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I'm your host, Alyssa McArthur. Today we're pleased to bring you the first in a two part series on the challenges and opportunities facing Africa.
As governments across the continent consider a landmark free trade agreement that combined their economies closer together.
Some see the Africa Continental Free Trade Agreement as an opportunity to spur growth and innovation,
as well as critical investments in energy and infrastructure.
But critics worry the deal could hold some countries back as it lifts others up.
And Nigeria's government has so far refused to back the deal,
which President Muhammadu Buhari says could make his country a dumping ground for finished goods.
Recently, experts from across Africa came together at Oxford, Said Business School, to discuss the agreement and the future of Africa there.
We caught up with Dr. Vera Sunway, the Executive Secretary for the UN Economic Commission for Africa and the principal architect of the agreement.
Dr. Some way. It's a pleasure to have you on the podcast.
I think we could just maybe start with like a broad question. What is your vision for Africa?
A vision for Africa is a simple one, is that we need to create a prosperous Africa and Africa where women are empowered.
In Africa, where there are no gender gaps. In Africa, where kids go to school, in Africa that is prosperous, in Africa,
that this stands on equal footing with the rest of its peers and all the continents.
And in Africa that becomes productive and continues to be innovative and vibrant and was
the key ways in which the CAFTA could benefit Africa at a continental level and globally.
First of all, it would create jobs. And I think that this is we need 60 million jobs a year on the continent.
And the CAFTA will clearly create more jobs.
It will begin to create regional value chains. We see the numbers it can add to Africa's GDP, almost 55 billion.
It could add to Africa's exports of almost 60 billion.
So clearly, not only is it going to create jobs, it's going to create a platform for innovation.
It's going to create. I think the issue is when we talk about the continent, the innovative potential is so huge.
We just need to sort of allow for that platform that would unleash it.
And we believe that the CAFTA is that platform that will give us, you know,
the full potential of what the African youth, the African market, the African private sector can deliver.
And what do you think the role is of private corporations in driving forward this economic development in Africa?
Listen, the CAFTA is all about the private sector. It's all about saying, you know, how can you create jobs?
We know that the public sector does not create jobs.
And even if it did, it will not create nearly enough jobs to be able to absorb what we have today.
And so the private sector is the one that tells us where the markets are.
The private sector is the one that tells us what to regulate.
The private sector essentially is the sort of discover they're the ones who identify new market sectors.
They're the ones who can bring, you know, the global goods into the continent.
They're the ones who manufacture it. But they really are the fountain of innovation.
And they are today. When you look at the sort of research and development across the world, a lot of it is happening in the private sector.
So essentially, as we look at sort of what is the Africa of the future, we cannot define it.
We don't know what it is,
but we know that we cannot define it without having the private sector leading it and the public sector allowing for the regulation,
allowing for the institutions that can harmonise and ensure that there is equity as you go forward.
So do you think this it's essential to build public private partnerships in driving this change?
Public private partnerships are an important part, particularly when we talk about infrastructure today, including in the West.
A lot of the big infrastructure is still built with in public private partnerships because we have one to ensure and that is part
of the conversation that we're having today is we want to ensure that we leave no one behind if you only do the private sector,
justifiably so. They have to look at the bottom line and profit.
If you bring in the private, the public sector, then we start looking at inclusive,
sustainable growth and development or most of the big infrastructure.
Most of this of last mile health, most of the last mile education will still be built by the public sector.
But we know that there are models that can ensure that when you have what the public we just talked about energy,
you have both the public and the private sector. You can ensure that women in the rural areas do not continue to cook with,
you know, combustible fossil fuels, but can get access to renewable cooking.
Because the tariffs and the prices that you have at the urban areas with the private sector is something that then you can redistribute.
So obviously for the CAFTA to work, there has to be collaboration between all of the different countries.
How do you overcome the differences at national level to enable different countries to work together again?
CAFTA is something is you know, we are towards the maybe the middle of the road or the beginning of a new journey with the 50 year.
But this started 20 years ago. And in the last 20 years a lot has happened with the regional economic communities in West Africa.
A was in Southern Africa, SADC in East Africa.
These are community which is now together with SADC, created the COMESA.
A lot of work has already been happening and I think the CFT is really building on that.
But the advantage then is that we already have regional blocs, so we are not essentially trying to harmonise, you know, over 50 countries.
We are trying to now harmonise five or six regional blocs into one continental area.
So there has been a lot of work that has allowed for the CAFTA to be possible today with the speed at which it is going.
And I think that's and so finally, what we're going to try to do is work directly with the regional economic communities,
again, to ensure that the implementation of the CAFTA comes to be because they are the ones who have been over the last,
you know, two decades, making sure that we build slowly, you know, the rules of origins,
the dispute settlement systems, the trading systems in the Southern Africa region, for example.
They have really built, you know, financial systems that can speak to each other.
There is interpretability, there are common clearinghouses. And so we will learn from those as we build the broader system.
So there are a few nations like Nigeria who have yet to ratify the agreement.
What do you think of their reluctance? I think it's two things.
When you're doing a huge and transformational changes like the CAFTA, and we expect it to be transformational for the continent.
You need consultation. And Nigeria, of course, being one of the larger manufacturing services powerhouses on the continent,
you know, has a constituency, I think, that needs to be consulted, needs to, you know, provide its views.
And I think one of the reasons why Nigeria didn't sign has not yet ratified the process is because they wanted to do this consultations.
We are confident that Nigeria will finally do. We just think South Africa initially said we need to think about it.
They have finally ratified the same thing with Egypt that just ratified two or three days ago.
So the bigger countries said we need to go back and consult with our private sector.
We believe now post the political cycle in Nigeria that we will come back to the discussions and hopefully between now and July,
something Nigeria will be part of the community of nations that signed for CAFTA.
That was Dr. Vera, some way with her take on the Africa Continental Free Trade Agreement.
So how is the private sector reacting to the prospect of this new Pan-African trade area?
Kola Adesina is group managing director of the Sahara Group,
an international energy and infrastructure conglomerate with operations across Africa and beyond.
We recently asked him about his vision for Africa. The Africa of our dream is for us to be able to create, you know, employment for our people,
get Africa working in a manner that would be beneficial to the last mile of Africa.
Africa is deficient in infrastructure. Africa is deficient in power.
Africa is deficient in policies and priorities that can bring about the change we desire to see.
We believe we, as Sahara will be able to play a catalytic role in making Africa truly industrial base for the world.
We don't just want to see the Africa that will be set in natural resources to the world,
but Africa will be converted natural resources to finished products and consuming those
finished products using international best practices and knowledge based economy.
And how does Sahara plan to do that? By ensuring that we be we are involved in electricity supply as we speak today,
which is one of the critical components of the success factors needed to make Africa great.
We currently generate about 2000 megawatts of electricity in Nigeria, and we are expanding our foray into other parts of Africa,
Senegal, Cote d'Ivoire, South Sudan, Tanzania, Zambia, Uganda and the rest of that.
So we we plan to use electricity as a vehicle to creating greatness for Africa.
That's the first thing we need to do. The second thing is to be able to create the educational background required for that to happen,
because building infrastructure is not the and the whole.
I've been. It's just a beginning.
The derivative of that is primarily for us to be able to have people with the right skill sets and competencies to manage Africa.
Using business principles, the resources must be applied in the right places, in the right manner, for the right purpose for Africa.
And so do you think the Africa Continental Free Trade Agreement has the ability to help solve this infrastructure problem and in doing so,
help solve the energy crisis? Most certainly because if you have a shared mission and a shared value system, he helps the system to grow.
My view of Africa is a system. That if we see Africa as a system,
then it makes life easier for everybody and all the participants to contribute their quota to making the system function optimally.
The subsystem of Africa represents the different states, the state actors and the different nationalities within Africa.
The agenda must be the agenda of ensuring that.
All of us have the same vision, the same mindset behind that vision, and creating an implementation framework that makes the vision realisable.
If I see myself as a Nigerian first before.
An African. It would be difficult for me to cross that barrier quickly.
But if I see myself as an African and then a Nigerian, then I think I am likely to help the African dream and the African vision to become realisable.
And do do you think the people at the moment, do they see themselves as African or do they see themselves as belonging to their particular nation?
Do you think that mindset is changing over time? That mindset is changing, but then it requires still so much of action on behalf of the leaders.
And the precedents, particularly the political leadership of Africa, needs to start to see Africa as one.
It is the selfish agenda and desire for rulership.
Please underline that it's not leadership that as blinded most political leaders in seeing the big picture of Africa fusing together,
building a common market, a big market, 1.4 billion people, that's an enormous market for the world.
And shedding the toga of fear, of selfishness and the more peak concept that drives the current policies of Africa.
I think it's something that the political leadership needs to do.
Nelson Mandela played a critical role in leading Pan-Africanism quite significantly
because he suffered eventually became the president of South Africa.
And I know that a lot of Africans lined up behind him and saw him as a unifying force.
If we can recreate the Nelson Mandela factor in Africa,
where all of us can see ourselves as one with one agenda, it will help us a great deal to make Africa great.
That was Kola Adesina of Sahara Group. Next, we'll hear from serial entrepreneur Erik Hersman.
He started an innovation centre for the tech community in Kenya called Ihub.
He's also the founder and CEO of Brick, a Start-Up, that manufactures rugged Wi-Fi devices for the emerging markets.
We also asked Eric about the role that government can play inspiring innovation and whether
he thinks a free trade agreement will facilitate collaboration across national boundaries.
I certainly hope so. Yeah, I certainly hope so. The the idea of, you know, the fact that we have such a border problem,
like friction for businesses is so high where I can't even hire from certain other countries because
I would take some crazy amount to get them into the country and a work permit on top of that.
And they're coming from, you know, Zambia to Kenya. It doesn't make any sense to me.
So, you know, I think that plus the movement of goods and services is going to make a huge dent in the friction problem of doing business in Africa.
So and, you know, the more the technology we have today already allows us to have the collaboration digitally.
But there's something about being face to face and there's something about being able to trade goods,
services and have and move people that will really grease the wheels on a much
more rapid advancement in business and in my world of tech across Africa.
What do you think the role of government should be in facilitating innovation, and has it been happening so far?
So if you look across the continent, there's different countries that are trying to do different things to,
I guess, catalyse some innovation in in a different sector.
They're not generally doing enough. And, you know,
I think there are some really good models that you find in different countries
around the world that could be applied in different African countries as well.
That would either subsidise the cost of the initial Start-Up, you know, giving some tax breaks across a certain amount of time, you know,
giving some low cost debt so that people can can move faster without having to take on some, you know, premium costs on their equity.
You know, those are the kinds of things that I think the government can do.
But beyond that, I tend to be open to the and to the the camp of, you know, get out of the way more.
More than than most. I think that doesn't take into account when you're talking about government services, of course.
Right. Which ends up being a large part of the I.T. capital available in a country.
So there's actually a really I think it was a few years ago in Kenya, where over 50% of the IT spend in the country was government contracts.
Okay. There's some really amazing things that can be done there.
But I tend to I tend to stay towards the private sector and saying government for the most part, reduce the friction in the system.
I mean, it if they if they want to get catalytic, you know,
get get behind infrastructure issues so they can subsidise some of the cost on it or they can, you know, you know,
make it more accessible for for peering of services, different, you know,
different kind of big hairy problems that the big companies are dealing with, as well as little companies.
The government come in there, you know, create a flat a more flat playing field for everybody to.
John. That's an interesting place for them to play as well.
And I guess, you know, the free trade agreement, it will hopefully help in terms of different governments cooperating with each other,
because I think at the moment is quite you know, it's very different countries and they do things differently.
So, yeah, I mean, the value the value of bureaucracy is that it doesn't, you know, once it's set,
the the changing of the guard across multiple countries or even just in a single country shouldn't have as massive of an impact on it anymore.
That was entrepreneur Erik Hersman.
Thank you for joining us this week on the Future of Business podcast for part one of our two part series on the Future of Africa.
In our next episode, you'll hear more from our three distinguished guests on what they see as the key challenges and opportunities facing Africa.
If you have any thoughts on this episode, what we've done so far, please send us an email at SBS podcast at SBS Dorks dot AC dot UK.