Professional Documents
Culture Documents
Capitalizing on Opportunity
Cape Town, South Africa 4-6 June 2008
Report
The views expressed in this publication do not
necessarily reflect those of the World Economic Forum.
REF: 230608
Contents
Page 3
Preface
Page 4
Summary: Capitalizing on Opportunity
Page 12
Re-engineering Growth
Page 16
Unfinished Business
Page 20
Innovate or Perish
Page 24
Partnerships without Borders
Page 28
Licence to Lead
Page 32
Acknowledgements
As many of those present were aware, this year’s meeting for 10 years or more. They were honoured by
World Economic Forum on Africa was our 18th year of Klaus Schwab, who presented a commemorative gift
activity in Africa. It is a continued honour for us to to each member. A session called “Coming of Age”
maintain the trust of the community and to contribute saw interaction between some of the community’s
to shaping the agenda in the current atmosphere of veterans and several newcomers on the
collaboration, opportunity and partnership. achievements, commitments and aspirations that we
share and on what more can be done to improve the
The 2008 World Economic Forum on Africa focused community’s effectiveness.
on the power of leadership to bridge the gap between
the region’s challenges and opportunities. In keeping We would especially like to thank our meeting Co-
with a trend begun a few years ago, the greater Chairs, who were instrumental in helping us to shape
diversity of both the African and non-African leaders this year’s agenda: Aliko Dangote, President and
present meant that we could do more. We explored Chief Executive Officer, Dangote Group, Nigeria; E.
opportunities in more depth and tackled several Neville Isdell, Chairman and Chief Executive Officer,
difficult conversations on the challenges facing the The Coca-Cola Company, USA; Wendy Luhabe,
region. We were particularly encouraged by the spirit Chairperson, Industrial Development Corporation,
of openness and partnership evident in the South Africa; Sadako Ogata, President, Japan
discussions. International Cooperation Agency, Japan; and Sultan
Ahmed Bin Sulayem, Chairman, Dubai World,
We view this year’s deliberations as further United Arab Emirates.
confirmation, if more were needed, that Africa’s
stakeholders are ready to come together to ensure We expect this 18th meeting nurtured the friendships,
that the region takes advantage of the opportunities at insight and conviction needed to improve the state of
hand. We witnessed a more confident community, one the region.
keen to assert its place on the global stage, one that
has come of age.
Adeyemi Babington-Ashaye
Among this year’s many highlights was the inaugural Associate Director, Acting Head of Africa
Africa Circle – a private gathering of members of the
community who have participated in our Africa
Results of the public vote on the Drivers of Change Results of the participants’ vote at the Africa meeting on the Drivers of Change
that will most impact Africa in the next 12 months that will most impact Africa in the next 12 months
session nurtured an appetite for solutions and for By identifying education and skills development as the
action that permeated the rest of the meeting as key priority, participants highlighted the need for Africa
leaders joined interactive discussions to explore to develop new leaders ready for a more competitive
several of these issues in more depth. and closely interconnected world where collaboration,
innovation and entrepreneurship are the necessary
tools of success. “Business needs to join with
government and civil society to improve skills,”
advised E. Neville Isdell, Chairman and Chief Executive
Officer of The Coca-Cola Company. Public-private
partnerships are essential to addressing the skills
deficit in Africa, Ogata said.
In stressing the need for strong leadership, require. The world is coming to Africa. China and
participants acknowledged that for too long much of India, for example, have made relations with the region
Africa’s ability to prosper was impeded by poor a strategic priority. And the 2010 FIFA World Cup will
governance. But rather than blame colonial rule for be a major opportunity for South Africa and its
their ills, new African leaders are taking responsibility neighbours to showcase the enormous progress that
for their actions and opening up their governance the continent has achieved. There will surely be
practice to scrutiny and open criticism. “Unless we get dividends, but as Colin Coleman, Chief Executive
leaders that see beyond the divides that the [colonial] Officer of Goldman Sachs in South Africa put it, “It is
system left us, very likely we will move one step up to us to see what we do with it.”
forward and two steps backwards,” said President
Kufuor. The continent must find its role in the global village,
said President Mutharika of Malawi. “This is a question
This shift in mindset is critically important at a time that we have glossed over but yet is so fundamental.
when Africa’s abundance of natural resources could We have a role to play in the global arena.” That role is
prove to be the key to unlocking the wealth that its for Africans alone to shape, he concluded. “Nobody
people deserve, riches that must be managed will develop Africa for us.”
properly, transparently and efficiently to ensure that
growth is delivered equitably. “It would be very The 2008 meeting was organized under five sub-
important if we manage our resources and the wealth themes: “Re-engineering Growth”, “Unfinished
they generate so they produce the advances we Business”, “Innovate or Perish”, “Partnerships without
need,” Mbeki told participants. Borders”, and “Licence to Lead”. Within these sub-
themes, the agenda examined Africa’s challenges and
Above all, it is important that Africans themselves take opportunities, and the capacity for leadership to
action, make the choices and find the solutions they bridge the gap between them.
In an exclusive gathering, leaders who have participated Antonio A. Matos (13), Lynda Chalker (12), Maria Ramos
in 10 or more of the World Economic Forum’s Africa (12), Simba H. Makoni (11) and Abel Mkandawire (10).
meetings were honoured. Leading the classification,
Thabo Mbeki and Trevor Manuel have both been present Klaus Schwab thanked members for their trust and
at 17 of the Forum’s 18 Africa meetings. loyalty. He gave each a commemorative gift and asked
the community to stay engaged as the region enters a
Other leaders, with the number of meetings to which new age.
they have contributed, include: Bertram Lubner (16),
While Africa has enjoyed strong economic growth in Business as usual will never be enough. What will it
recent years, spreading peace, stability and better take to bring the business environment up to global
governance, the downturn in the global economy and standards?
rising food and energy prices will make the going
much tougher. This sub-theme explored the need to • Governments alone do not have the capacity to
overcome investment and infrastructure bottlenecks to devise or deliver the solutions. Business clearly has
keep growth on track. a role to play.
• Of special focus should be ways to tap the
• African countries should address deficiencies in spending and investing power of those at the
agriculture to increase productivity and empower bottom of the economic pyramid.
small farmers. • The agriculture sector should be a key priority,
• It is critical for African economies to diversify by particularly for banks which need to find creative
developing higher value-added products and ways to make it easier for small farmers to access
services to allow Africans to gain more value from capital.
their economy. • Public-private partnerships can be an important
• More investment is needed in infrastructure to vehicle to unlock growth in key sectors.
develop supply chains and improve efficiency. • Climate change, water management, technology
• Public-private partnerships are necessary to develop and the African diaspora could also prove to be
education and skills to build capacity. important sources of opportunities for new
• Deeper regional integration is essential to attract investment.
more investment and create market power.
• To boost water efficiency, new models of usage, • Africa needs a consensus on how it wants to deal
management and pricing are needed, as well as with both traditional powers and emerging partners.
stronger linkages across sectors. • African countries should focus on how to deepen
• The adoption of technology will be a major boost to partnerships among themselves.
productivity, allowing economies to unlock value in • Partnerships should not be used to shift blame.
poorer communities and rural areas. African nations should take responsibility for their
• Political will is necessary to boost public investment actions.
in agriculture.
• Innovative solutions such as public-private
partnerships and the better leveraging of existing
distribution and treatment networks could result in
the improved delivery of healthcare.
• Companies stand ready to work with governments
but the latter need to create aligned policy
frameworks to make ventures viable.
“We all believe that agriculture is the “The issue of rising food prices is a
battlefield for economic growth in time bomb.”
Africa.”
Jacob G. Zuma, President, African National Congress (ANC),
Monty Jones, Executive Director, Forum for Agricultural South Africa
Research in Africa, Ghana
Since 2004, Africa has experienced economic growth But with the global economy slowing due to the
of about 6%. The main factors behind this strong downturn in the US and high energy and food prices
performance are evident: the rise in global demand for hurting both developed and developing countries, the
commodities, especially from fast-charging economies continent is likely to find it increasingly difficult to soar
such as China and India, the establishment of peace (see Figure 1). Africa is entering a period when the
and stability in areas once plagued by persistent strength and resilience of its economies will be put to
conflict, better governance in the public and private test. The question is whether the region can turn
sectors, increased budgets, and rising interest among adversity to opportunity and find new drivers of
investors attracted by improved conditions and growth.
expanding opportunities. The good news is spreading
– this year, 31 countries in Sub-Saharan Africa, six At the World Economic Forum on Africa, participants
more than in 2007, are expected to report growth identified five key priorities for the continent to sustain
above 5%. economic growth:
5
• focus on education and skills development to
increase capacity
4
• deepen regional integration to pool resources and
World
create market power
3
2004 2005 2006 2007 2008F 2009F
Food security, geopolitical instability, economic shocks and In preparing this Africa@Risk
climate change all threaten Africa’s development, according report, more than 20
to the Africa@Risk report. Released on the occasion of the experts from
World Economic Forum on Africa, the report features the business, academia,
latest insights into trends, potential consequences and non-governmental
mitigation relevant to these four key risks facing Africa: organizations and
A Global Risk
civil society were Network Briefing
1. Food and Freshwater Security – How best can Africa cope asked to consider the
with increasing food and freshwater insecurity? What are drivers of the recent
the risks and opportunities for the region? period of
unprecedented
2. Geopolitical Instability – Can Africa sustain and consolidate growth in Africa and
progress on transparent and democratically accountable the opportunities that
governance? Can it increase its institutional capacity to exist, as well as the threats to Africa’s continuing progress.
prevent, manage and resolve both intrastate and interstate The report concludes that for Africa – a continent
conflict? characterized by huge opportunities and ever-increasing
regional and global interdependence – the imperative is for
3. Economic Shocks – Can African resource rich countries collective action to mitigate these shared risks.
reduce their commodity dependency by diversifying their
economies? How can wealth be better distributed? How
can African countries increase their trade benefits?
300
Rice Research in Africa: “We all believe that agriculture is
250 the battlefield for economic growth in Africa.”
Wheat
200
Maize (corn)
There is certainly reason to believe that if African
150
countries make the investments needed, agricultural
100 yields can increase. With food prices rising (see Figure
Soybeans
50
2), there may now be enormous incentive for finally
Jan-06 Jan-07 Jan-08
addressing deficiencies in the continent’s farming
* Priced in US$; US-inflation adjusted prices with April 2008 as base month
systems. “While between 70-80% of the population of
Source: IMF; US Bureau of Labor Statistics; PwC analysis
Africa is engaged in agriculture, an average of only 3-
4% of the continent’s national budgets is allocated to
Overall, Africa needs to assess where its global the sector,” said Namanga Ngongi, President of the
competitive edge lies. “There is a great potential of Alliance for a Green Revolution in Africa (AGRA) in
growth in areas where we have unbeatable Kenya. “Some countries have committed up to 10%
comparative advantage,” said Salim Ismail, Group of their budgets but they are few in number.”
Chairman and Chief Executive Officer of Groupe
Socota, Madagascar, in a session on trade. With a Steps have to be taken to help small farmers increase
global food crisis emerging, agriculture could be one output and subsistence farmers access markets. New
such sector. “How does Africa convert the food crisis financing models including subsidies and microfinance
schemes for small farmers are also needed, as well as “How does Africa convert the food
ways to bring them together to boost productivity
through collaboration. Rural development is critical.
crisis into an opportunity? Currently,
“What these people need is a way to make money,” yields in Africa are the lowest in the
said social entrepreneur Nick Moon, Co-Founder and world. We need a long-term approach.”
Managing Director of KickStart International in Kenya.
Kenya’s new leadership hailed their country’s revival following A commitment was made to create a “cobweb” of
last year’s violent general elections. Participants at a dinner telecommunications connectivity while another undertaking,
session, including the new Prime Minister, Raila Amolo to provide free secondary education, has been advanced by
Odinga, echoed the campaign slogan of US presidential the new unity government as part of “Vision 2030”, a wide-
candidate, Barack Obama, who is of Kenyan extraction, ranging development plan.
“Yes, we can.”
A roadmap to a new constitution in Kenya has been
Following the historic agreement between the two rival established, which Kenyan ministers said is likely to be in
political parties, the Party of National Unity and the Orange place by the end of the year. Electoral reform is also being
Democratic Movement, the panellists affirmed that “a new tackled.
Kenya has been born” and “Kenya is now moving forward.”
The issue of income disparity is being addressed partly
The establishment of a new ministry for the metropolitan area through the devolution of power. An Ethnic and Race
of Nairobi was discussed, aimed at the development of the Relations law has been passed to establish a permanent
city. A new ministry has also been established for the commission to address ethnic disputes, while a Truth and
northern province of Kenya, an area that has been neglected Reconciliation Commission had also been set up to address
historically but that the panellists affirmed has great potential, post-independence disputes.
particularly in mining and agriculture.
product delivery times are as much as three times Such challenges make it imperative that African
longer. Only 5% of Sub-Saharan Africans – and just countries focus on making the right decisions to
3% of South Africans – have access to broadband enhance competitiveness. Investing in skills
Internet; an African typically has to sacrifice up to 64% development and education is critical. “We must
of his average monthly salary to afford it. While harness the resources and skilled manpower and
tourism could be a valuable new driver of growth for involve our people more in development,” argued Raila
the region, limited transport links across the continent Amolo Odinga, the Prime Minister of Kenya. “That way
are a major impediment. we will be able to catch up with other parts of the
world.” Said Millard W. Arnold Jr, Executive Director of
The lack of infrastructure also hinders the continent’s South African construction group Murray & Roberts:
ability to diversify its economies. New growth will “Intellectual property and innovation allow Africa to
certainly be driven by higher value-added businesses compete internationally. We don’t necessarily need
and enterprises. There is no reason why Africa should abundant energy but rather need to figure out our
simply export cashews overseas and not handle the competitive advantage on the international market.”
processing of the nuts to gain more value. The
development of organic prawn farming in Madagascar, Finally, for Africa to develop new drivers of growth, the
coffee packaging in Ethiopia and diamond cutting and continent must deepen integration. As many
polishing in Botswana illustrate what can be done if participants pointed out, the small size of several of
the skills are available and the right investments are the continent’s economies makes them unattractive to
made. In one session, Baledzi Gaolathe, Botswana’s investors. Regional integration and the creation of an
Minister of Finance and Development Planning, authentic continental single market would be a major
proposed that Africa’s cattle industry could diversify boost to Africa’s competitiveness. Concluded
into by-products such as hides and leather goods. President Kufuor of Ghana: “Africa needs more
But, he warned, even if Africa develops new value- cooperation through the African Union to organize and
added products, they might not be competitive in the coordinate how Africa relates with the rest of the
global market, given tariffs and other trade barriers in world.”
the developed markets, as well as logistics and
supply-chain costs.
investment and entrepreneurship, typically driven by Nigeria and Malawi have high rates of private-sector health services provision
Zimbabwe
play in generating wealth downstream in the Ethiopia
communities in which it operates. “Business is good Angola
Kenya
Executive of one of Africa’s most successful
Tanzania
companies, Sasol. Zambia
Namibia
At the 2008 World Economic Forum on Africa, leaders of sector partnerships to increase food security. BAACH
global and regional business, government, civil society and partners also took part in plenary and panel discussions to
international organizations met to define concrete business highlight priorities for action to improve African food security.
strategies to help address Africa’s growing food crisis.
BAACH was founded in 2006 by the Forum’s Consumer
Convened by the Industries community with the support of Kofi Annan to
World Economic develop business-led solutions to hunger. The Alliance is now
Forum’s Business a vibrant cross-industry network of globally-leading
Alliance Against companies and partner institutions which is breaking new
Chronic Hunger ground in defining and catalysing action on business
(BAACH), strategies to increase sustainable food production,
corporate leaders particularly in Africa.
from multiple
industries defined At the global level, the Alliance engages a wide scope of
strategies for leaders to build partnership and collaboration for improved
scaling up food security. At the local level, BAACH established a Kenya
business-led Alliance led by 20 companies and organizations that are
solutions for food working in a pilot district to develop and test business-led
production and approaches to improving food production and incomes. This
entrepreneurship year, Kenya Alliance partners are undertaking 14 pilot
in hungry regions. projects in the district.
William V. Hickey, President and Chief Executive They presented
Officer, Sealed Air, USA, and David Mureithi,
Managing Director, Unilever East and Southern
these strategies to In 2008, the Alliance has partnered with the Bill and Melinda
Africa, Kenya heads of state Gates Foundation to conduct a global assessment of
and government scalable business models that contribute to sustainable food
as well as to other high-level public leaders, and discussed production, engaging a wide range of industries and
priorities for public-private collaboration to maximize private- stakeholders.
More and more governments are setting up the A growing area of attention for the private sector in
frameworks for such partnerships, while the private Africa is finding innovative ways to tap the spending
sector is proving a ready partner if the benefits are and investing power at the bottom of the economic
well defined. Such partnerships provide a vehicle for pyramid. This requires a new way of looking at
business and governments to address the consumers. Said Nick Moon of KickStart International:
impediments to growth and investment resulting from “We need to approach people as untapped investors,
unsupportive policies that constrain growth and not just as untapped consumers.”
reduce the ability of the private sector to unlock it.
Closer attention, for example, needs to be paid to
consumer spending habits. The assumption that low-
income consumers make purchases based solely on
price is overstated and other issues such as relevance
to people’s lives, long-term investment and prestige
value are also driving factors. Large companies can
spur growth by creating linkages with and investment
in small and medium-sized enterprises, thereby
developing the capacity of businesses to participate
more profitably in the supply chain.
The agriculture sector could also turn out to be a Banks generally consider small farmers to be high risk.
timely opportunity with enormous potential. The This is exacerbated by the fact that most land in Africa
private sector has the ability, with the right incentives, is owned by the state and thus does not qualify as
to enable Africa to make a quantum leap in food collateral for bank loans. Given African governments’
production. Such a leap would both eradicate hunger resistance to private land ownership, banks need to
locally and capitalize on opportunities presented by consider innovative ways to unlock private funding for
the current world food crisis. Public-sector funding of agriculture based on unconventional collateral options
agriculture, however, remains low and despite pockets such as warehouse receipts for stored food and a
of commercial agriculture, African farmers have not track record of output. More creative use needs to be
moved much beyond subsistence farming. made of land leases and property titles to realize
value. Babatunde Raji Fashola, Governor of Nigeria’s
Still, there has been progress in private-sector populous Lagos State, said his government
initiatives such as the use of small-scale farmers understands that there is wealth to be unleashed at
contracted by large commercial enterprises in cotton the bottom of the economic pyramid by making use of
and tobacco and in the production of fresh produce idle land. It was looking at ways to unlock this
for large supermarket chains. The development of potential by formalizing home ownership and property
agriculture needs to be supported by two areas that title regulations.
are still problematic in African countries – finance for
small farmers and land tenure.
Climate change is another possible business Technology is a key area of private-sector intervention
opportunity. The continent faces losses estimated at in development, given its potential to drive education
between 1.9% and 2.7% of GDP unless new and growth. But for it to spur growth, African
strategies are found not only to mitigate the effects of governments have to look at how they can help to
it but also to adapt to it in the long term. Companies bring down the cost of providing it. If the costs of
stand ready to work with governments but the latter access are lowered, there will be significant spin-off
need to create aligned policy frameworks to make effects in key areas such as education, healthcare and
ventures viable. small business.
Water management is yet another area where Another challenge for business and government is to
business is becoming involved. As increasing scarcity harness the massive inward investment from the
pushes the price of water up, there is a good African diaspora, which in 2007 significantly
business case to be made for the better use of water. surpassed development assistance inflows. A great
Meeting Co-Chair E. Neville Isdell, Chairman and Chief deal of the money goes into consumer spending. The
Executive Officer of The Coca Cola Company, said his main hope is that the development of strong, private
company has pushed for the introduction of water sector-driven economies will draw back not just
efficiencies through the supply chain. For example money from the diaspora into productive investment
sugar producers have been asked to find way to but also badly needed skills.
reduce water in the growing process. “Water is the
new oil,” he said.
Number of African multinationals on the Forbes Global 2000 list has grown,
Business confidence has fallen to its lowest level since 2001
but not as quickly as companies from India and China
75 100
Number of companies in the Forbes Global 2000*
90
South Africa Business Confidence Index
80
70
50
60
50
40
25
Morocco 30
Egypt
20
South South
Africa Africa 10
2004 2007
0 0
Africa India China Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07
Source: Forbes magazine Source: Rand National Bank/Bureau for Economic Research
“You can have many mineral resources, “In many countries you can track
but if you have no peace, there is no growth directly to broadband.”
way to develop your country.”
Ajai Chowdhry, Chairman and Chief Executive Officer, HCL
Pierre Nkurunziza, President of Burundi Infosystems, India
African countries have made progress towards issue, rather than a sector-specific problem. This
tackling the significant problems that continue to simple mindset change has allowed the problem to
impede the continent’s development but the scale of move out of the ambit of health officials and into a
the challenges requires innovative solutions to really much wider engagement across many disciplines.
move the continent forward. Such solutions require
breaking the mould of traditional applications and
models and finding new ways of doing things to fast- Figure 1: Water Consumption, by Use
track development in ways that are also sustainable Sub-Saharan Africa's agricultural sector uses a lower proportion
of water than other regions, because of less irrigation
over the long term. 100%
Domestic
Percentage of water consumed, by use
sustainable supply across the continent. It is intervention in the economy are a constraint to
estimated that nearly one in two people in Africa will innovation in food production as is the lack of official
live in water stressed areas within 25 years, a region spending in agriculture required to attract investment
that already uses a lower proportion of water for and move production beyond subsistence levels. An
agriculture than the rest of the world (see Figure 1). average of only 3-4% of most countries’ national
Thus water insecurity risks need to be mitigated now budgets is allocated to the sector.
in a manner that is beneficial to all stakeholders.
Technology is an important component of the
New models of usage, management and pricing are innovation that is required to push development. The
required as well as stronger linkages across sectors. very lack of development in most of Africa has allowed
Regional cooperation must play a greater role in future new technologies to be applied rapidly and effectively.
planning. About 60% of water sources in Africa are Mobile telephony is a case in point. Yet over-regulation
shared, making the continental dimension critical. But in many countries is constraining the use of
is there sufficient political will to move forward? “While technology, making it expensive for the private sector
politically the continent talks about the need for – and governments – to deliver. The high cost of
regional solutions, the important steps that need to broadband access in African countries as a result of
make it happen are not happening,” the World Bank’s unsupportive policies has resulted in very low
Obiageli Katryn Ezekwesili, warned. “Governments talk penetration rates, severely limiting the development
regional when they act national.” benefits to be gained from building a critical mass of
IT use.
Innovative thinking is required to ensure the
sustainability of water and other resources, particularly The actions of governments in this regard flies in the
among poor communities that must be given face of success stories in other parts of the world
responsibility for the management and sustainability of where technology has been key to economic growth.
supply. In agriculture, for example, crops need to be Apart from more obvious applications such as health
adapted to make them more resistant to threats and education, cheap Internet access is a tool for the
posed by climate and disease. More sophisticated growth of micro and small enterprises, which unlock
farming methods are required to increase food supply. value in poorer communities and in rural areas.
Governments need to release more spectrum and
But political will to exploit the situation is also needed make it available in big enough chunks to make it cost
here. High costs of doing business due to government effective. Ajai Chowdhry, Chairman and Chief
Executive Officer of HCL Infosystems in India, said the creative financing schemes for more traditional energy
supply of broadband should be a national priority, provision, have to be developed to address the
given its importance as a driver of growth in countries problem at the scale that is required.
such as Brazil and South Korea. “In many countries
you can track growth directly to broadband,” he said. Crucially, energy savings will also need to come from
modifications to individuals’ behaviour in energy use
and in preventive methods such as improved energy
Figure 2: Carbon Markets Take Off efficiency standards in new buildings and appliances,
European Emissions Trading Scheme went into effect in 2005
backed by legislation. Ideas from the youth, who will
700 be the main entrepreneurs and energy users in the
Annual volume of project-based transactions* (MtCo2e)
In the session “Taking Control of Global Partnerships,” “Africa needs a consensus on how it
moderator Siki Mgabadeli, Senior Business News
Anchor at CNBC Africa, asked whether the title
wants to deal with emerging partners
reflects reality. Is Africa really in control of its and traditional powers.”
partnerships? The immediate answer from Al Sayed
Mohd Sharaf, Chief Executive Officer of DP World in He Wenping, Research Fellow and Director, African Studies,
the United Arab Emirates, was a simple “not yet.” Chinese Academy of Social Sciences (CASS), People's Republic
of China
80
Japan
The private sector seems poised to play a growing
Middle East**
China (incl. HK)
role to help Africa become more competitive and forge
60
US
international alliances that extend beyond the
40 customary handouts that have long characterized the
EU12*
region’s relationship with rich countries. “We have a
20
unique combination of developed world business skills
0 and having learned how to do business in emerging
1990 2005
* EU12 consists of Benelux countries, Denmark, France, Germany, Greece, Ireland, Italy, Portugal, Spain and UK
markets,” said Sasol’s Pat Davies. “This needs to be
** Middle East includes Libya and Egypt
emphasized more, and we can lead the way.” Tony
Source: IMF Direction of Trade Statistics
Elumelu, Chief Executive Officer of United Bank for
Africa in Nigeria, added: “We need to realize that
While it might have seemed glib, Sharaf’s response nobody is going to develop Africa except us. To fix
echoed the consensus in the meeting that Africa is Africa we need partnerships. I would like to call on
ready for a more prominent part on the world stage. African businesses to build the readiness needed to
“Africa must be stronger to be a better trading partner compete in the world. Externally people will realize
for the North,” said Bingu Wa Mutharika, President of that Africa is a good destination for investment and we
Malawi (its trade with partners beyond Europe is need to be prepared.”
growing - see Figure 1). “A partner who walks hand-
5.0
2007* (US$, billions)
2.5
Africa overall
-5.0
through customs at his country’s border with
Angola
Egypt
Morocco
Mozambique
Algeria
Nigeria
Libya
Sudan
Kenya
South Africa
Senegal
heard. If that happens, I foresee a considerable Finally, the meeting included a healthy warning about
increase in production.” not reducing the term “partnership” into a buzzword
designed to avoid responsibility and divert blame. “A
The private sector is already working with small lot of people talk about partnerships because they
farmers to move in this direction and can do more in want to duck tough decisions,” cautioned a panellist
partnership with governments, multilateral agencies in one session. “All too often it means ‘We’ll make the
and civil society organizations, said Gareth M. decisions and you come and pay the bill’.”
Ackerman, Chairman of Pick ‘n Pay Holdings, South
Africa, and Aliko Dangote, President and Chief
Executive Officer of Dangote Group, Nigeria, a Co-
Chair of this year’s World Economic Forum on Africa.
Ackerman recommended more partnerships between
large and small retailers to help “shorten supply lines”.
Dangote described efforts by his company to provide
loans, supply fertilizer and build silos for small farmers.
“I suggest that we give them loans,” he said. “If not,
they will not survive.”
May 2008
May 2008
South Africa is facing an emerging threat of TB/HIV co- economic impact of TB, which results today in a decline in
infections and fatal drug-resistant strains of the disease. With worker productivity estimated at US$ 13 billion annually.
a staggering 70% of TB patients in South Africa infected with
HIV, the importance of an integrated approach to care is On a practical level, the toolkit will help companies leverage
clear. opportunities and increase activities in the prevention and
management of TB/HIV in the workplace. These measures
The Global Health Initiative of the World Economic Forum will in turn help alleviate the burden and costs associated
and the Lilly MDR-TB Partnership launched a new toolkit that with absenteeism, disrupted workflow and reduced
aims to boost the involvement of South African companies in productivity. By engaging proactively with the community,
tackling the TB/HIV crisis, providing these companies the which forms a key component of the overall business
opportunity to catalyse effective public-private partnerships environment, businesses can offset the marginal cost of
to facilitate successful patient and programme management. partnering with local stakeholders with the huge benefits they
will reap through greater efficiency in the workplace and the
Combined with the technical expertise and knowledge good will in the community.
available under the Department of Health in South Africa,
companies can provide a critical mass of resources for the
successful integration, management and care of TB and
TB/HIV co-infections. This could eventually lessen the
“There is a lot of talk about That assessment set the tone for the meeting. Indeed
no term was repeated more frequently in Cape Town
accountability to the people. And, yes, than “leadership”. Even some of the leaders
there is still a lot to do. But there has themselves got into the act. According to Prime
also been a huge amount of progress.” Minister Odinga of Kenya: “What we see is a
continental problem – the problem of bad governance.
We always blame colonialism. But the mediocrity with
Mike Hart, Chief Executive Officer, Africa Region, Standard which Africa has been ruled has been responsible.”
Chartered Bank, United Arab Emirates He called on leaders to speak plainly and openly
about the continent’s shortcomings: “Let us say what
we mean and mean what we say when we talk about
African development.”
“There clearly is a crisis of leadership not just in Africa
but in the world,” said Wendy Luhabe, Chairperson of Leadership is one of those slippery terms that are
the Industrial Development Corporation of South hard to define but easy to identify. Nelson Mandela
Africa, and a Co-Chair of the World Economic Forum had it; others clearly not. While no one attempted to
on Africa. Luhabe decried what she called “the define the term, a number of key elements in
conspiracy of silence among African leaders” that leadership development emerged from the
hinders efforts to “translate challenges into what we discussions: accountability, public institutions including
would consider to be unprecedented opportunities”. political parties, the civil service and youth.
At the same time, participants in the interactive The region has all-too-often experienced two of the
session “Africa Economic Brainstorming – Drivers of most extreme forms of lack of accountability:
Change” ranked “visionary and selfless leadership” corruption and an unwillingness of leaders to step
second only to “education and skills development” as down following electoral defeat. “Corruption is
key to economic progress in Africa over the next 12 everywhere [around the world],” said Jendayi E.
months (see page 5). Frazer, US Assistant Secretary of State, Bureau of
African Affairs. “The issue is to establish the rule of law Institutions, including political parties, can sometimes
so that those corrupt individuals can be held determine the effectiveness of leadership for an entire
accountable.” President Mbeki of South Africa nation. For instance, in democratic countries where a
discussed the succession issue. “Practices include the popular political party holds a de facto stranglehold on
possibility of defeat in elections and that you leave power, a ruling party crisis can evolve into a national
power if you lose,” he said. “I think everyone one. The debate in one session hinged on whether a
understands what needs to happen.” certain African country with a strong ruling party had
two centres of power or none. Either way, participants
Accountability was also discussed in terms of seemed to agree that the effect of the party’s crisis on
personal traits. Leadership depends crucially on public governance has been detrimental.
integrity, said Jonathan B. Majiyagbe, Chair of the
Rotary Foundation Trustees at Rotary International, Leadership is needed not only at the top but also in
USA. He noted that this is of great importance when the middle levels of public administration. In one
people tend to tell their leaders only what they want to session, panellists tried to explain why talented young
hear. people fail to go into public service. One reason is that
they see little link between the efforts civil servants
make and the results of their agency or department,
The World Economic Forum wishes to recognize the support of the following companies as Partners or
Supporters of the World Economic Forum on Africa:
Strategic Partners
ABB
AMD
ArcelorMittal
Audi
CA
Cisco
Citi
Dubai World
EDF
Ernst & Young
Goldman Sachs
HP
HSBC
Intel Corporation
JPMorgan Chase
Merck & Co.
Merrill Lynch
Microsoft Corporation
Nike
Standard Chartered
Unilever
Regional Partners
Absa Capital
Eskom Holdings
Meeting Supporters
Service Providers
Telkom
Transnet
The World Economic Forum also thanks CNBC Africa as host broadcaster, and City Year for its support.
Børge Brende is Managing Director, Regional Agenda Teams, at the World Economic Forum.
Adeyemi Babington-Ashaye is Associate Director, Acting Head of Africa at the World Economic
Forum. The World Economic Forum on Africa was under his direct responsibility, with Stéphane
Oertel, Community Manager, Africa, responsible for Programme Development; Sophie
Bussmann-Kemdjo, Community Relations Manager, Africa; Alex van Praag, Community
Relations Manager, Africa; and Nadine Bonard, Associate Director, Events, the meeting
Coordinator.
Samantha Tonkin, Senior Media Manager at the world Economic Forum, worked with Alejandro
Reyes, Dianna Games and William Hinchberger to produce this report.
The World Economic Forum would like to express its appreciation to the summary writers for
their work at the World Economic Forum on Africa. Session summaries are available on our
website at: www.weforum.org/africa2008/summaries
Design and Layout: Kamal Kimaoui, Associate Principal, Production and Design
The World Economic Forum would like to recognize the support of PricewaterhouseCoopers in
compiling data and statistics for this report.
The electronic version of this report allows access to a richer level of content from the meeting, including
photographs and session summaries.
Other specific information on the World Economic Forum on Africa in Cape Town, South Africa, on 4-6 June
2008, can be found at the following links:
www.weforum.org/africa2008
www.weforum.org/africa2008/interviews
www.weforum.org/africa2008/programme
www.weforum.org/africa2008/partners
www.weforum.org/africa2008/summaries
www.weforum.org/africa2008/regionalupdate
www.weforum.org/africa2008/private
www.weforum.org/africaprivate/knowledgeconcierge2008
www.weforum.org/africa2008/webcasts
www.pbase.com/forumweb/africa08
www.twitter.com/davos