e eee wke wh e elye
, whh ee vley ly. fl elyel ee l he ye e whh e ee el k , e v,e, l e v .cely, 70 e e ae vy he l e.the ve e wll ke h h.
wat s yo mssag to ayo osdg
vstmt Aa?
fly, a le h y vehl e vey ely ee he vee e e hee. sely, hweve, hle h ve a ey.a v e ve 50 e,eh whh ee h w
e hllee. Ye he elle ve e he e. bee l hehe e , e heke y ee he el ee vle. flly, a lewhee exy e e leee e l he ly lk. ive a l exy h vee.
Africa is a place that anyinvestor should considervery seriously because
the factors for investmentsuccess are gatheringmomentum
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V. ShAnKArcEo Ee, he mle E, a he ae, schee l
As a bak t a dp-ootd stoy aosst ott, o av yo s Aavolv as a vstmt dstato?
a vey ex veee. the k h ee k
a, w e, ll e, e lew wh , 146 ye. We vey heleve he a y.
thkllyhe ely h he vjy e - ve ey heel
ee a e wlwh eeveee. thee, elvellly eveeeee e he e
ee ke e ey a.b he ew a h e he, whh ley le h qe he e gdp.a s chee, we ee eel wh hh ew l e, le
e. the le h a vee le helly he he ee.
wat mo ds to b do to talat aptal os ad oomgot?
the y ee h he vee llwe ll ee le
a ee. Wheeve h h eellwe, a ee hve ee.g e h ee ee e a e ey e e, eh vee ey. Hweve, e e ee e e y a he ve level ly el el e e e. a ve vee le, he lel
The new Africa isabout much more thancommodities, which
already accountfor less than a quarter ofthe continents GDP. AtStandard Chartered, wesee enormous potentialfor growth throughnancing a new class of
consumers, agricultureand infrastructure
V. ShAnKAr/ INTERVIEW
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ye ee e e h llee wh ee ee.
a he e ele wh e wh a el: , ll e eee. thee ly j le ee wh, well lye vey, v e e e l . mhe ee e e y vee he ve e ll ee,le he wh l ey.
Stadad catd as dtd small admdm tpss as a poty bsssaa a yo say mo abot y?
th e ke he l-he e lely. s chee hlyee he smE e el y e hey eee ey he ee h ee
j wh. p
eqe ly,lyeqe l-e.
o eyly eh el
k whelve,le el
le. a we e el ewk, eve ve e he h h he ll l e he e ele wh ee vve l hee le, l ll ey e ey he.
the e e wh smE e.
a, he e eee exel y. smE ley ewee 30 60 e e
a gdp we e h hee wll e he ve lee wh a ve he ex 10ye. the k eve ve h e ve y elexee le ee llkwlee. s smE le ll e. ce ely eqee he eve h he . the el eve
whee he k he ee vle e a. i ehe y, el wh y e, e he ke.
wat s yo v o t s o Asa, adpatlaly cs, vstmt Aa?
We ee ee he ee cheeeee a, l h hea ve lke i Ke. the eel h a vee
h h a e elee: a le ee elve eee he wle. ive eleve ch iwh; hey eleve wh h e e e, ch ely i ee wh ae. th h hele e he hevl a e. a hy h e h e:l ye s chee e he$10 ll lk q y ile ele y, bh ael, Z a e ev 42 lle 15 e a.
s a vee, le he wh he ve e le ve , ll e eee wll el evee ex e ll hee he e.
Small and mediumenterprises alreadyaccount for between 30to 60 per cent of AfricanGDP and we forecast thatthe sector will be themain driver of sustainable
economic growth in Africaover the next 10 years
V. ShAnKAr/ INTERVIEW
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12 Ernst & Young research, as part of their Africa Attractiveness Study.
buSiNESS iS
gOOD FOR AFRiCA
be ve e levele. a he Wl bk sylv sl,evewe h re, y, a vve e wh ve e
j key wh exe
eveye,llyhe . a ewye , heWl bke vey heeeve ele he
wl, Ve he p.the w eeve wy vey
e wee e j ex .
the e le h e ke aevele y e:
e j e e,ehe wh ew eve. fede ivee ee 1.7 ll j12 a ewee 2003 2010.
Le l hve hh he e heyee hh he vle h le . by e ey wh e ke, ehly l, ve hel l hey evee ll .the vle e ee, l
he x evee, e le le h he e ee. i eel, he he hve hh he ee e exee he hey hve hh he l,hlh e l elye.
thee w y evee
e h y. f exle, peEh Ke, whe evew eeele h se, h ee hele ve h e hve y e. the ly l h h vee w levee heevele e, hey hl e he el eve e hve.
bey h, hee h ee w
ee lve e el ee el h e h le l hve ehe evele ,hh e ele e,elyee, le . theely evee e e eee, l e ew whke e ee ly h. thel h el e hee yhe e h he he l lle el h wekee he
vee le whh, , leh he e l veehl e kl hee leek. ahe e e, e ee eexee wh vve eh h hel le heee h y h ely e k, l he y ele ehe e ee.
s whle a e e
e, e l e e a.
A vibrant private sectorwith rms investing andcreating jobs is key topromoting growth andexpanding opportunitiesfor everyone, particularlythe poor
business is
good for africa
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GrAhAM MAcKAYche Exeve oe, sabmlle l
Yo av agd tat bsss s llg got
Aa. wat do yo bas ts agmt o?
se 2000, whe the Economis leele Hele a, he e he exe; ele h ye, the
Economis y wh he hele a ehel e he le a w e he wl e-w e.E wh h elee 27 a
30 leee.the e eh lle 22 e e he 1990 8
e e e2000. bewee2000 2008,
a gdp ew y 4.9 e e ye, eh he ll vee 3.8 e e. by 2008 h ehe $1.6 ll. fe e h lle 82 e e gdp 59 e e, whlee e hve hk 4.6 e e gdp 1.8 e e. flly, a w he lye a whh gdp lly e he 2009 ll ee.
th eve e wh, eellyve he e e he heey. a h wh h ee vey e , y e vee, (lely) y evee eee l he l ee e h hee he y he eevele. E evele eqewelh e ee, he ly ee h e. gvee ee he welh e, hey ke he.
has ts oom got odd t
asd vd o bsss atvty?
the evee e ly h awh h ee elle y vee. bewee2000 2008, e e vee a
ee $10 ll $88 ll eely we he level ol develeae. d h e, j e e h pe & gle i t m hve ee v hee. a he e e, a h we w eee, w 20 he-we wh evee e h $3 ll.
se h ele, k, e h. se 2000, exle, ele a hve e e h 316 ll ew le hee e h he ee l he usa. a e 1998, he evee a500 le e (exl k) hvew vee 8.3 e e ye.
thee hw h he wl wk a el. i ve wh we sabmlle hve kw y ye ely,h a e e e e.
i at ays dos bsss otbt to Aasdvlopmt?
Le e e he e sabmlle exle.o a ee e hhe h he we ly. i 2008 weke pe Eh Ke insEad lle he e e u. He le h 2007, nlebewee elyee ely elyeee $92 ll e vle. He l h evey j ely e nle
bewee, he he wke e,, ele eee he
It is business thathas been the primarycontributor to the
continents development
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y e he lvelh. thhly 44,000 j he ey whle j le y.
o he ll ey
y h he e, . i ee we heewheeyyk ve e he weee
ee. Wel ve e y ll
ele. o Kks hee eeeeeh e kll ve 18 35-ye l. i he 16 yee e, Kks hve e e h 3,200 ll ee.
sabmlle e l ehevehelhe e kl eee h HiV/a, tb l.thee lly e eve welyee, w exe ly h he we y. We l ee hele lv e ewee hve e we ee. We e ve, , e e kle lhl e.
ca bsss also av a mpat at apoly lvl?
a y lke sabmlle le exeee e vee e y e ehlly, e ele hh . my elyee he j he l ve e, eee vee he he exee.
We hve l e vee ly he ely e. i e
h Leh, mlw, u, swzl Z, we hve ee he l evel l lhl le. i tz sh a, we e wk wh he vee
we ly. al sh a, we hele e e ll e he e ele 1994.
me eely we e eve veee he
eee she s, hv evlyhele he vee elh eyh wkle exe ly. i ll heewy, we e ely kll ee vee e a.
is t mo tat a b do to optms t
otbto tat bsss a mak?
gwh l e e ll vee,
l, wee e ve e he h. thee e hee e lwhee vee l e. f, ve a h e, h , eve h we we. Lk h k ee e he e le aevele.
se, ve he -lle e. th ve e hke ee e vee,
he le lw, e el, ey h, ve vee le,ee , e-ely ee e lk .
a lly, we wl lke ee veek e el e eee.dee e ee vee, -ee wh a e lwe, le e ee h y he e.a e e ll he hhe he wl vee, 50 e e hhe h
he L ae a. mh l eheve y e e ee-e e k ex eee wk ee.
the e h ee sabmlle i h sabmlle h ee a. a ive e , hee w e a, we ve . Wh we ee, e hyh, he h e vee ele ee welh ae wh. i vee ee heele h e, a ee h. Lke ch 30 ye i 20ye , he e l e he e l-.
What we need, morethan anything, is theright infrastructure andsupport from governmentsto enable us to continue
creating wealth andcontributing to Africaseconomic growth
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PrOfeSSOr eThAn KAPSTeininsEad ch pll Ey V fellw,cee gll devele
Yo av pblsd a mb o stds o
t mpat o bsss Aa. wy do yo
s ts stds as mpotat?
a 15 ye , i e wh Hvbe shl pe he e w k he e evee evel e, h e e wee wll -eh e e he e ele h ye ly. i ve h k je l uleve ke e
y he e sh a,
lhe 2008.tllyhee hveee vey ewewll lkely h he he
lk v eyhe csr e. i h ee, ulevee l ve.
se he, i hve wke wh e ee lk he ,l sabmlle u schee gh. my he h hee e wll v he e lk e ely e he . thee e l
h h ee e evele, hey hve lly
e j k he e e he l wh he .
wat s dvg bsss tst
masg t mpat?
f he e h i hve wke wh,evel e e elee he e wh he wh he e e he wh heeke. ue he hee ee heee he e ey, he ve.
wat av b yo ma dgs?
the ee e vewhelly ve he e i hve e .Lk he e e hee e vee, heee elye , vey vle he ey ( e le, xe ).
i 2005, uleve sh a elyee wee ely elyele ee e h r32 ll , he e, xely 100,000 jhh he sh a ey. the h evey j ely e uleve sh a, he 22 wkeeee he y e he lvelh. i l h eee 0.8e e l sh a elye.the ly hw h uleve vle e hh heey e r12.5 ll 2005 -
0.9 e e he y gdp. ce e xe, well he xe
There are a lot ofimportant things that
businesses contributeto development, but theyhave traditionally done abad job of making theircase and engaging thepublic with the data
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y he le, uleve sh aw ele ee r4 ll, 0.9 e e l vee x evee.
sabmlle u y, nlebewee, w ely elyele ee vle e us$92 (l us$55 xe) xely 44,000 j hh heu ey 2007 xely100 j e wke weee evey j ely e nlebewee. i 2009, e 8,000 eee le 70 e e he e
y w
h nle bewee.bewee 2002 2007,e eeeeve-l.nle beweevee
wh ee e he
h, v he wh e ly he e y e vlly.
i he e s chee gh, 2009, ve gh ee,e vee ee whely us$900 ll , e hy he ve el k e he y. th le eeeus$400 ll vle-e he
ey, eqvle 2.6 e e gdp.mewhle, he k ve hele 156,000 j gh, eql 1.5 e e he ve wke.
wat a bsss do to t a
t mpat?
i eh e i hve lke , i eee h e ke ee he . f e, e
he wel y
hve hh he he ke le. Eh ll ,
hel le vehe vy level h hey eeve hve vey le ee he ey. me ly, e ee e e eeh ehehe he .
wat a govmts do to a t
postv mpats o bsss?
ave ll, vee ve e
el -a e.bey h, vee ee ly eve h e vee vee, ehe he ee e ve he wh ll e eee. Whh, e wll e le eeee wh ee vey,eqly, elye.
One of the most powerfulimpacts a companycan have is through thepurchases it makes fromsuppliers
eThAnKAPSTein/ INTERVIEW
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initiaL concLusions:ThiNkiNg DiFFERENTLy
a he ve ee ae k v le evele he e. a ewke a el, hey e kvee whh evel ll e.a he ee w, hey eeye e e ve vee ke he e
eve
e ve ve.the elek heelve:e vee a e
he hhe he wl, whe e ke hve ee e.
b a ll e e.sze he ee l lk: l l ch, he uese, i, Ee, ae newZel. a 50-l e hee whh wee, y e,ve ly y ll we.meve, a e ll h ellly, ehlly elly vee ek e le le.
s whee ?
We eleve ve le e eel y a wh ey:
1. Bld tal mass.
my a e e w hewl ll vee he ee e eh ee hh bzl r, le h i. by e e lle a e, ve
he ze ke hey e ee. ive evel e e l evle k, h ll ly.
2. fos o t oppotts bt tk abot
t log tm.
a gdp wh ee exeehe ll vee le he ex ewye. se vl a e ehev le wh. ce e
vey hee e ll ve l ee. a y lle ely eevele h ely ly h.ce whh ve ely e hl he wl ex ee e.
3. Sl t makt dtly.
Whe e le he whey, he e e e. We e, e,
kle vew he ke el.rel e ze e ly ely le ee. u e, y2025 he un e h ely 50 e e a wll lve y, y hell e-ze. i lh h e,y e elly he eve; ywe kew ee ke el.the w e l e e: vlly , lke y e ee eke e ve e hlle w he ee ele .
4. fos o t damtals.
cdc g l kwlee he le ly a ehele y, heel le ve e he e.bee l
Companies which investearly can get a foothold inthe worlds next emergingregion
thinKing
differentlY
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he he e ,e he ke y eehe el e e vle.
5. Tk dtly abot o to sv t
makt.
the vee el y e hee a y he e hewy he el e le hl
eehve ellleleve.f exle,eewhh le
e le a eke ke vel wy.
i e n wh, heve ell he we y he q heh y he e e ew kee he e he y.ce e l el h whee hve vey le lee, he he ewee eelye ewee eelyee . bee l y a vee, j he e wheehe e e l; h w hee
wve v -llelve e el h hve elly el wy ee ele e, le . f he e h eey ve eve he ee a e, he ke el he. a wh h e he y he he ele a wh evele e.
thinKing
differentlY
For those companies that
are ready to innovate toserve the needs of Africanconsumers, the marketpotential is huge
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