As an African entrepreneur, I keenly await the outcomes of the 2013
World Economic Forum on Africa. One of the key issues to be discussed is
how to accelerate economic diversification to deliver on Africa’s
promise. This can be explored on three different levels: the types of
industry and economic activity carried out across the continent; the
promotion of workplace inclusivity; and the rectification of some of the
economic imbalances in the demographics of many African economies.
Although Africa comprises 54 countries, all with their unique
challenges and opportunities, the legacy of colonialism persists: many
of Africa’s economies are highly dependent on extractive industries.
This makes them vulnerable to shocks when commodity prices fluctuate.
However, diversification is taking root in these extractive industries.
The 2012 Ernst & Young Africa attractiveness survey indicated that
64% of foreign direct investment into African manufacturing from 2003 to
2011 has gone into beneficiation-type activities in the extractive
sectors, allowing African economies to derive greater value from their
natural resources and buffer commodity price shifts.
Many African countries are actively seeking to break the
colonial-style extractive mould: Kenya, for example, is pushing the
development of its ICT sector. Continent-wide, over the past 100 years,
there hasn’t been enough emphasis on this type of diversification.
Private businesses can also support economic diversification. In
Angola, for example, a business incubator I run is funded by a large oil
firm, and the incubator’s mandate from the client is specifically to
develop entrepreneurs who are not linked to the oil industry so that the
community is sustainable beyond the client’s activities.
The next level of diversification to discuss is that of gender
diversity in the workplace. In South Africa (one of the most developed
African economies in this regard), a statement by the Commission for
Gender Equality indicated that only 16.6% of company directors and 6% of
company chairs are women. This state of affairs is depriving African
economies of the tangible benefits that a diverse leadership pool brings
to companies.
Finally, I anticipate the Forum’s deliberations on dealing with
inequalities that lead to social strife throughout Africa. South Africa
is addressing diversification in this regard through Broad-Based Black
Economic Empowerment (B-BBEE). From 2014, B-BBEE legislation will
pressure corporations into diversifying the racial profile of their
supply chains so that they are more demographically representative,
assisting in redistributing wealth to historically disadvantaged
business owners.
These diverse aspects of diversification all represent areas in which
clear-sighted policies can lead to sustainable economic growth, helping
Africa to deliver on its previously undreamed-of promise.
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