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Economic integration in Africa is a strategy to increase the continent’s economic integration by creating a single market for goods and services. The African Continental Free Trade Area (AfCFTA) is a strategic framework that started trading in January 2021. African countries are working together to address common challenges and harness their shared strengths to realize the continent’s potential market of 1.2 billion people. The African Continental Free Trade Area (AfCFTA) is a strategic framework that creates a single market of goods and services for deeper economic integration on the African continent. To make this ambitious project a success, coordination will be needed at the local, national, regional and continental levels.
Supporting African multilateralism: Gradual implementation of the AfCFTA
🌍 Bringing Africa to the forefront of the International scene with consideration on the authentic development of the African communities in Africa and around the world. Bringing together 54 signatory states among the continent’s 55, the AfCFTA aims to create the world’s largest free trade zone, representing a market of 1.3 billion consumers. More in the following article:
A bilateral investment treaty (BIT) is an agreement concluded between two States which defines the broad terms and conditions under which private and companies invest in each others territories. The United States has concluded a number of BITs with various countries, including African countries. The stated basic aims of this BIT program includes the following key objectives:
to protect investment abroad especially in countries where investor rights are not already protected through existing agreements
to encourage the adoption of market-oriented domestic policies which treat private investments in an open, transparent and non-discriminatory way
to support the development of international law standars that are consisten with these objectives
The United States has concluded BITs with various African countries, inter alia with Rwanda, Mozambique, Republic of Congo, Congo DRC and Cameroon.
Trade and Investment Framework Agreements (TIFA)
Trade and Investment Framework Agreements (TIFA) provide strategic frameworks and principles for dialogue on trade and investment issues between the United States and the other parties to the TIFA. These agreements generally go beyond the BIT model. TIFAs have been concluded with a number of African partner countries, inter alia with Angola, Ghana, Liberia, Mauritius, Mozambique, Nigeria, Rwanda and South Africa, as well as various regional country groups, such as COMESA, EAC and WAEMU. Discussions and negotiations with the SACU group are ongoing.
When the Past Divisions are the Path to the Present Vision of Unity in Africa
The African Continental Free Trade Area (AfCFTA) is a preferential trade regime aiming to progressively dismantling tariffs on goods and services produced on the continent, or with raw materials from Africa. The intention behind this large-scale project is to promote the free circulation of goods and thus stimulate intra-continental trade.
African leaders on Wednesday, March 23, 2018, signed three major economic agreements during the extraordinary session of Heads of State and Government of the African Union (AU) in Kigali, creating a Continental Free Trade Area (Zlec), perceived as essential to Africa’s economic development, through increased intra-African trade.
Some 44 countries signed the agreement establishing the African Continental Free Trade Area, while 43 heads of state signed the Kigali declaration for the launch of Zlec, and 27 signed protocols relating to the free movement of people, right to residence, and right of establishment.
Zlec gave birth to the largest free trade area in the world since the World Trade Organization which was established in 1995. Nineteen presidents attended as a number of prime ministers and government officials also signed for their respective countries.
Heavyweights, such as Morocco, Egypt, Kenya, and yet very protectionist Algeria, have signed the agreement, which will enter into force within 180 days after being ratified by the signatory countries.
“Some countries have reservations and have not yet finalized their national consultations. But we will have another summit in Mauritania in July and we hope these countries will sign then,” said AU Commissioner for Trade and Industry, Albert Muchanga.
Eleven countries out of the fifty-four countries of the AU are still missing, including Nigeria, whose President Muhammadu Buhari had decided not to make the trip to Kigali, after one of the largest unions in the country, Nigeria Labor Congress (NLC), had expressed its fears on the negative effects of the Zlec for the national economy. This union had also asked to be more involved in the negotiations and Mr. Buhari had agreed to “give more time to consultations”. Nigeria was one of the first economies on the continent, which had nevertheless coordinated the negotiations with Egypt. Other countries that have not signed the agreement include South Africa, and Benin, countries seeking taxes, especially on products transiting through their ports or roads, including Eritrea, Burundi,
Zlec must allow the gradual elimination of customs duties between member countries, thus promoting trade within the continent and allowing African countries to emancipate themselves from an economic system that is too focused on the exploitation of raw materials. The AU estimates that the implementation of Zlec will increase the level of intra-African trade by nearly 60% by 2022. Currently, only 16% of African countries’ trade is with other countries on the continent.
If the 55 member countries of the AU sign the document, the Zlec will open access to a market of 1.2 billion people, for a cumulative GDP of more than 2,500 billion dollars. Its advocates believe it will help diversify African economies and industrialize the continent while providing a unique platform to negotiate better trade deals with the outside world. Zlec is one of the key projects highlighted by the AU in its Agenda 2063, a long-term development program that aims to facilitate the flow of goods and people on the continent. At its last summit, in January in Addis Ababa, the AU had thus announced the creation of a single and liberalized market for air transport, including 23 countries of the continent.
Under the theme: “Creating an African Market”, the initiative falls under the AU Agenda 2063 It is estimated that if all 55 AU Member States ratify it, the agreement will bring together 1.2 billion people with a combined gross domestic product (GDP) of over US$2 billion.
Cameroon is one of the countries committed to drive the development of a liberalized African market. On July 2, 2023, the Port Autonome de Kribi, Cameroon’s second largest port, welcomed its first cargo under the AfCFTA regime, from Tunisia. Cameroon had already launched a first wave of goods exports under this regime at the end of 2022.
The process of dismantling customs tariffs has begun in the country, in line with the outline adopted by the AfCFTA authorities: to ensure a smooth transition to market liberalization, customs tariffs will be gradually reduced to zero over 13 years. The first 10 years will concern 90% of the products identified by the authorities, and 7% of products over the remaining years. Certain “sensitive” products (3%) will be excluded from liberalization, in order to protect local industries from increased competition.
The picture displayed here above with the Africa Clock is the time and period of professional endeavors dating some years ago.
During that time, I organized in Oakland, California, the First International Conference on Africa and AGOA in the mid-1990s during the Clinton Presidential Administration.
The East Bay Center for International Trade Development was the Host of such an African Event attended by the top brass of African and African-American Communities.
I invited Dr. Babacar Ndiaye [Rahma wa Ghofrane fi Firdousse Naim Ameen], who is holding my right and left hands is Dr. Babacar Ndiaye, 5th president of the AfDB from 1985 to 1995, who is known for having transformed the Bank into a “Triple A” institution, a rating it still holds today. He supported the creation of many African institutions such as the African Export-Import Bank, Shelter Afrique, and the African Business Roundtable.
The picture with Dr. Babacar Ndiaye was taken at the Conference Room of the Claremont Hotel, Oakland, where the International Conference on Africa and AGOA took place. On my right hand is Dr. Faheem Executive Director of East Bay Small Business Development and East Bay Center for International Trade Development (EBSBC and EBCITD), Oakland and San Francisco Bay.
At the EBSBC and the EBCITD, I worked as a Senior Consultant and Business Consultant from 1993 to 2001 and from 2003 to 2007, respectively with the following Executive Director Selma Taylor, Fazale Sharif, and Dr. James Garrett.
Needs additional information or have inquiries on Africa and AGOA, please send an email to:
★ International Conference on African Growth and Opportunity Act (AGOA) Forum ★ By Said El Mansour Cherkaoui ★
In my presentation on AGOA in Africa, I emphasized the relation of North Saharan Countries which I analyzed as a regional bloc that extend from Morocco, Algeria, Tunisia and Senegal given the common historical ties and our common cultural background which Mauretania has been the direct link and the bridge between these Saharan Countries. My selection and choice of this region of North Sahara Africa also was my desire to celebrate the presence of Dr. Babacar Ndiaye who is of Senegalese Descent.
When I met with Dr. Babacar Ndiaye, I explained him the inclusion of Senegal in my presentation and he was eluded that I have understood such commonality between Senegal, Morocco and the rest of the countries of Northern Sahara.
I have also added that my acquaintances in France during my studies were all from Senegal and the Sahel region given our means and ways of living and eating that are common, including the preparation of the Couscous and the Rice. We could not agree more when it comes to our cultural tastes and our appetites for African flavored goodies and delicacies.
The AfDB pays tribute to late President Babacar Ndiaye
The African Development Bank (AfDB) will pay tribute to honor its former President, late Dr. Babacar Ndiaye, on Thursday 21 September 2017, from 10.30 am to 12.30 pm at the Bank’s Headquarters.
Under the aegis of Dr. Akinwumi Adesina, President of the AfDB, the tribute ceremony will gather high level guests including former Heads of State, former AfDB Presidents and Ambassadors among others.
Dr. Babacar Ndiaye, 5th president of the AfDB from 1985 to 1995, is known for having transformed the Bank into a “Triple A” institution, a rating it still holds today. He supported the creation of many African institutions such as the African Export-Import Bank, Shelter Afrique, the African Business Roundtable. He also played a prominent role in opening up the Bank to the private sector.
The tribute aims at celebrating the life and achievements of former AfDB President, Dr. Babacar Ndiaye who passed away on 13 July 2017.
Les Start-ups Africaines Assiste-t-elles à un Dégel des Investissements ?
Email: saidcherkaoui@triconsultingkyoto.com
Au cours des trois derniers mois, les start-ups africaines ont levé près de 600 millions de dollars (environ 537 millions d’euros) et ce troisième trimestre de 2024 marque un record pour l’année en cours.
Un signe et un montant qui s’apparentent à un début de reprise des levées de fonds dans le monde de la tech du continent. Supérieurs de 100 millions de dollars à ceux de la même période l’an dernier, ces chiffres confirment la correction du marché, après les envolées de 2021 et 2022. En tout, ce sont 44 start-ups qui ont levé des sommes égales ou supérieures à 1 million de dollars entre juillet et septembre.
2024, pas une année record. Si ces chiffres sont encourageants, car il montre un début de tendance haussière, ils ne permettront cependant pas de réaliser de progrès notables par rapport à l’année dernière :
Les levées de fonds de 2024 ne vont pas dépasser les 2,9 milliards de dollars de 2023.
Et, donc, de dépasser les très bons chiffres de 2022, qui avait vu les start-ups africaines parvenir à lever 4,6 milliards de dollars. « Pour la première fois depuis la mi-2022, les start-ups ont levé plus de fonds au cours des quatre derniers trimestres qu’au cours de la période précédente. Si la croissance est modeste, on peut espérer qu’elle constitue un premier signe avant-coureur de la croissance future de l’écosystème », précise à JA Max Cuvellier Giacomelli, co-fondateur de la plateforme Africa.
The Big Deal, qui suit les opérations de levées de fonds de potentielles futures licornes africaines.
For the last 3 years, we have written about reports stating fraud from the time when it was listed as an entity on the New Times Stock Exchange (NYSE). These among other things were considered false claims and presentations as well as manipulations of the amounts of deliveries, the amount of returns, and the amount of sales even encompassing, Jumia’s daily operations in the streets of the African cities crossed by the motorcycles of independent delivery staff that Jumia called “Consultants.” Jumia has not been able to quell this mismanagement at every level of its own internal and external organizational structure.
Jumia has also presented its identity as an African company which in reality turned out to be a German Baby Trying to look and behave as African. The departure of the top African Leaders and their replacement by European-based leaders had increased the dichotomy existing between the claims and the reality of the leadership as well as the role of Jumia within African communities.
Apparent efforts were made by the Jumia communication Department to bridge the gap by developing actions that were promoted as contributions to the local communities, including the distribution of masks during the Covid-19 and the recent agreement with Star Link to expand the outreach of the internet in rural areas [Jumia: Rural areas a critical segment within our addressable market (CNBC Africa – December 5, 2023)].
Such coverage is not philanthropic given that the next alternative strategy pursued by the new CEO is that one of the targets for the expansion of sales by Jumia. The unserviced rural areas are the next move, the next “El Dorado” and the substitute for the crowded competition existing in the African cities and urban areas. This is the new plan in Nigeria which is considered actually as the prime market for Jumia.
“According to the company, the goal of the cities’ activation is to expand the brand beyond Lagos and ensure it is perceived as a true Nigerian company. […] Read more in this corresponding article:
Case Study of “African” Startup: Jumia is Feedup with Africa Goat Soup Fou Fou Food Said El Mansour Cherkaoui Ph.D. December 30, 2023
Said Cherkaoui 24 – Jumia the Tree with No African Roots that Hides the Jungle of Startups in Africa For the last 3 years, we have written about reports stating fraud from the time when it was listed as an entity on the New Times Stock Exchange (NYSE). These among other things were considered false claims and presentations as … Continue reading
Africa Tech Destiny: Safari and Sahara Startups
Publications by Said El Mansour Cherkaoui on Startups
Global Fintech Funding and Rounds from Q1 2022 to Q2 2023
EMEA Fintech Funding takes the largest dive YoY in H1 2023, compared to other regions
Africa has over half a billion mobile money accounts and it is the largest and fastest-growing fintech segment on the continent
Egypt, Iran, and Saudi Arabia technically have the largest addressable market sizes for fintech across the MENA region
Enonchong says African e-commerce is a very difficult and expensive market to get into. While Western e-commerce rests on the assumption that the post office will deliver to all points, that is often not the case in Africa. “You have to build your distribution network.”
Other e-commerce operations have crashed and burned, including:
Jumia’s Nigerian rival Konga, which was taken over by Zinox Technologies in 2018 after firing 60% of its staff in 2017;
CFAO, the francophone Africa distributor, which suspended its online “Africashop”;
Naspers, which has twice withdrawn from the Kenyan market.
Related Vectors of African Startup
Continuously updated with new inputs and trends
For Better or Worse Emergent Technologies Changing Africa!
COVID-19 induced a global e-commerce boom, but Africa accounted for less than 3% of e-commerce activity.
In many ways, the case is clear. Nearshoring or onshoring can contribute to risk-resistant supply chains and lead to faster time-to-market, more effective planning cycles, and greater flexibility in response to disruption. Proximate sourcing can enable greater control and more frequent site visits, fewer cultural barriers, and better communication. Reductions in logistics costs and lead times can also bolster the balance sheet by freeing up working capital that is tied up in cash outlays to suppliers and inventory in transit.
Colliers International releases a new research report on the latest trends for the manufacturing industry in Asia, Europe and the Americas
Greater focus on automation and digital technology in manufacturing globally is helping to shift workforce needs from low-cost to highly-skilled. This trend is apparent across Europe, and globally, according to a report released by Colliers International. The report discusses multiple pressures which global manufacturing and supply chains are confronting.
“To remain competitive in a global context and future-proof their manufacturing sector, advanced economies are embracing the Fourth Industrial Revolution and pioneering new forms of smart manufacturing whereby production combines the “Internet of Things” and digital technology to increase productivity, efficiencies and flexibility. Germany for example pursues this objective through its “Industrie 4.0” programme”. Commented Tim Davies, Managing Director, Head of Industrial & Logistics Practise Group for Colliers EMEA.
While this is putting greater emphasis on the quality rather than the quantity of the workforce in advanced economies, low-cost manufacturers remain an important part of the global manufacturing jigsaw. They are seeing their operations shift into less advanced economies, where labour costs are low and supply is more plentiful.
Karel Stransky, Director, EMEA Corporate Solutions: “Europe ultimately needs additional workers to avoid significant labour shortages. EU states in the Organisation for Economic Cooperation and Development (OECD) are anticipating population declines of approximately 10% by 2050, while the EU dependency ratio is expected to double, a measure reflecting the pressure on the productive population. Rural areas will be the most affected due to the continuing urbanisation trend. This begs a question over the sustainability of local labour pools. Going forward, the countries that will emerge as manufacturing winners will be those who continue to create innovative technologies in the most cost-effective manner, combined with competitive, yet affordable, wages.”
CEE has been one of the main beneficiaries of new productive investment in Europe in the last few decades. This has been primarily focused on a group of so-called Tier 1 countries including the Czech Republic, Poland, Slovakia and Hungary. The Czech Republic has one of the highest stocks of manufacturing FDI (Foreign Direct Investment) per capita within CEE. This investment has put local labour markets under pressure.
The Czech unemployment rate has fallen from a post crisis peak of 7.3% in 2010 to 5.1% in 2015 and is expected to fall to just above 4% by the end of 2016, the lowest level in Europe. In Poland, another regional heavyweight, the unemployment rate is predicted to fall to an all-time low of 6.2% by the end of the year.
Meanwhile, gross average manufacturing wages have increased by nearly 50% in the Czech Republic, 57% in Slovakia, 68% in Poland and 73% in Hungary in the space of less than 10 years (2005 to 2014).
These cyclical and structural forces are slowly redrawing the manufacturing landscape across the CEE region as we know it, and are prompting some corporates to consider alternative territories to established manufacturing hot spots.
Rising labour costs and labour shortages in global manufacturing hot spots are redefining the map of global manufacturing, driving growth into the next group of low cost countries such as South Eastern Europe, Turkey and Morocco.
Labour costs are far from being the only determining factor for locating a site or plant or in product-sourcing decisions. The need to improve speed to market and the growing demand for customised product means proximity to final consumers is increasingly important. As a result, regions/countries close to major consumer blocks that offer a good balance between cost/risk are those best placed to benefit from this trend. These include the previously mentioned countries plus South East Asia and Mexico.
In line with Industry 4.0, Western European supply chains are set to become increasingly automated, with robot-operated factories the norm. Port operator APM Terminals, for example, recently announced the opening of the world’s first fully-automated container in Rotterdam Port. Amazon has cut its operating expenses by about 20% by using its Kiva robots, and plans to roll out this technology more extensively across Europe and Asia.
Automation and technology may also enable the return of some traditionally labour intensive productions, from farther afield, as they seek to maximize speed to market. While this will generate new real estate requirements, the overall impact on job markets is likely to be more muted and unevenly felt across skills/qualifications levels, with the low-skilled workforce set to be most impacted.
In CEE, tier 1 markets like Poland and the Czech Republic have become more expensive and increasingly saturated in their primary manufacturing locations. This is likely to pave the way to greater manufacturing investment, particularly by cost-sensitive industries, into “off-the beaten track” regions within these countries or deeper into South Eastern Europe and the Balkans region. Labour cost will be a key driver, with current infrastructure development across the region helping de-risk investment. EU enlargement on other hand seems to have lost momentum but remains important in the mid-long term.
Mediterranean countries like Turkey and Morocco are likely to capture some investment thanks to their large, young and educated workforce and their location at the crossroads of Europe and other emerging regions like Africa and the Middle East. Turkey in particular is the Western’ terminal of China’s Silk Road initiative, aimed at strengthening trade between the Far East and Europe and support China’s outward investment.
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Entrepreneurs, small and mid-sized firms, minority and women-owned companies Insights on International Trade and Business Operations YOU ARE PREPARING YOUR FUTURE EXPORT ACTIVITY TRI CK USA will help you select your target countries TRI CK USA will define and conduct a diagnosis to validate your export potential. TRI CK USA will help you develop your … Continue readingWE DELIVER @ TRI CK USA
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TotalEnergies has announced plans to invest up to $6 billion in Nigeria, the largest oil producer in Africa.
In December 2023, French TotalEnergies announced plans to invest $6bn (€5.47bn) over multiple years in gas production and deep-water projects. This investment will boost its oil and gas operations in Nigeria and is aligned with the trend among international oil companies (IOCs) that are shifting their focus from onshore to offshore operations in Nigeria.
However, there have been challenges in retaining the oil major’s interest in offshore assets in Nigeria, which have been susceptible to insecurity and vandalism. Nigeria’s oil and gas infrastructure, including pipelines, has faced issues related to insecurity and maintenance. Mele Kyari, the group managing director of NNPC Limited, mentioned to senators in November 2023 that over 5,000 kilometers of pipelines in Nigeria are not operational. For example, the pipeline from Warri to Benin has been inactive for the past 22 years.
Equinor, the Norwegian state-owned international energy company, recently sold its stake in the Chevron-operated Agbami field, which is one of Nigeria’s largest deep-water oilfields. The buyer was Chappal Energies, a local rival, and this transaction reflects the broader trend of international oil companies (IOCs), such as ExxonMobil and Shell, either exiting or planning to exit certain operations in Nigeria.
Nigeria has seen a continual drop to a multi-decade low of below 1 million barrels per day in 2022 due to challenges such as oil theft, vandalism, and aging infrastructure. Nigeria is actively working to overcome these obstacles and boost production levels. All these conditions have resulted in the loss of revenues at a time when international demand such as the European need to find substitute suppliers for Russian oil and gas and China and India’s increased reliance on fossil energy.
Nigeria plays a significant role in TotalEnergies’ global output, contributing 8 to 10 percent of the company’s total production. Additionally, Nigeria accounts for more than 18 percent of TotalEnergies’ overall investments.
This is a Consulting Based Advice and Managerial Counseling and it is not legal advice. If you need to consult a lawyer, we help you find the expert on these questions.
National Petroleum Policy (NPP)Approved in 2017, this policy aims to use hydrocarbons as a fuel for national economic growth.
Nigerian National Gas Policy Approved in 2017, this policy provides a framework for developing and using natural gas.
Petroleum Industry Act (PIA)Signed in 2021, this act aims to create an environment that is conducive to the growth of the oil and gas sector.
Petroleum Industry Act 2021This act aims to address the grievances of communities and create an environment that is conducive to the growth of the sector.
Other goals of Nigeria’s oil and gas policy include:
Making the economy entirely gas-powered by 2030
Recovering 50% of methane recovered from landfills by 2030
Reducing open burning of waste by 50% by 2030
Reducing 30% of emission intensity in the agricultural sector by 2030
Converting 25% of all buses to natural gas by 2030
Phasing out 80% of HFCs by 2045
The Department of Petroleum Resources (DPR) is responsible for monitoring the petroleum industry and supervising all petroleum industry operations.
Updated on 7/29/2024 – 3:43 PM Nigeria is blessed with abundant natural resources, especially crude oil. It is at times the largest oil producer in Africa and one of the top ten in the world. However, the country’s refining capacity has consistently been inadequate to meet the demands of its population and growing economy. Nigeria’s … Continue reading
– Said El Mansour Cherkaoui, Ph.D. Posted on – Currently, the war in Ukraine and the sanctions imposed by the United States and the European Commission have led to renewed interest in supplying European countries with alternative energy sources such as the Nigeria – Europe Gas Pipeline. This “opportunistic” revival is currently kept in turmoil by the continuing stalemate in the Russian-Ukrainian conflict following … Continue reading
“Germany and Africa: New Clean Energetic Relation” – Said El Mansour Cherkaoui, Ph.D. Posted on saidcherkaoui@triconsultingkyoto.com German Chancellor Olaf Scholz the New Teutonic African pledges €4 billion in #Africa’s green energy On November 20, 2023, Chancellor Scholz after meeting African leaders and heads of international organizations during the G20 conference, said the conference with African leaders was “the starting signal for stronger, reliable cooperation between Africa and Europe to realize … Continue reading
Supporting African multilateralism: Gradual implementation of the AfCFTA
An ambitious initiative offering opportunities for worldwide businesses
Bringing together 54 signatory states among the continent’s 55, the AfCFTA aims to create the world’s largest free trade zone, representing a market of 1.3 billion consumers.
✈️ African Continental Free Trade Area
The African Continental Free Trade Area (AfCFTA) is expected to transform African economies and lead to an increase in intraregional trade and inward investment. There is much progress in negotiations but the ultimate benefits depend on the way AfCFTA commitments are implemented. National AfCFTA Implementation Committees (NICs) can help in this endeavor.
The year 2023 is the African Union (AU) Year of Acceleration of AfCFTA Implementation. In line with the Decision of the 31st Ordinary Session of the Assembly of Heads of State and Government of the African Union (the AU Assembly), held on 1–2 July 2018 in Nouakchott, Mauritania, Member States are required to set up NICs to facilitate implementation of the AfCFTA Agreement.
The primary objective is to boost intra-African trade. “Intra-African trade currently represents only 15% of the continent’s total trade, compared with 58% in Asia and 67% in Europe” (source: UN). The World Bank estimates that the implementation of the AfCFTA will boost intra-African trade volumes by 52.3% by 2025, as well as revenues for Africa and the rest of the world.
Said El Mansour Cherkaoui November 14, 2023 – Economic integration involves agreements between countries that usually include the elimination of trade barriers and… Read More
Said El Mansour Cherkaoui August 26, 2023 – At the time of the writing of this document, Her Excellency Dr. Monique Nsanzabaganwa was… Read More
First, AfCFTA implementation structures will need to be designed in ways that align well with existing trade negotiations and implementation structures. Second, the AfCFTA is not only a Free Trade Agreement but also a trade strategy involving a range of complementary instruments that address implementation, monitoring, payment systems, adjustment, and industrial policy.
This has led to much interest in Member States in what effective NICs look like and what they do. The role of the AfCFTA Secretariat in supporting the formation and operation of NICs is paramount. Two features associated with the AfCFTA project are important for implementation.
This briefing, aimed at the AfCFTA community concerned with implementing the AfCFTA, identifies appropriate institutional forms for NICs as well as 10 core functions that effective implementation agencies will carry out. It also outlines a potential five-step AfCFTA template for effective NIC formation and operation.
From negotiations to implementation: Building Effective AfCFTA National Implementation Committees
The African Union’s observations on the AfCFTA augur well for sectoral opportunities for businesses worldwide. Indeed, the institution behind the AfCFTA has made a number of recommendations to ensure that the initiative is properly implemented and achieves its stated projections.
According to the African Union, massive investment will be required in many sectors of African economies. The first and foremost need announced is for investment in improving the continent’s infrastructure. This financing requirement has been identified at between 130 and 170 billion dollars per year (source: AU), and the African Union is calling on governments to give priority to partnerships with the private sector and the transfer of technology on a global scale to modernize infrastructures.
On a sectoral level, opportunities have been identified in manufacturing, a sector that still contributes too little to Africa’s GDP, but whose growth forecasts have tripled following the implementation of the AfCFTA. The African Union particularly insisted on the priority of developing certain sectoral industries such as agro-processing, pharmaceutical manufacturing, green technologies, and mineral processing.
Said El Mansour Cherkaoui August 9, 2023 – African leaders have suddenly become believers in the benefits of international trade liberalism which have… Read More
Said El Mansour Cherkaoui October 15, 2021 – Moroccan Minister of African Integration Said El Mansour Cherkaoui – October 15. 2021 Africa: Moroccan Diplomacy… Read More
Finally, particular attention is to pay to digital trade and all the technologies that are revolutionizing the way we do business today. Fintech solutions, mobile money and other digital tools for commerce are developing rapidly on the continent and require further investment and innovation.
Economic Integration and Eco-Financial Digitalization of Africa
Startups in Morocco and in many African countries still face a few challenges. The major one is the lack of a pipeline of talented engineers and business course-related graduates. Startups have been forced to settle for less impressive talent because they can not compete with the pull of more established traditional companies.
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In 2021, the combined GDP of the 54 African countries was less than 15% of the GDP of the United States. The continent is made up of many relatively small countries, economies and markets, which is a disadvantage on the global stage, where countries with huge populations and GDPs wield the most influence.
Deeper economic integration in Africa paves the way for shared prosperity and greater global influence. Regional integration, similar to that of the European Union, has been cited as a key element in creating stability, fostering the growth of economies, improving market efficiency, sharing the costs of major infrastructure projects and ensuring peace and safety. And as the world becomes more digital every day, digital integration is essential for successful regional integration.
In this context, “digital integration” refers to the creation of shared systems and standard rules for digitalization across Africa. This involves digital cooperation, particularly in the areas of finance, governance and security. In practice, digital integration will include concepts such as a harmonized digital financial system, consistent laws across the continent for digital activities, and shared regulatory technology such as identity verification, e-taxation, and business registration systems. in Africa.
Partnerships with the private sector, building interoperable systems, and attention to electrical and Internet infrastructure are three key ideas that could help accelerate this digital integration.
Morocco has many advantages for business, including:
Location: Morocco is located at the crossroads of Africa, Europe, and the Middle East, with access to the Atlantic Ocean and Mediterranean Sea.
Workforce: Morocco has a well-educated, flexible, and skilled workforce.
Cost: Morocco has relatively low wages and a cost-efficient labor force.
Infrastructure: Morocco has modern infrastructure, including trade-supporting infrastructure.
Government: Morocco has a stable political environment and business-friendly laws and regulations.
Trade: Morocco has streamlined trade processing and is open to foreign investment.
Other advantages include:
Tax incentives
Financial rewards
Banking benefits
Freedom to do business
According to the World Bank, Morocco is ranked 53rd out of 190 economies for ease of doing business.
What is business domiciliation in Morocco?
Domiciliation consists of choosing as the head office of a company (called domiciliary) the address of another company (called domiciliary). This involves giving the domicile a legal address without it actually being there.
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Some Sweet Taste and Thought about a Country Crossing so Many Challenges Internally and Internationally if not also Regionally while it is the Heart of the African Union and the Most successful in Keeping its Independence during the time when Africa was the target of all occupations and invasions.
Africa Case – Study: Honey in Ethiopia
Here is To Bee Ethiopia with the Maker of Sweet Honey and Wax of the Bee
Ethiopia is also the fourth largest beeswax producer in the world after China, Turkey, and Argentina.
Ethiopia is also the continent’s leading producer and exporter of beeswax and honey. The country has approximately 7 million bee colonies.
Ethiopia is the largest honey producer in Africa, producing around 45,300 tonnes annually. However, the country’s potential annual production is estimated to be 500,000 tonnes of honey and 5,000 tons of beeswax. This gap is due to the country’s traditional production system, which results in low productivity.
Ethiopia has three honey production systems:
Traditional: Forest and backyard
Transitional: Intermediate
Modern: Frame beehive
Modern beekeeping is mostly practiced in the central highland and southwestern areas of Ethiopia. Popular systems include Zander, Langstroth, and Dadant.
Beekeeping is a long-standing agricultural practice in Ethiopia. It is a major component in the agricultural economy of developing countries. Beekeeping has been and still plays a significant role in the national economy of the country as well as for the subsistence smallholder farmers.
In 2018, Ethiopia produced 50,000 tons of honey This was produced by more than one million beekeepers, who maintained more than six million bee hives.
Generally, beekeeping is an old agricultural practice in Ethiopia. About one million households are involved in the honeybee’s business.
Ethiopia’s honey is known for its desirable qualities such as low moisture content and a variety of natural and delicious flavors.
Some challenges to honey production in Ethiopia include:
Lack of beekeeping knowledge
Shortage of trained manpower
Bee behavior: Swarming and absconding behavior of bees
Shortage of beekeeping equipment
Pests and predators
Pesticides: Increasing use of pesticides on farming land, inappropriate use of pesticides, and sublethal exposure to pesticides
Inadequate research and extension services
Bee forage: Limited availability of bee forage, especially water during droughts
Infrastructure: Poor infrastructure development
Credit: Lack of credit access
Financial: Financial problems
Input costs: High input costs
Climate change: Climate change hazards like flooding and droughts
Beekeeper safety: Theft and vandalism by humans
Some factors that could improve honey production in Ethiopia include:
Modern hives
The southwestern part of Ethiopia, has dense natural forests, appropriate environmental conditions, and different species of flora and fauna
Over the past 26 years, the average amount of honey produced per hive in Ethiopia is 8.3 kilograms. Traditional beehives produce between 5 and 8 kilograms of honey per colony per year. Modern hives can produce up to 60 kilograms of honey per hive.
The amount of honey produced per hive depends on several factors, including: Colony strength, Environmental factors, Bee forage availability, Hive type, Beekeeper management.
The most common way for beekeepers to make money is by selling honey. A single hive can produce 50–100 pounds of honey per year, which can sell for $5–$20 per pound. Raw honey is in high demand globally.
Other products from the hive include: Wax, Propolis, Royal jelly.
Beekeepers can also make money by renting out their bees for pollination services. Some beekeepers earn a full-time income from this alone. To do this, they need a lot of equipment, beehives, and experience.
Ethiopia Honey in the Global Market
Ethiopia is the largest producer of honey in Africa, accounting for 23.6% of the continent’s total production. However, Ethiopia only accounts for 2.9% of global honey production. This is due to differences in production methods.
Ethiopia is also the fourth largest producer of beeswax in the world.
In 2022, the average price of honey exports from Ethiopia was $3,555 per ton. The average price of honey imports into Ethiopia was $2,181 per ton. The global honey market was valued at $8.58 billion in 2021. It is expected to grow to $12.9 billion by 2030.
The United States is the world’s leading importer of honey. In 2022, the US imported $794 million worth of honey from other countries.
China is the world’s largest market for honey. In 2021, China produced over 472,000 metric tons of honey, which is almost five times more than the second-largest producer, Turkey.
The main buyers of Ethiopian honey are:
Germany, United Kingdom, Sudan, Norway, Saudi Arabia, Yemen.
The main buyers of Ethiopian beeswax are: Germany, Japan, United States, United Kingdom, Italy.
Global Honey Market and Producers
The global honey market was valued at $9.3 billion in 2023. It’s expected to grow at a compound annual growth rate (CAGR) of 4.4% from 2024 to 2032.
China is the leading country for honey production. In 2021, China produced about 500,000 tons of honey, which is a quarter of the global honey output.
Here are some other estimates for the global honey market:
2022: $8.9 billion
2021: $8.58 billion
2020: $8.17 billion
2017: Peak production of 1.88 million metric tons
Most of the world’s honey comes from domesticated beehives. The top five honey producers are China, Turkey, Argentina, Ukraine, and the United States. These five countries produce 1.2 million metric tons of honey annually.
Here are some of the top honey-producing countries:
China – The world’s largest honey producer. China has many honey bees and a variety of plants.
Iran – Produces about 77,000 tons of honey each year.
Turkiya – Produces 96,344 tons of honey. Turkey’s Black Sea region produces a rare and expensive honey called “Elvish honey”.
New Zealand – The country with the highest dollar value of honey exports in 2021. New Zealand is the sole distributor of Manuka honey.
Honey is a source of vitamins, minerals, calcium, and antioxidants. It’s also used to nourish bee colonies.
This is not professional financial advice. Consulting a financial advisor about your particular circumstances is best.
For Insights and Business Intelligence on Honey Sector in Ethiopia or in other countries, please send an email of interest to: info@triconsultingkyoto.com
The last decade has seen the optimism of Africa Rising give way to concerns of stagnation, debt, conflict and food insecurity. Yet many of Africa’s economies have continued to grow. African tech attracts large amounts of capital and the continent’s commitment to creating a single market has resulted in many other countries paying Africa unprecedented attention, creating opportunities to attract more investment. How can African countries steer the right diplomatic and economic course; manage the energy transition effectively and also create the economic conditions to ensure that its young, fast-rising populations find jobs to fulfil their own aspirations and contribute to their nations’ development?
Gather a prestigious line-up of businesses, policymakers and thought leaders from Africa and around the world for serious and productive discussion about the Africa continent’s challenges and aspirations.
77% of in-person attendees in 2023 were CEO, Managing Director, Vice President or Director level meaning you are amongst top decision-makers
An opportunity to establish new relationships and strengthen existing ties through the summit dinner, drinks reception and networking lunch
You’ll be joining a prestigious business community from across Africa and beyond
Here are some economic and investment summits in Africa:
2023 BRICS Summit: South Africa hosted the BRICS Summit.
Financial Times Africa Summit: A one-day event for business leaders, politicians, and financiers.
U.S.-Africa Leaders Summit: Built on shared values to foster new economic engagement.
Third Turkey-Africa Partnership Summit: Held in 2021.
India-Africa Forum Summit: Last held in 2015.
Other summits include:
Shaping Africa’s Future: Geopolitics. Business. Sustainability.: Brings together people from policy, business, and academia from African and European countries.
Some characteristics of African economic development include:
Economic growth coexists with severe poverty.
Considerable disparities between regions and countries.
Resource exploitation and economic diversification are both being pursued.
In 2023, Africa’s economy slowed to 3.3 percent from 4 percent in 2022. Growth is expected to rebound to 4 percent in 2024.
The Importance of Economic Summit in Africa
By Shirley Ze Yu is Director of the China-Africa Initiative at the Firoz Lalji Institute for Africa at LSE, and senior practitioner fellow at the Ash Center, Harvard Kennedy School.
Economic and investment summits are important for the economic development of every country in the world. The purpose of an economic summit or forum is to position stewardship at the heart of investment decision-making by facilitating dialogue, creating long-term solutions, and enhancing value.[1]Participants can discuss a wide range of subjects including investments, trends in the financial industry, market opportunities in the investment industry, good practices, and related topics. Other objectives of economic and investment summits include the following:
Providing a global platform for engagement and dialogue on emerging and key issues related to investing for sustainable development.[2]
Advancing projects to bankable stage, by effective project preparation as well as efficient transaction advisory services that advances deals in the Africa Investment Forum pipeline.[3]
Helping Africa finance its economic development projects and agenda.
Promoting and facilitate global trade between Africa and the rest of the world.
Creating a solid platform for the African diaspora to contribute to the development of the continent.
The significance of economic and investment summits is undeniable. Africa has a huge need of capital investment necessary to compete in the global economy. The continent is largely underdeveloped in a variety of sectors. Therefore, the promotion of capital investment remains a gigantic alternative to close this gap and advance Africa economically.
US-Africa Leaders’ Summit
U.S.-Africa Leaders Summit
A general view during the U.S.-Africa Leaders Summit at the Walter E. Washington Convention Center in Washington, D.C. on Tuesday, December 13, 2022 (U.S. Department of State)
The US-Africa Leaders’ Summit is another major international forum to be considered. It was born on August 4-6, 2014. President Barack Obama initiated this great program to consolidate ties with African nations based on clear principles such equal respect, mutual interests, and common values. For the United States, it represents a unique opportunity to build solid rapports with their African counterparts on several fronts: economic, political, diplomatic, geopolitical, and security. Since its inception in 2014 under President Barack Obama’s presidency, the US-Africa Leaders’ Summit has yielded several great fruits. For example, the 2022 Summit aims to:
Better foster new economic engagement;
Reinforce the U.S.-Africa commitment to democracy and human rights;
Mitigate the impact of COVID-19 and of future pandemics;
Work collaboratively to strengthen regional and global health;
Africa represents a great opportunity for both the US and the world. The Summit offers excellent pathways to tackle the challenges African nations face. The Summit provides the US with an open opportunity to engage directly with African leaders, including political leaders, business officials, entrepreneurs, and the diaspora. It also engages with major institutions on the continent such the African Union (AU), Economic Community of West African States (ECOWAS), and many more.
Forum on China – Africa Cooperation
The Forum on China-Africa Cooperation (FOCAC) was established in 2000 as a uni-multilateral partnership platform between China and 53 African states.[2] Like any other summits, the FOCAC is a platform economic cooperation, diplomatic exchange, security relations development, and social interactions between China and Africa. The forum has a clear objective and operating mechanism: to forge a new partnership with Africa and become the world’s most great power by 2049.
The New Africa-France Summit
The aim of this event, with a new format, new actors and new themes to address new challenges is strengthen the bonds between France and Africa.[3] Through this summit, France attempts to reshape its relationship with Africa in several domains: economy, security, business, culture, and politics.
Example of Economic and Investments Summits in Africa
There exist several economic and investment summits in Africa. They include: Nigerian Economic Summit, Africa Investment Forum, Africa Economic Conference, Invest in Africa Summit, Invest in Africa Connect, and Corporate Council on Africa U.S.-Africa Business Summit. Summits are organized by both African leaders, world investors, and governments.
1. The Nigerian Economic Summit
The Nigerian Economic Summit is a partnership between the Nigerian Economic Summit Group and Federal Ministry of Finance, Budget, and National Planning. The first Nigerian Economic Summit was held from February 18-20, 1993. It was held to build a dialogue an economic dialogue between the public and private sector in Nigeria. Since that first Summit, the Nigerian Economic Summit Group, a private sector led think tank, has organized the annual Nigerian Economic Summit in partnership with the Federal Government of Nigeria.
2. Africa Investment Forum
The Africa Investment Forum is Africa’s investment marketplace, championed by the African Development Bank and its partners, to accelerate the closure of the continent’s investment gaps. The Africa Investment Forum operates as a multi-stakeholder, multi-disciplinary platform dedicated to advancing projects to bankable stages, raising capital, and (c) accelerating the financial closure of deals. It is by far one of the most important economic and investment platforms on the African continent.
Figure: The Africa Investment Forum
Source: African Financial Development Bank, 2022.
A flagship initiative of the African Development Bank, the Forum was launched in 2018 with seven other founding partners: Africa 50; the Africa Finance Corporation; the African Export-Import Bank; the Development Bank of Southern Africa; the Trade and Development Bank; the European Investment Bank; and the Islamic Development Bank.
The Africa Investment Forum vision translates into three reinforcing objectives:
Advancing projects to bankable stage, by effective project preparation as well as efficient transaction advisory services that advances deals in the Africa Investment Forum pipeline;
Capital raising to mobilize partners and investors, especially institutional investors, for increased co-financing; and,
Accelerating financial closure of deals through a coordinated approach.[1]
Combined with $32.8 billion from the rescheduled 2021 Africa Investment Forum Market days—which took place as virtual boardrooms in March this year—the forum has mobilized a total of $63.8 billion of investment interest this year. Since its inception in 2018, the Africa Investment Forum platform has mobilized over $100 billion in investment interests.[2]The forum showcases the Africa Investment Forum’s founding partners’ joint resolve to help unleash Africa’s investment potential in such critical sectors as infrastructure, agriculture, energy, education, the creative industries, sports, and transactions that champion women entrepreneurs.
3. Africa Economic Conference
Source: United Nations Economic Commission for Africa
The 2022 African Economic Conference (AEC 2022), jointly organized by the African Development Bank (AfDB), the Economic Commission for Africa (ECA), and the United Nations Development Program (UNDP), is planned with the theme “Supporting Climate-Smart Development in Africa”. The conference brings together a variety of stakeholders—including policymakers, climate experts, the private sector, researchers, and youth—to discuss the challenges posed by climate change, identify opportunities and strategies for adaptation and mitigation, draw lessons from successes, identify key strategies for financing mobilization and draft an action plan to support the low-carbon and climate-resilient development of Africa.
4. Invest in Africa Summit
AFSIC – Invest in Africa Summit is one of the most important forums for Investment, Trade and Business into Africa. Invest in Africa Summit is recognized as a unique forum to initiate and promote business networking across Africa and to originate and conclude trade, investment, and close new business deals. The Summit gathers 1000-plus key economic players such as government delegations and policy makers, high-profile African leaders, project developers, investors, and entrepreneurs. The 2-days event provides a unique platform to gain strategic knowledge about African investment opportunities and business networking. The convention will cover economic sectors such as manufacturing and infrastructure development, agribusiness, Renewable Energy, Real Estate transportation, Digital Technology tourism, Financing SMEs, Women in Business, Healthcare, telecommunications, and Fintech, and natural resources sectors.[1]
5. Invest in Africa Connect
Invest Africa Connect is an initiative of Invest Africa, a leading business and investment platform, using over sixty years’ experience in Africa to provide its members with unique information and exposure to business opportunities. Through our Invest Africa Connect program, the organization partner with must-attend conferences, providing our members discounted rates on delegate seats, and invitation to special events taking place alongside these conferences. Invest in Africa Connect plays a central and influential role in Africa’s socio-economic growth by guiding sustainable capital towards key prospects on the continent. Headquartered in London, Invest Africa also operates from four chapter cities: Johannesburg, New York, Dubai, and Geneva.[2]Invest in Africa Connect is on the way to contribute to Africa’s private sector development in several ways.
6. Corporate Council on Africa U.S.-Africa Business Summit
The U.S.-Africa Business Summit is the largest and most influential U.S. conference on doing business and investing in Africa. The Summit explores a renewed commitment by both public and private sector stakeholders to building stronger U.S. and Africa trade, investment and commercial ties as we emerge from unprecedented health and economic challenges. The U.S.-Africa Business Summit brings together several U.S. and African private sector executives, international investors, senior government and multilateral stakeholders. Our objective is to enable you to connect with government and private sector decision makers over the course of four days and to deliver the insights that you need to move your organization forward.[3]The Summits include: plenary sessions and sector-oriented panels, invest in Africa country forums, welcome receptions and gala diners, private meetings, high-level dialogues, doing business in Africa with Prosper Africa agencies, B2B and B2G networking, and exhibition centers.[4]
What are implications of Economic Summits for Africa?
Economic summits carry out several implications no matter where they are held in Africa.
Economic growth
Economic Summits impacts economic growth and have the capacity to create a continental capital development ecosystem that benefits countries and society in general. The level of Africa’s economic development will be driven by the degree of investment opportunities it builds directly or indirectly. The more investment a country makes it in its economy the more economy growth it gets. For example, economic summit drives foreign direct investment.
FDI inflows to the African continent and subregions, 2020-2021
Source: World Investment Report 2022
This figure indicates that Africa has continued to attract foreign direct investment from a wide range of partners worldwide. Africa has a substantial private investment gap. Every business needs money to grow and generates revenue. For instance, from 2020 – 2021, Africa’s five regions: North, West, Central, East, and South Africa, attracted $83 billion.[1]
In the majority of cases, these businesses are spearheaded by Africans under the age of 35. In fact, 2021 was a record-breaking year for Africa’s start-up scene, which secured over $2 billion in funding. The African Development Bank (AfDB) attributes this mostly to “large economies and sizeable populations.”
Human Capital Development
There is an undeniable relationship between human capital and economic growth. What makes it possible is the amount of money and quality of capital investment. Capital investment is a critical contributor to the development of capabilities and knowledge.
Countries with high-quality human capital stocks can benefit more from the financial sector, as many scientists, researchers, doctors, accountants and financial analysts in these countries can make efficient and effective choices among different alternates. They are more efficient and effective in using opportunities and resources and can also innovate better to support the financial sector growth. These are all essential to promote growth in the economy.[2]
There is an excellent relationship between economic summit and financial capacity building and quality human resource development. A well-developed economic system is key to the growth of society in general. In this growing digital world, young people need to be trained to the new technology innovation and development norms as they influence the future of work. Money investment and economic growth are strictly related by the fact that a robust venture capital and foreign direct investment are facilitators of economic development. Economic summits should be at the center of Africa’s international investment attraction for development. Economic summits serve as platforms for African nations to accelerate cooperation and partnership for private sector development. Economic investment and human capital development are intrinsically linked or related. Investments in human capital (youth development) can generate returns.
At the diplomatic level
Economic investment creates or reinforces two types of diplomacy: business and economic. In the international relations, business and economic institutions are basically made up of rules and principles. In business management, it is called contract. In pure diplomacy, it is called cooperation. What is cooperation or international cooperation? International cooperation tends to be associated with development and economic growth. International economic cooperation between countries and/or companies can be seen as a vehicle for diplomatic relations development. Economic and business diplomats facilitate the creation of investment opportunities, build strong international business relations with foreign nations, and act as advisors to young people in their international career development. By organizing and promoting summits, countries seek to consolidate their economic ties and business diplomatic machine in several ways possible.
At the geopolitical level
Secretary of State Antony Blinken declares at the US-Africa Leaders’ Summit: “Africa is a major geopolitical force. It’s one that has shaped our past, it’s shaping our present, and it will shape our future.”
Figure: Anthony Blinken at the US-Africa Leaders’ Summit 2022
Source: US Africa Media Hub on Twitter
Africa represents a gigantic geopolitical battleground for major powers such as the US, France, Russia, and China. Home to what the world needs to continue its development and innovation, Africa remains the most significant geopolitical force. In support of this argument, Ambassador Rama Yade, director of the Atlantic Council’s Africa Center writes:
‘’US policy in Africa has been thrown off course by China, which is methodically implementing a grand, 21st-century Marshall Plan for the continent through its Belt and Road Initiative. And Beijing is hardly to blame. As home to a large share of the world’s water resources, untapped arable land, and by 2050 nearly 25 percent of the world’s population, Africa has emerged as the most important piece on the geopolitical chessboard. Without a drastic shift in strategy, the United States is on the verge of being on the outside looking in for decades to come’’.[1]
It is clear from the above that Africa will continue to attract diverse great powers for its significant amount of natural resources. The continent continues to grow in radical importance for the world including nations like China, America, Russia, and many more. The growing influence of China and Russia in Africa also worries America and its allies. Therefore, there will always be confrontations between these major powers out there. Rama Yade also emphasizes this rivalry in the following text:
‘’China is playing the long game in Africa and has strategically invested in infrastructure projects including railroads, ports, dams, and hydropower-generation sources. But these investments could be the warm-up act for China’s entry into fields traditionally dominated by the United States—namely technology and banking—where it aspires to compete with American heavyweights like Microsoft, Boeing, Google, and General Electric. Such game-changing moves would play into China’s larger ambition of unseating the US dollar’’.[2]
Economic and business summits also have geopolitical implications. Most summits are organized states and their institutions. The nature of these events becomes a political one. For example, China-Africa Forum is a pure product of the Chinese government, creating a clear pathway for them to invest in infrastructure development projects in Africa.
Key Lessons Learned from Organizing Economic and Investment Summits in Africa
There are several lessons to draw from the ongoing development and organization of economic and investment summits on the African continent. We see several benefits and challenges for the continent.
Africa’s development is impossible without proper venture capital investment
Source: Center for Economic Policy Research, 2021
Africa needs capital to grow. This comes from an effective combination of venture capital and foreign direct investment, and other investment opportunities. Dr. Eisen reports that lack of capital access is big problem and blocks the growth of innovation and entrepreneurship in Africa:
In order for Africa to fully utilize its business potential, however, there are many challenges to overcome. It is estimated that 70% of African startups lack access to talent and capital to grow their businesses. The proportion of female-founded startups in the first half of 2022 was only 27%, and investors based in Africa accounted for 29% of total investments. Building a diverse startup ecosystem at home is crucial to maintaining growth momentum and intensifying the technological and digital revolution. African VC firms, accelerators, entrepreneurial support programs and grants from government and nonprofit organizations should comprise this ecosystem.[1]
Dr. Leon Eisen is an inventor, entrepreneur, board member of the Global Africa Leadership Council, WBAF Senator and Oxitone Medical founder. His assessment of the grand challenges facing African entrepreneurs reinforces the urgent needs for African leaders to build more economic summits that would help close this huge gap. With proper management and organization, these investment would generate sufficient funds to accelerate the building of more entrepreneurs on the African continent. It is clear that Africa’s competition in the global economy will be highly dependent on how successful its youth are.
The venture capital big 4 investment paradox is a big problem
The World Economic Forum reports that 92% of Africa’s investment in tech is won by just four countries: Nigeria, Egypt, Kenya, and South Africa. Known as Africa’s ‘’Big 4’’, Nigeria, Egypt, South Africa, and Kenya continue to attract the important of foreign investment in terms of venture capital funding. The African Development Bank’s (AfDB) 2021 report states that these four countries account for about a third of the continent’s start-up incubators and accelerators and receive 80% of foreign direct investment (FDI) into Africa.[2]One of the plausible ways to address that issue is to facilitate greater investment opportunities everywhere in Africa.
In spite of global inflation and a macroeconomic environment that discourages investments, Africa’s venture capital ecosystem remained bullish in the first half of 2022. There were 445 venture capital deals (to 300 unique companies), setting another record with over $3.5 billion raised. Additionally, it is predicted that VC deals will reach $7 billion by 2023.[3]
The venture capital funding and raising predictions for the next coming years are promising. It is clear signs that the future of business is in Africa. Economic summits constitute great opportunities to finally embark Africa in the next development flight.
The building of responsible investment leadership and opportunities
Several nations in Africa faces several challenges in attracting regional and international investors. Examples of problems include poor infrastructure, corruption, poor international credit rating, and violence. Responsible investment leadership is crucial. In the current business environment, characterized by change and new and sometimes unpredictable challenges, it is important that leaders have the capability to act responsibly, to deliver a business which meets those challenges without causing detriment to their stakeholders or the world in which they exist.[4]
Responsible investment leadership can be seen to bring value and benefits to institutions and young people in Africa. Venture capitalists and investors do not invest in a country that does not fight corruption or create transparent capital investment protection policies. African leaders can all play a significant role in the development of a great continental economic development ecosystem by committed to being responsible investment leaders. A responsible investment in human capital, youth development, and economic development will benefit in a multitude of ways. African leaders should hold themselves accountable, so they should exemplify the characteristics of responsible investment leaders and encourage other populations to do so. A key role for responsible leaders particularly is to ensure that the country or organization is not simply focused on economic development objectives, but rather to propose and implement other key metrics, and provide evidence of the positive impact of responsible decisions. Calling for investment can assist with economic growth, although it is significant that not all leaders behave responsibly and have a measurable impact on society. By promoting responsible capital investment leadership, nations will contribute to a better society of culture and performance at all levels. Responsible investment leadership will contribute to the development of an ecosystem that will not leave African entrepreneurs’ hostage to the ever-growing big dollar whims of several venture capitalists and foreign investors.
Conclusion: where do we go next?
Africa is at the center of gigantic economic stakes for the world. Economic and investment summits constitute excellent engines that Africa should use to increase investment opportunities and improve the economic situation out there. Considering the above lessons African governments and policymakers should encourage international investment marketplaces through strong public-private partnerships. Money will always become the fuel that keeps an economy running. Therefore, economic and investment platforms such as summits and conferences will still be the center stage of capital raising through which Africa will grow its economy. Institutions such as the African Development Bank, US Chamber of Commerce, US Corporate Council on Africa, World Economic Forum, United Nations Conference on Trade and Development (UNCTD) can assist in the provision of economic summits to contribute to capital investment on the African continent. They provide platforms for engagement and dialogue on emerging and key issues related to investing for sustainable development. For Africa in particular, economic summits to promote new investments in industry can contribute to a significant amount of economic development and societal changes. International investment platforms will continue to become a driving force for a more inclusive and sustainable continental economic growth at all levels. The consequences of economic summits will be potentially far-reaching for the configuration of the continental value chain with big implications for economic development. Although most countries see a tiny fraction of venture capital investment as opposed to the Big 4’s, the promises of current successful investment promotion platforms throw a huge amount of optimism in the air.
Economic summits organized in Africa or by Africans across the world, like any other forms of investment platforms, will contribute to the construction of an incommensurable explosive economic dynamic, rebuilding the capital investment culture necessary to make Africa compete in the global economy. Economic summits help foster a solid innovation environment that sustains financial development and growth. Most significantly for making Africa the center stage of the world’s future and emerging as an economic powerhouse.
To that end, African leaders must encourage the building and organization of more economic summits that could be critical ways for generating capital funding and foreign direct investment, catalyzing new employment and business development in Africa, helping more young people find a place in a changing continental and global economy, and changing the economic story of a continent that is really one of the world’s greatest diplomatic machines.
As long as Africa does needs venture capital investment to grow and as far as the venture capital investment game continue to be played out across the globe, Africa will just sit and Watch. Indeed, young leaders will find ways to grab their parts of the cake.
Notes
Shirley Ze Yu is Director of the China-Africa Initiative at the Firoz Lalji Institute for Africa at LSE, and senior practitioner fellow at the Ash Center, Harvard Kennedy School.
Special note
The views expressed in this note can be attributed to the named author only.
[1]US Department of State (2022). US-Africa Leaders’ Summit. https://www.state.gov/africasummit. This piece of information was extracted from the Department of State’s Official Website.
