World Economic Forum On Africa 2007

World Economic Forum on Africa Raising the Bar Cape Town, 13-15 June 2007

Report

This publication is also available in electronic form on the World Economic Forum’s website at the following address: World Economic Forum on Africa Web report: www.weforum.org/pdf/summitreports/africa2007 (HTML) The electronic version of this report allows access to a richer level of content from the meeting, including photographs and session summaries. The report is also available as a PDF: www.weforum.org/pdf/summitreports/africa2007.pdf Other specific information on the World Economic Forum on Africa, Cape Town, 13-15 June 2007, can be found at the following links: www.weforum.org/africa www.weforum.org/africa/programme www.weforum.org/africa/partners www.weforum.org/africa/summaries2007 www.weforum.org/africa/indepth www.weforum.org/africaprivate www.weforum.org/africaprivate/knowledgeconcierge www.pbase.com/forumweb/africa07 www.forumblog.org/africaconversation

The views expressed in this publication do not necessarily reflect those of the World Economic Forum.

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Contents

Page 3 Preface Page 4 Summary: Raising the Bar Page 8 Building Capacity for Success Page 12 Enhanced Investment Page 16 Africa as a Global Partner Page 20 A Competitive Future Page 22 Pathways to Prosperity Page 24 Raising the Bar in the WorkSpace Page 26 Acknowledgements

2 | World Economic Forum on Africa

Preface

Haiko Alfeld Director, Head of Africa

With growth continuing unabated and a determinedly bullish mood on the ground, the 17th World Economic Forum meeting in Africa provided an opportunity for the leaders of the continent to reflect upon achievements and emerging prospects, but also on the obstacles to overcome to ensure a prosperous future for Africa. Sustaining growth will require decision-makers to “raise the bar” and aggressively tackle the existing as well as looming capacity and skills deficits that are threatening to throttle the considerable progress achieved thus far. Cognizant of this risk, the World Economic Forum on Africa exposed the emergence of a powerful consensus among key stakeholders to focus on the priority areas for fostering sustained growth in Africa. These include infrastructure, education, health provision, agriculture and strong institutions. We commend the leaders that have added deeds to words by spearheading concrete initiatives in these critical areas. The meeting itself reached new heights: high-level Indian and Chinese participation strengthened the now annual review of the booming Africa-Asia partnership. A good variety of appropriate session formats enriched and supported our signature style of informal interaction. And tough issues tackled in response to requests from leaders included climate change and a review of the current situation in Zimbabwe. We are also pleased that the meeting continues to serve as a platform for leaders to reflect upon Africa’s position in an increasingly globalized world where

opportunities such as new geopolitical constellations must be leveraged, while risks ranging from climate change to terrorism must be mitigated by adding an “African voice” to the ongoing international debates around these issues. We would particularly like to thank this year’s Co-Chairs of the World Economic Forum on Africa, who provided world-class leadership and the support needed to tackle the tough issues throughout the gathering. Thus we extend our appreciation to Cynthia Carroll, Chief Executive, Anglo American, United Kingdom; Li Ruogu, Chairman and President, Export-Import Bank of China; Tokyo Sexwale, Executive Chairman, Mvelaphanda Holdings, South Africa; and Malvinder M. Singh, Chief Executive Officer and Managing Director, Ranbaxy Laboratories, India. This overview cannot aim to do full justice to the depth, diversity and buoyant tone of this year’s discussions in Cape Town, but it will hopefully provide a taste of the resolve and vigour that emanated from the meeting’s nearly fifty sessions, workshops and plenaries. Instead of being a summary, this overview attempts to highlight some of the aspirations, successes and concrete pledges of the wide cross-section of leaders who took part in this event. We are already looking forward to welcoming you to the World Economic Forum on Africa in 2008 and count on you to build on this year’s deliberations and turn promises into reality.

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Summary: Raising the Bar

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All of what we do has to be linked to building the necessary capacity to take the continent away from poverty. Thabo Mbeki, President of South Africa

Africa's GDP Growth Sub-Saharan Africa Pacing the Continent's Growth 7% Sub-Saharan Africa

GDP Growth

Africa 6

World 5

4 2004

2005

2006

2007F

2008F

Source: IMF World Economic Outlook Database, April 2007

Expectations for Africa among Africans and outsiders have risen significantly in recent years in part because the continent has recorded its best economic performance in a generation. The African Development Bank expects growth to approach 6% this year. There are other reasons for the renewed confidence and optimism. Many countries have succeeded in resolving longstanding conflicts, trade with and investment from China have sharply increased, and the international community has focused much attention on Africa and its humanitarian challenges. Most important, however, is that Africans themselves are taking action to create solutions to the persistent problems they have faced such as poor governance and to pressure each other to act.

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Africa’s momentum is building. “The right policies are working,” said former Nigerian education minister Obiageli Katryn Ezekwesili, Vice-President, Africa Region, at the World Bank in Washington DC. But, she advised, the continent itself must raise the bar and pursue an even more ambitious “internally driven” development agenda. Africa has to build on its successes by bringing standards of governance higher, deepening continental integration, spreading more widely the benefits of globalization, and redoubling efforts to confront the perpetual problems of disease, hunger, illiteracy and civil strife. The optimism and goodwill that greeted former United Nations Secretary-General Kofi Annan’s announcement that he would lead the Alliance for a Green Revolution in Africa (AGRA), a new coalition aimed at finding practical ways to ease the burdens of hard-pressed small-scale farmers and invigorate the languishing agricultural sector, stemmed from the recognition among participants and other stakeholders in Africa that only such homegrown approaches can work. “It will succeed because African leaders themselves have committed to it; they haven’t just talked,” said Mamphela Ramphele, Executive Chairperson, Circle Capital Ventures, South Africa. Armed Conflict in Sub-Saharan Africa on the Decline

40 35 State-based armed conflicts, world

Number of conflicts

To frame their discussions, participants at the World Economic Forum on Africa in Cape Town used South African President Thabo Mbeki’s call at last year’s meeting for a focus on capacity building and implementation. Planning ambitious projects and taking in investments and aid money is one thing, actually getting things done and initiatives launched and running is another.

30 25 Non-state armed conflicts, world 20 15 Non-state armed conflicts, sub-Saharan Africa 10 5 State-based armed conflicts, sub-Saharan Africa 0 2002

Source: Human Security Brief 2006

2003

2004

2005

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Klaus Schwab, Founder and Executive Chairman, World Economic Forum

“We want to talk about and celebrate our successes,” said meeting Co-Chair Tokyo Sexwale, Executive Chairman, Mvelaphanda Holdings, South Africa. But at this crucial point in what looks like a sustainable African boom, success cannot be taken for granted. “There are still huge areas that need reform,” Ezekwesili warned. “Let’s not be triumphant.” Under the theme “Raising the Bar”, the programme of this year’s World Economic Forum on Africa was divided into five sub-themes. Participants made the following key points during the meeting:

• Capacity building is needed in both urban and rural areas, in both the public and private sectors, and in all sectors of the economy. The lack of skills should be an urgent focus. • Public-private partnerships will be essential for capacity building. Also critical: good governance that focuses on achieving results by solving specific problems and not getting bogged down trying to address large and complex ones. Infectious Diseases Still a Major Cause of Death in Africa

35%

Building Capacity for Success The need to build Africa’s capacity to absorb investment and aid and to implement its development plans efficiently was highlighted by South African President Mbeki at the 2006 meeting. This priority was the starting point for discussions by participants this year.

30

Percentage of all deaths

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The world needs Africa as much as Africa needs the world.

TB

25

Malaria

20 15 HIV/AIDS

10 5 0 Total World

Total Africa

Sub-Saharan Africa

Source: World Health Organization

• Building the capacity that will help Africans out of poverty must be the over-arching goal of every development agenda and initiative for the continent. Africa needs the capacity to maximize the benefits of the investment, trade and aid pouring into the region. • Africa must also develop the capacity to implement regional approaches to problems that require such solutions. These include the lack of infrastructure, the threat of infectious diseases, climate change, hunger, the need to develop financial markets to ease access to capital, and water supply, among others.

Enhanced Investment Money available for Africa’s development is not in short supply. Infrastructure and investment funds are mushrooming and there is no shortage of interest from institutional and other investors. The focus now is on doing more with finance, in particular using funds to boost private sector participation.

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Malvinder M. Singh, Chief Executive Officer and Managing Director, Ranbaxy Laboratories, India; Co-Chair of the World Economic Forum on Africa; Young Global Leader

• There no longer appears to be the broad view that the whole continent is a high-risk region. The chief obstacle today is a lack of bankable projects, the limited number of financial instruments, capacity constraints, and a lack of liquidity in local markets. • There is concern that many of Africa’s financial markets are not modern enough to cope with the growing demand. This is prompting African companies to look to international exchanges to raise capital. • Africa’s ability to integrate its markets is hampered by the fact that its monetary systems remain fragmented. Africa must regionalize to help make its small economies more globally competitive. • There are other key challenges to overcome, including the aversion of the private sector to investing in infrastructure projects and the lack of skills.

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Globalization without the active participation or involvement of Africa is neither complete nor fair.

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Some of Africa’s markets are so small. Every country has different regulations and requirements for the same product. There is no stability in policy. If we can get a larger market and place in which to operate, the economies of scale and the benefits to the customer can be substantially larger.

Li Ruogu, Chairman and President, Export-Import Bank of China; Co-Chair of the World Economic Forum on Africa

Africa as a Global Partner Africa’s global profile has been given a new sheen by the interest taken in the continent by emerging economic superpowers, China and India. The G8 countries have, at the same time, been accused of failing to give the continent the support they have promised. • China and India have approached Africa differently from the West, seeking partnerships and cooperation rather than the neo-colonial and paternalistic relations many African countries believe characterize relations with western nations. Africa has been a major beneficiary of China’s voracious appetite for raw materials. • China says that the closer partnership between Asia and Africa allows both regions to better address the challenges of globalization. • There is rising scepticism in some countries and among some sectors that China is undermining African business interests with cut-price contracts and cheap goods and that Chinese investors do not adhere to regulations on mining safety and intellectual property protection. • Africa must confront global challenges such as climate change. But to do so and to participate more fully in the global economy, the continent must deepen its regional links and increase intra-African commerce.

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Cynthia Carroll, Chief Executive, Anglo American, United Kingdom; Co-Chair of the World Economic Forum on Africa

A Competitive Future Africa’s competitive performance as measured by the latest World Economic Forum Global Competitiveness Report indicates that despite considerable progress the continent must further raise the bar. To do so will require focusing on enhancing human capital, deepening regional integration, fostering energy innovation and increasing the global demand for African products. • Africa must reinvest the gains of recent years in its most precious resource – its people. While education and skills training are important, the urgent priority must be to create jobs. • African countries need to find ways to meet the continent’s growing demand for energy. To do so may require the development of alternative sources such as biofuels which, if fully harnessed, could also become a new source of export earnings. • Regional integration is critical. From air travel to mobile phone use, Africa must focus on trade and investment facilitation and lowering barriers to doing business on a regional basis. • To promote global demand for their products, African business has to build the Africa brand.

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Companies must commit themselves to good governance, including China and India, as they come into Africa so these relationships can be exploited maximally for development.

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What attracts us to Africa and what will propel us to more activities and investment? First is willingness in the countries where we are to engage and act as partners. It’s all about partnerships and business partnering with the community, stakeholders and governments.

Tokyo Sexwale, Executive Chairman, Mvelaphanda Holdings, South Africa; Co-Chair of the World Economic Forum on Africa

Pathways to Prosperity While most Africans are optimistic about their future, as the economic fabric of the continent changes – particularly through urbanization – governments, businesses and civil society must forge partnerships to ensure that reality matches aspiration. • A key challenge for African development is to unlock the potential of the continent’s new urban dwellers by further developing technologies such as mobile telephony that allow them to participate in the market through increased access to financial services. • Another key priority is to provide fast-growing cities with greater and more reliable access to electricity. • It is crucial to improve the access of Africans to healthcare. Of particular urgency is the need to scale up partnerships to combat HIV/AIDS, malaria and tuberculosis. • To consolidate Africa’s socio-economic gains, efforts are needed to increase public ownership of government. Initiatives to improve governance, such as the launch of an index of governance performance and programmes to combat corruption, are essential.

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Building Capacity for Success

Ngozi Okonjo-Iweala, Distinguished Fellow, Global Economy and Development, Brookings Institution, USA

At last year’s World Economic Forum on Africa, South African President Thabo Mbeki told participants that an urgent priority for Africa is to develop the ability to implement its ambitions. The continent, which has been growing at unprecedented rates, has managed to resolve a number of lingering conflicts and to create a more attractive business climate, he said. There is fresh enthusiasm about Africa among investors and renewed zeal among the international community to address the persistent problems of poverty and disease. There are multiple Africa initiatives under way, from infrastructure projects to HIV/AIDS prevention schemes. “In reality, we have to implement programmes to which we have already agreed,” Mbeki said last year. “Basically our challenge is our capacity to implement those plans. The capacity to implement stands at the centre of our challenges.” The president’s call for capacity building was the starting point for this year’s meeting. At the opening plenary, Mbeki reiterated his concerns about the constraints on growth that result from the lack of capacity. “All of what we do has to be linked to building the necessary capacity to take the continent away from poverty,” he said. Both hardware and software are needed. Building schools to improve education will do little if the roads and transport systems are not there for students to get to the facilities. Pouring investment into infrastructure will have little impact if poor governance and weak rule of

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In the last 50 years, governance in Africa has gone downhill and is in bad shape. The question we need to ask is: how do we get out of this situation?

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We need the capacity to be able to negotiate with the private sector.

Mo Ibrahim, Chairman, Mo Ibrahim Foundation; Chairman, Celtel International, United Kingdom

law mean that the money is wasted or does not get deployed correctly. The benefits of constructing power plants will be sharply reduced if an economy does not have the workforce with the skills to operate and maintain them properly. A further complication is that Africa, like other areas in the world, increasingly needs regional solutions to problems. Countries have to collaborate to address such challenges as the continent’s infrastructure deficit, the threat from infectious diseases, hunger and food shortages, water supply and climate change. But, as Mbeki pointed out, Africa’s “regional communities don’t have the capacity to design regional projects even though the concepts are there.” Regional institutions are simply not strong enough. Capacity has to be built at all levels, with all sectors of society contributing. Consider the recently launched campaign for a “Green Revolution” for Africa. At Cape Town, former United Nations Secretary-General Kofi Annan announced that he would lead the Alliance for a Green Revolution in Africa (AGRA), a new coalition aimed at finding practical solutions to “the major cause of our continental poverty – an agricultural

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Politicians should no longer be allowed to get away with saying that democracy should be different in Africa. International standards have to apply to Africa even though they may have to be defined in a way that makes them applicable to African countries. Leaders can no longer hide behind the notion of the uniqueness of Africa.

2010 on Track?

Mamphela Ramphele, Executive Chairperson, Circle Capital Ventures, South Africa

Jordaan pointed out that FIFA owns the World Cup – and it is a risk-averse organization. If it did not trust South Africa’s ability to host the event, it would not have chosen the country.

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sector that has languished but is now poised to be so much more productive and dynamic.” AGRA’s objective is “to dramatically increase the productivity, food security, incomes and livelihoods of small-scale farmers, many of whom are women.”

“The World Cup is here in South Africa to stay,” declared Daniel Alexander Jordaan, Chief Executive Officer, 2010 FIFA World Cup Organising Committee, South Africa. “Local companies have invested more than US$ 700 million – which is higher than the amount invested locally in the Korea-Japan tournament. Surely these companies know what can be achieved,” he said in a session assessing South Africa’s progress.

Rob Hughes, Sports Columnist, International Herald Tribune, France, took issue with this view: “It is South Africa’s World Cup; you should take ownership of it. Don’t rely on [FIFA head] Sepp Blatter to provide a World Cup. He can’t, you can,” said Hughes. South Africa is not going overboard in its expectations, said Tokyo Sexwale, Executive Chairman, Mvelaphanda Holdings, South Africa, and a Co-Chair of the World Economic Forum on Africa. “Not only will we meet expectations, we will surpass them. This is the single biggest capital injection into one country under a sporting code. There will be huge legacy benefits. Also, it is a chance to maximize tourism benefits like no other.”

Literacy on the Rise Across Most of the Continent

90 80

Adult literacy rate

There are extremely high expectations for the 2010 FIFA World Cup in South Africa. But is 2010 really a Holy Grail or silver bullet? And can South Africa deliver on the high expectations?

70 60 50 40 30 20 Senegal

Morocco

Ghana

Sudan Sub-Saharan Algeria Africa

Source: World Bank World Development Indicators

Egypt

Kenya

Tunisia

1990 2006

1990 2006

World

South Africa

Asked if World Cup construction is on track, Norbert Jorek, Group Executive Director, Murray & Roberts, South Africa, acknowledged that “time is tight”. He said: “We have three years to complete the 2010 building programme, and we will need them. We must fight complacency. We have to stop fiddling about with specificity of designs. If you want marble floors, put them in after 2010.”

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Klaus Schwab, Founder and Executive Chairman, World Economic Forum; Tumi Makgabo, Manager, Communications, 2010 FIFA World Cup Organising Committee, South Africa; Armando Emilio Guebuza, President of Mozambique; Dinnah Rissle Kapiza, Agro Dealer, Malawi

Africa’s skills shortage is a major constraint on growth. Kapil Sibal, Minister of Science and Technology and Earth Sciences of India, warned that to retain skills, African countries must implement policies that offer people employment opportunities and attract citizens abroad to return home. An estimated 20,000 African professionals have emigrated from the continent every year since 1990. “We need more skills in Africa,” said Gérard Wolf, Senior Executive Vice-President, International Operations, Electricité de France (EDF), in a session on the energy sector. “We need engineers. We need people to run plants. We need people. We don’t have enough Africans.”

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We need people with a can-do attitude who will break through barriers and get the job done. Ng’andu P. Magande, Minister of Finance and National Planning of Zambia

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Small-scale farmers need to find markets. We need to strengthen capacity at the community level.

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Few would doubt that a Green Revolution would indeed address poverty in Africa at its core. But for the campaign to succeed will require more than just high-yielding crops and modern biotechnology. What will be needed are improvements on a number of fronts including infrastructure, water management, financial services, market access and distribution, and trade facilitation. Said Dinnah Rissle Kapiza, an agro-dealer from Malawi: “Small-scale farmers need to find markets. We need to strengthen capacity at the community level.” That means educating farmers, Armando Emilio Guebuza, President of Mozambique, told participants. “Besides using better seeds, more water and irrigation, we need to train people,” he explained. “The knowledge students get in school may not be relevant. That is why our emphasis is on technical training.”

Dinnah Rissle Kapiza, Agro Dealer, Malawi

Building capacity is not simply the government’s job. Public-private partnerships are critical, given the limited resources and skills of government. Business can help government overcome capacity gaps, particularly in finance and trade, said Richard Samans, Managing Director, Centre for Public-Private Partnerships, at the World Economic Forum. Often the public sector is ill equipped to forge mutually beneficial alliances with business, much less execute them. “The public sector needs to build the capacity to get into such partnerships” in the first place, reckoned Mbeki. “There are many examples of such partnerships across the continent that failed because they were not equal.” Added former Nigerian finance minister Ngozi Okonjo-Iweala, now Distinguished Fellow, Global Economy and Development, Brookings Institution, USA, “We need the capacity to be able to negotiate with the private sector.” In a way, the great endeavour to deliver Africa from poverty and pave the way to prosperity is not unlike South Africa’s preparations for the 2010 FIFA World

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We need more skills in Africa. We need engineers. We need people to run plants. We need people. We don’t have enough Africans.

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A. Michael Spence, Professor Emeritus, Stanford University, USA

Gérard Wolf, Senior Executive Vice-President, International Operations, Electricité de France (EDF), France

Cup but on a grand, continent-wide scale. For the event to be a success, many different factors and components must come together – the infrastructure, the marketing, the community support, the coordination among host cities, the security arrangements and, of course, the fans. For Africa to achieve the kind of progress that much of South and East Asia have in the past two decades, it must address multiple deficiencies and bring together a host of essential ingredients.

As with the World Cup, Africa has its die-hard sceptics, critics who persistently doubt that the continent can build the capacity it needs to succeed in the long term. “There is little we can do about Afropessimism,” meeting Co-Chair Tokyo Sexwale, Executive Chairman, Mvelaphanda Holdings, South Africa, conceded in a session on the World Cup. He might as well have been giving all of Africa advice as the continent faces the long-term challenge of mastering the globalization game: “We can still change perceptions with effective communications. But actions speak louder than words. We must just show people what we can do.”

Yet as Mbeki advised in the closing plenary, it is important that African countries focus on specific problems and not try to take on ones that are too big or too complex. “If you deal with one big lump, it is something you can’t chew,” he said. Africa will require many blueprints for action that will vary across regions. The success of these efforts will depend in large part on the quality of governance in both the public and private sectors. For this reason, the initiative of the Mo Ibrahim Foundation to launch a governance index to assess the quality of Africa’s leaders is a significant step in promoting good governance and accountability.

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We are often asked why we don’t just increase capacity to deal with the [energy] problem. But we don’t have capacity to increase capacity.

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We need to build strong institutions. We need more partnerships between the public and private sectors to minimize the risks.

Carlos Poñe, Chief Executive Officer, ABB, South Africa

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Enhanced Investment

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Thierry Tanoh, Director, Africa Department, International Finance Corporation (IFC), Johannesburg

Maria Ramos, Group Chief Executive, Transnet, South Africa

There is no shortage of investor interest in Africa, despite a lingering perception of high risk. However, the level of risk depends very much on the country in which the investment is made and what is being invested in, which allows significant risk mitigation. There no longer appears to be the broad view that the whole continent is a high-risk region. Investors are seeing high returns on investments and there is increasing interest in opportunities on the continent. The problem is not a shortage of money; it is a lack of bankable projects, a lack of financial instruments, capacity constraints and a lack of liquidity in local markets. Private Capital Flowing into Sub-Saharan Africa Both debt and equity flows are returning 8% 7

35

6

30 FDI inflows (2-year rolling average)

Net private debt flows

5

25 Portfolio equity inflows

20

4 3

15 FDI inflows

10

2 1

5

0

0

-1

-5 1998

1999

2000

2001

2002

2003

Source: World Bank

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2004

2005

FDI inflows to sub-Saharan Africa as percentage of worldwide FDI

Private flows of capital to sub-Saharan Africa (US$ billion)

$40

I sometimes think we plan to death and we are not good at the execution.

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Africa is the place to be.

Some of Africa’s 19 stock exchanges appear to be gearing up for increased demand both locally and from abroad. But there is a concern that many of them are not modern or sophisticated enough to cope with the growing demand. In fact, a poorly resourced exchange may rather be a deterrent to investment. South Africa remains by far the largest and most sophisticated exchange in Africa, accounting for about 90% of the continent’s liquidity. Its market capitalization of more than US$ 700 billion is well ahead of the next biggest contenders – Nigeria, with a market capitalization of US$ 62 billion, and Morocco at US$ 58 billion. Similarly, institutional assets under management in Africa include US$ 200 billion in South Africa, compared to US$ 4 billion in Botswana and just US$ 400 million in Zambia. Capital markets in some countries are growing – Nigeria has seen capital market growth of 71% over the past five years – while some of the smaller exchanges, such as those in Botswana and Zambia, have developed world-class systems. Bond markets are also being developed in a number of countries. But overall, the exchanges remain fragmented, with different operating systems, little information sharing and poor liquidity. A paradigm shift is required to an era of greater openness, linkages and innovation to ensure their success.

Stefano Manservisi, Director-General, DG Development, European Commission, Brussels; Marilou Jane Uy, Sector Director, Africa Finance and Private Sector Development Department, World Bank, Washington DC; Trevor Manuel, Minister of Finance of South Africa; Lumkile Mondi, Executive VicePresident, Professional Services, and Chief Economist, Industrial Development Corporation (IDC), South Africa; Li Ruogu, Chairman and President, Export-Import Bank of China, and Co-Chair of the World Economic Forum on Africa

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No African country individually can be competitive in the next 20 years because they are too small.

The path to prosperity in Africa begins at the fields of African farmers. Kofi Annan, United Nations Secretary-General (1997-2006)

Stefano Manservisi, Director-General, DG Development, European Commission, Brussels

According to Nicky Newton-King, Deputy Chief Executive Officer, Johannesburg Stock Exchange, South Africa, and a Young Global Leader, if African exchanges do not become more liquid and more innovative, large African companies may move to international exchanges. There are already 30 to 40 African companies listed on the London Stock Exchange, with the local economies losing out on the benefits. South Africa has called for African exchanges to operate from the same platform, offering theirs, which is also used by the London Stock Exchange, as a possibility. They have responded to fears that this will lead to South Africa’s domination of smaller exchanges by saying it will merely be a technical issue and will offer benefits to both the exchanges and to investors, who would have easier access to African markets.

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Governments must stop thinking nationally and start thinking regionally.

Africa’s ability to build integrated markets is being hampered by the fact that its monetary systems remain fragmented, mostly because of sovereignty concerns. This is out of step with the mantra of regionalization as the answer to Africa’s problems of small markets and uncompetitive economies. The emphasis on regionalism is also a focus of infrastructure funding in Africa, as regional funding means greater spending efficiencies, the provision of linked infrastructure across borders and a sharing of risk. Low savings levels remain a problem in Africa, affecting the ability to fund development domestically. However, plans are under way to leverage African pension funds, estimated to be worth US$ 160 billion collectively, to fund infrastructure.

M. G. Qhena, Chief Executive Officer, Industrial Development Corporation (IDC), South Africa

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South Africa's success in the financial sector is to get services extended to the poorer communities.

Mobile phones are 'power tools' for banking the unbanked. Caleb M. Fundanga, Governor of the Bank of Zambia

Trevor Manuel, Minister of Finance of South Africa

Foreign funding for infrastructure and development continues to increase. Indeed, the European Commission announced at the World Economic Forum on Africa that it will inject 6 billion euros into regional infrastructure projects over the next six years, while the International Finance Corporation (IFC) says it plans to increase spending in Africa to take advantage of strong commodity prices and fewer conflicts on the continent. “Africa is the place to be,” declared Thierry Tanoh, Director of the Africa Department at the IFC. However, there are still concerns related to the challenge in getting infrastructure projects to the bankable stage and to the private sector’s risk aversion in infrastructure projects. Another critical area is a lack of skills – the continent simply does not have the human resources capacity to drive large projects. “We are often asked why we don’t just increase capacity to deal with the problem. But we don’t have capacity to increase capacity,” said Carlos Poñe, Chief Executive Officer, ABB, South Africa.

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Skills shortages and institutional capacity constraints are also affecting countries’ ability to absorb large investments. As Colin Coleman, Managing Director, Goldman Sachs International, South Africa, asked, “Do countries such as Nigeria, Kenya and Angola really have the legal and regulatory systems to handle deals of this size?” To illustrate his point, he was citing several of the large deals recently concluded in South Africa, such as that between UK banking giant Barclays and South Africa’s Absa banking group. While South Africa is the biggest investor in Africa currently, there are calls for more investment to flow from the economic powerhouse to the rest of the continent. The South African government has relaxed exchange controls on investment targeted at the continent in a bid to encourage such investment flows. This is allowing large South African multinationals to increase their African investments. For example, mining conglomerate and Africa’s largest company, Anglo American, announced at the World Economic Forum on Africa that it would be putting US$ 3.5 billion in new investments into Africa over the next five years.

During the Africa Conversation

Energy Poverty Alliance

Africa Conversation

The World Economic Forum has launched a private sector-led initiative to bring energy to more people in subSaharan Africa – three-fourths of whom do not have access to electricity. The new Energy Poverty Alliance will deliver business expertise and best practices to reduce energy poverty in the region, which has the lowest electrification rate in the world.

One month before the World Economic Forum on Africa, the Forum created an Africa Conversation blog and invited people around the world to contribute ideas and questions for a special session at the meeting in Cape Town. Fully incorporating the spirit of Web 2.0, more than 50 comments and questions were received via the site, e-mail, SMS, voicemail or videos uploaded to YouTube.

More than 70,000 people in Lesotho and the Democratic Republic of Congo are set to receive electricity in a pilot project run by the Alliance’s three initiating partners, British Columbia Hydro and Power Authority (Canada), Eskom (South Africa) and Vattenfall (Sweden). The three are Industry Partners of the World Economic Forum.

The questions were put to the leaders participating in the session, with the answers filmed and reposted on the Internet. The result was a conversation between participants, panellists and concerned global citizens.

“The joint solution of using alternative sources of renewable energy, expanding the national and regional grids, and using innovative, cost-effective technologies will contribute to more individuals, industries and businesses gaining access to electricity,” said Steve J. Lennon, Managing Director, Resources and Strategy, Eskom, South Africa. The Development Bank of Southern Africa (DBSA) will host the Energy Poverty Alliance Management Unit (EPAMU) in Johannesburg, and operations will start on 1 September 2007. “It is a milestone for the World Economic Forum to have DBSA as a partner of the Alliance. This provides a good platform to link international business capability with local community needs, to develop a brand for electrification projects and help develop financing mechanisms,” said Christoph Frei, Director, Head of Energy Industries at the World Economic Forum.

Responding to a question concerning the recent Nigerian election, Mo Ibrahim, Chairman, Mo Ibrahim Foundation, and Chairman, Celtel International, United Kingdom, commented that the main problem in Africa is poor governance. A posting from Russia asked what benefits Africa can derive from international trade. Firmino Mucavele, Chief Executive, NEPAD Secretariat, South Africa, replied that the continent’s first priority is to grow intra-African trade and remove the high transaction costs between individual countries. "Even if an integrated global trade framework is not yet working properly, Africans should still be able to trade easily among themselves." Read other questions and watch leaders’ responses at forumblog.org/africaconversation

15 | World Economic Forum on Africa

Africa as a Global Partner

“

I don’t see why there should be questions about a relationship that is growing between Africa and India and China, or any other country for that matter.

“

Mandisi Mpahlwa, Minister of Trade and Industry of South Africa

Africa’s global profile has been significantly enhanced by the keen interest taken in the continent, primarily in its raw materials, by China and India. The emerging South-South partnership has caused concern among the continent’s traditional trading partners in Europe and America, who have done business on the continent on their own terms, unchallenged, for many years. These relationships are under scrutiny in light of both the new South-South trading relations and of a new assertiveness by Africans themselves in setting their own development agenda. Countries such as China and India have approached business with Africa differently from the West, seeking partnerships and cooperation rather than the neocolonial and paternalistic relations many African countries believe they have with Western nations. China’s voracious appetite for raw materials has changed global trading patterns, and Africa has been a major beneficiary. The quest for raw materials has been accompanied by increasing aid and trade with African countries as well as the financing and implementation of large infrastructure projects. Africa's Exports to China Booming Though China's trade represented less than 10% of Africa's external trade for the first three quarters of 2006

Year over year growth in exports

100%

South African Minister of Trade and Industry Mandisi Mpahlwa claimed that those questioning the value of Africa’s relationship with Asian giants are to be found among the continent’s traditional trading partners. He said Africa should not be questioned by the rest of the world about its trading relationships, although he cautioned that value addition should be encouraged. Mpahlwa also suggested that African countries should not wait for India and China to create the opportunities for them but should be proactive about getting the relationship on a footing that would allow them to derive maximum benefit from it. The minister said South Africa, currently the biggest investor in Africa, had faced the same concerns from African countries as are being raised now about India and China when its companies moved into the rest of the continent after 1994. “The fact that there were some negative impacts doesn’t take away from the investment made in new capacity in Africa and the new opportunities created,” he said. China says it is seeking a partnership with Africa based on cooperation and friendship. “It is of great significance for Asia and Africa to forge closer partnerships so we can better address the challenges of globalization,” Li Zhaoxing, Foreign Minister of the People’s Republic of China from 2003 to 2007, told participants, noting that the 800 Chinese companies operating in Africa are improving the lives of Africans.

80

60

40

$19 billion through 3Q2006

Exports to China (incl. HK)

20

$184.5 billion through 3Q2006

Exports to world (x-China) 0 2002

2003

2004

2005

2006*

* non-seasonally adjusted full-year based on data through 3Q2006

Source: IMF

16 | World Economic Forum on Africa

There is, however, a rising tide of resistance in some countries and businesses to the way China is undermining African business with cut-price contracts and cheap goods as well as to its lack of regulation in terms of mine safety and in intellectual property issues. There are concerns among Africans that the continent will emerge from this new relationship a decade down the road and find it has, once again,

“

Abdoulaye Wade, President of Senegal

Other risks for Africa from this relationship include the lack of diversification and industrialization, which limits the continent’s ability to exploit the relationship meaningfully, and the fact that any economic slowdown in these countries, notably in China, will have a major impact on commodity prices and, in turn, on Africa’s economic growth. Meeting Co-Chair Tokyo Sexwale, Executive Chairman of Mvelaphanda Holdings, urged India and China to adhere to corporate governance principles in their dealings with Africa. “India and China will have to behave in a manner that is seen to be far removed from the accusations made about our traditional partners,” he said, citing colonialism, financial imperialism and paternalism.

Temitope W. Oshikoya, Director, Development Research Department, African Development Bank (ADB), Tunis

Questions have been raised about the ways in which African countries should react to the risks posed by global developments. The continent remains particularly exposed to global risks for various reasons, including its continuing dependence on raw materials and related vulnerability to price shocks, poverty, weak democratic processes, corruption, the slow movement towards creating regional efficiencies and a serious lack of skills and capacity. A risk commonly raised in relation to Africa is that of global warming and climate change. Although Africa’s generally low levels of industrialization mean it is not a key contributor to changing climate patterns, the continent is likely to be the worst affected by the phenomenon. African governments do not appear to

“

Are the Millennium Development Goals some distant yardstick or are African governments working to achieve them?

“

had its natural resources plundered by foreign superpowers with little value added along the way, thus repeating the much-criticized pattern of the colonial and post-colonial era. “We face a challenge on the African continent that we have faced before – dealing with an energetic superpower, a highly sophisticated nation,” said Stanley Subramoney, Deputy Chief Executive Officer, PricewaterhouseCoopers, South Africa. “We are again in danger of swapping the family silver for presidential palaces and the like. The race is on for commodities and resources – are we sophisticated enough to deal with this?”

There is increasing evidence that African governments are keeping the promises they made to the G8. Now the other side must come through with their promises.

“

“

“

You cannot develop a continent without energy. Africa needs to take a part in the oil business.

Zohra Dawood, Executive Director, Open Society Foundation for South Africa

17 | World Economic Forum on Africa

Li Ruogu, Chairman and President, Export-Import Bank of China, and Co-Chair of the World Economic Forum on Africa; Kapil Sibal, Minister of Science and Technology and Earth Sciences of India; Li Zhaoxing, Foreign Minister of the People's Republic of China (2003-2007); Mandisi Mpahlwa, Minister of Trade and Industry of South Africa; Tokyo Sexwale, Executive Chairman, Mvelaphanda Holdings, South Africa, and Co-Chair of the World Economic Forum on Africa

Morocco Algeria

Egypt

Nigeria

Vulnerability to effects of climate change Extreme High Medium Low No data

South Africa

Source: Maplecroft

be prepared for the challenge, either in terms of mitigating the risks emanating from it, such as food and water scarcity, or in terms of taking advantage of the opportunities the situation presents. These include the development of biofuels on Africa’s vast tracts of unused agricultural land, and carbon trading. There are concerns that the continent’s reaction to climate change will eventually be one of crisis management, particularly in addressing new frontiers of conflict in the battle over ever-reducing resources. The G8 remains a challenge for Africa, given the significant aid dependence of most countries, and stands accused of not keeping the promises it has made to African presidents at successive meetings. These include pledges to increase aid and to provide

18 | World Economic Forum on Africa

other support to the continent in return for improvements in governance. “There is increasing evidence that African governments are keeping the promises they made to the G8,” said Temitope W. Oshikoya, Director of the Development Research Department at the African Development Bank (ADB). “Now the other side must come through with their promises.” In terms of commercial linkages with the global economy, Africa still has a long way to go and the move towards creating bigger markets through regionalism and increased intra-African trade is moving slowly. Countries remain fragmented and inward looking, with limited progress towards the harmonization of operating requirements across borders. African countries have been urged to do more to add value to their resources. In turn, western nations need to address the tariff and non-tariff barriers to Africa’s exports in developed country markets. Africa's Trading Partners Trade shifting away from Europe

80%

Percentage of Africa's external trade

Africa's Vulnerability to Climate Change

China (incl. HK) Japan

60

US 40

EEC*

20

0 1990

2005

Other 27.6%

Other 31.7%

* EEC consists of Benelux countries, Denmark, France, Germany, Greece, Ireland, Italy, Portugal, Spain and UK

Source: IMF Direction of Trade Statistics

Climate Change In direct response to demand from members of the World Economic Forum’s Africa community, climate change was a key element of the 2007 programme in Cape Town. Africa will be the hardest-hit continent by global warming but it can play a stronger role in developing local strategies for adaptation and in shaping the international policy debate on mitigation. The past year has seen a proliferation of documentaries and academic reports on climate change and its effects – the strategy of this year’s meeting was to introduce some of the key findings of this research and, over three sessions in Cape Town, help leaders ask the right questions and develop a strategy for the way forward. The first session – one of the first of the meeting – was the Climate Change Update session. Discussion leaders included authors of the UN’s Intergovernmental Panel on Climate Change (IPCC) report, which declared Africa will be the worst hit by climate change in the future. Discussions ranged from the risks to agriculture from changing patterns of rainfall, to risks to infrastructure (and populations) in coastal areas, and the risk that global warming will encourage the spread of disease. A high-level private meeting held by the Disaster Risk Reduction Project of the World Economic Forum in collaboration with the World Bank and UN specifically sought to tap the expertise of the African private sector and to ask how adaptation could be improved through public and private action. In breakout groups, leaders brainstormed a potential private sector contribution in the areas of water and agriculture, health, and risk management. Finally, Nik Gowing of the BBC moderated a learning-by-doing WorkSpace session in which leaders were asked to “get a grip” and make a first draft of a coordinated response. This began with a group learning experience in which participants shared thoughts and advice with some of the world’s top experts on climate change and its impacts. Together they explored the urgency of the issue, building up an understanding of the impact of an increase in temperature on Africa, its people, communities and businesses. They continued their breakout discussions by looking at the most critical impact areas and where action can be taken to make the biggest difference. The facilitator then pushed participants to consider new ways to approach the challenge and urged them to take what they learned in Cape Town back to their communities and businesses, thus seizing the opportunity to make Africa a world leader in managing, mitigating and adapting to climate change. We hope that this is just the beginning, and look to Africa’s leaders to pioneer local partnerships and act internationally to help develop appropriate frameworks to reduce carbon emissions going forward, while sustaining economic growth and promoting global equity.

19 | World Economic Forum on Africa

A Competitive Future

But competitiveness, as defined by the Forum, does not involve merely competing for world market share for African products. According to the Report, if Africa is to compete, countries must put in place “institutions, policies and factors that set the sustainable current and medium-term levels of economic prosperity”. Over the course of this World Economic Forum on Africa, participants outlined several focus areas, including enhancing human capital, fostering energy innovation and integrating regionally, while increasing global demand for African products. Competitiveness of African Economies

Tunisia Morocco

Libya

Trevor Manuel, Minister of Finance of South Africa

Participants called on African public and private sector leaders to ensure that the gains of the previous years are re-invested in the continent’s most precious resource – its people. “The nature of our growth must ensure that everyone in our society is a stakeholder,” said Ngozi Okonjo-Iweala, Distinguished Fellow, Global Economy and Development, Brookings Institution, USA, and Minister of Finance and the Economy of Nigeria from 2003 to 2006. “Even if we reach 10% growth, issues such as unemployment and home-ownership will still be paramount.” Education and skills training are important, but the region will lose much of its talent unless quality employment opportunities exist at home. “The human condition does not allow people to live off of handouts,” said Trevor Manuel, Minister of Finance of South Africa. “People want jobs.”

Tunisia, South Africa and Mauritius are the continent’s most competitive economies

Algeria

“

The human condition does not allow people to live off of handouts. People want jobs.

“

While African countries represent only two out of the top 50 countries in The Global Competitiveness Report 2006-2007 of the World Economic Forum, they represent 20 out of the bottom 25. For the continent to sustain growth, which in 2006 topped 5.5%, it must raise the bar on competitiveness much further.

Egypt

Mauritania Mali Gambia

Burkina Faso

Chad Nigeria

Benin

Ethiopia Cameroon Uganda Kenya Burundi Tanzania Angola Zambia

Namibia

Mozambique Malawi

Zimbabwe

1st quartile

2nd quartile

3rd quartile

More competitive Less competitive

4th quartile

Lesotho South Africa

Source: World Economic Forum

20 | World Economic Forum on Africa

Mauritius Madagascar

Botswana

Competitiveness ranking among African nations

Also, as Africa grows, it will need more and more energy, in many cases drawing on the same resources that are increasingly demanded by the developed world. For some, the answer lies, at least in part, in traditional hydrocarbon reserves: “You cannot develop a continent without energy,” said Abdoulaye Wade, President of Senegal. “Africa needs to take part in the oil business.”

L’Afrique: C’est Chic! Africa has provided some of the world’s most recognizable models, but can the continent provide the designer clothes to match its successes in modelling? Participants were left in no doubt after a fashion show featuring some of the region’s hottest designs. Robert Polet, President and Chief Executive Officer, Gucci Group, Netherlands, advised that fashion is a business and, as such, designers should constantly be looking for new ways to seduce the customer into buying new products. The fashion industry needs to be more competitive, stressed Precious Moloi Motsepe, Chairperson, African Fashion International, South Africa. She said African designs need to be promoted as more than a passing fad. The secret lies in finding the elusive niche market, according to Lynne Brown, Minister of Finance, Economic Development and Tourism of the Western Cape Provincial Government, South Africa.

Demand for power generation could grow at a compound rate of 3.18% through 2030, versus 2.01% for the world

Africa power generation demand (Mtoe)

300

250

Other renewables Nuclear Oil Hydro

200

Biomass and waste

“

“

Africa's Power Generation Needs Growing

The nature of our growth must ensure that everyone in our society is a stakeholder. Ngozi Okonjo-Iweala, Distinguished Fellow, Global Economy and Development, Brookings Institution, USA

Coal

150

100 Gas 50

0 1990

2004

2015

2030

Source: IEA World Energy Outlook 2006

Alternative sources of energy also hold promise – and pose challenges. Participants debated the viability of biofuels, both as a means to power Africa’s development and as a product for sale on the global market. Experts such as Hartmut Reinke, Director, Eastern and Central Europe, Middle East and Africa, DuPont de Nemours International, Switzerland, said that fuel from biomass could be complementary to hydrocarbon resources in satisfying demand in the transportation sector. But he and others cautioned that the technology is still so new that it would not be an appreciable export for Africa in the near future.

Such integration will not happen overnight. A. Michael Spence, Professor Emeritus, Stanford University, USA, a Nobel laureate in economics, cautioned that European integration had taken 50 years – and Europeans still have many problems to solve. For example, flexible labour markets look good on paper, but xenophobia can dampen the competitive climate – as it threatens to do in South Africa. Africans also need to look outward in order to grow their economies by increasing demands for their products. Following on discussions in 2006 at the World Economic Forum on Africa regarding “Brand Africa”, participants discussed ways to promote African fashion designers and the African fashion industry in general. Fashion is a business, said Robert Polet, President and Chief Executive Officer, Gucci Group, Netherlands, and designers should look for ways to seduce consumers by creating trends.

Finally, for African nations to move up competitiveness indices, they must not only look inward, but beyond borders across the continent and overseas. Regional integration emerged as a hot topic among participants. Many lamented the fact that it is often more expensive to fly or talk on a mobile phone to another point within Africa than to Europe or America. Tariffs, monopolies and corruption all stand in the way of a fully developed regional market.

21 | World Economic Forum on Africa

Pathways to Prosperity

“

“

I can talk of hope more than success stories. Armando Emilio Guebuza, President of Mozambique

Most Africans see a bright future when they look ahead. According to a recent Gallup International Voice of the People poll, some 55% think the next generation will be more prosperous than their own. But as the economic fabric of the continent changes – most dramatically through urbanization – governments, businesses and civil society need to partner in order to make reality match aspiration. Specifically, stakeholders must innovate in the areas of technology, healthcare and political liberalization. Guided or not, African development is happening. Within two decades, more than half of the population will be urban; on average, African cities are growing faster than cities in any other part of the world. The challenge, said Cameron Sinclair, Founder, Architecture for Humanity, South Africa, is to seize the potential of the burgeoning urban population for the betterment of African societies as a whole. African Urbanization Africans increasingly moving to cities 70% 60 50 40 30

Percentage of world population living in cities

20

Percentage of African population living in cities

10

Africa’s share of world population

0 1950

1975

2000

Source: United Nations

22 | World Economic Forum on Africa

2025

One step towards unlocking the potential of the new city dwellers is to develop new mobile technologies that allow them to more fully participate in the market by increasing their access to financial services. “The mobile phone is one of the most powerful inventions of modern times,” said Caleb M. Fundanga, Governor of the Bank of Zambia. Already, one new technology, known as “m-banking”, a system of money transfers via mobile phones, is proving commercially viable, as well as socially beneficial. “Our mobile phone-based money transfer system, launched in Kenya in March, has seen more than 110,000 customer registrations in 12 weeks,” explained Susie Lonie, Senior Manager, Mobile Payments, Vodafone Group Services, United Kingdom. In a country like Kenya, where more than three times as many people have mobile phones as have bank accounts, such technology facilitates everything from microfinance payments to remittances to rural relatives – and helps grow an entrepreneurial culture. But new technologies also require greater access to electricity. Participants discussed the potential of an “electranet”, a system by which small-scale generators can sell to the large power grid. If it works, said John Chiahemen, Editor, Africa, Reuters, South Africa, it could do to the power sector what mobile phones did for the communications sector. In general, however, participants felt that there is no silver bullet to Africa’s electricity deficit, and that central generation and local generation are needed simultaneously. For Africa to stay on the path to prosperity, Africans must also have improved access to healthcare. In many cases, the political will and public awareness of health threats are present, but the health infrastructure is lagging. Participants agreed that government, civil society and business have an equally vital interest in

“

Cynthia Carroll, Chief Executive, Anglo American, United Kingdom; Co-Chair of the World Economic Forum on Africa

fighting HIV/AIDS and tuberculosis. Participants also called for scaled-up partnerships to combat malaria and tuberculosis. Infectious Diseases Still a Major Cause of Death in Africa

“

We need a debate in Africa about governance. We measure everything – why not governance?

“

“

In Africa, there’s been tremendous movement towards democracy. And that’s attracting foreign direct investment and providing for further growth.

Mo Ibrahim, Chairman, Mo Ibrahim Foundation; Chairman, Celtel International, United Kingdom

Finally, participants agreed on the necessity to consolidate gains and move towards prosperity by ensuring public ownership of government. At the moment, there are only eight democracies in subSaharan Africa, and several of those are considerably flawed. “We need a debate in Africa about governance,” said Mo Ibrahim, Chairman, Mo Ibrahim Foundation, as well as Chairman, Celtel International, United Kingdom. “We measure everything – why not governance?”

35%

Percentage of all deaths

30

TB

25

Malaria

20 15 HIV/AIDS

10 5 0 Total World

Total Africa

Sub-Saharan Africa

Source: World Health Organization

The need for new ways of delivering health services is desperate in many parts of Africa. “I can talk of hope more than success stories,” said Armando Emilio Guebuza, President of Mozambique. Specific strategies for combating malaria include improving communication between health authorities and outreach workers, distributing mosquito nets throughout affected areas and improving treatments. All agreed on the desperate need to support research into finding vaccines for both malaria and HIV.

Participants pointed to rampant corruption throughout governments in the region and lamented a lack of freedom of expression in many countries. But there were several instances of hope. Though he has battled censorship often, Editorial Cartoonist Zapiro, Zaprock Productions, South Africa, personified the potential for free speech in Africa when he showcased his most controversial cartoons in front of many of the region’s leaders in a WorkSpace session. “In Africa there’s been tremendous movement towards democracy,” concluded Cynthia Carroll, Chief Executive, Anglo American, United Kingdom, and a Co-Chair of the World Economic Forum on Africa. “And that’s attracting foreign direct investment and providing for further growth.”

23 | World Economic Forum on Africa

Raising the Bar in

WorkSpace Is it hot in here or is it me?

The WorkSpace – the workshop with a difference – draws out the collective intellect and creative capabilities of participants to explore concrete opportunities for improving the state of the world.

“

Participants of the series of four WorkSpace sessions at this year’s World Economic Forum on Africa came together to explore ways to tackle some of the continent’s most critical issues: How can taboos that restrict development be dealt with? What is Africa’s role in addressing climate change? How can African countries work together to become more competitive on a global scale? How can technology be used to improve the quality of education?

“

There is an elephant in the room.

“

“

Corruption, or more precisely the hypocrisy it can generate, was raised by almost all groups as a significant taboo slowing down Africa’s development. The teams proposed better legislation and a strong legal system, as well as new processes to Legislation goes down improve transparency, as solutions. However, the path of participants also discussed suppression. Don’t be the importance of freedom afraid, try to get of speech and the limitations of the law in different parts of eliminating taboos. In society to talk about addition, they suggested the issue. On all that existing awareness taboos: freedom of campaigns need to be expression, freedom of strengthened, particularly for the extractive industries, expression, freedom of with campaigns such as expression. “publish what you pay”. The group’s closing conversation revealed the deep concern participants share of the impact of ignoring taboos, while also expressing a renewed hope of surmounting them.

24 | World Economic Forum on Africa

“

“

Among the highlights of the WorkSpace was the candid conversation on taboos and their role in hindering Africa’s prosperity. Leaders from across sectors and industries came together to address and solve the mystery of the unspoken in the interactive session, “A Taboo on Taboos”. The group was first greeted by Zapiro, Editorial Cartoonist, Zaprock Productions, South Africa, and his work on some of the region’s most controversial taboos, including restrictions on freedom of speech by religious groups, as well as HIV/AIDS. Participants worked in teams to consider the ways these and other taboos can be addressed, hanging their ideas on the WorkSpace’s life-size elephant model to symbolically draw attention to “the elephant in the room”.

Building on the growing Africa is hardest hit awareness of the by climate change continent’s vulnerability to climate change, the because of its high WorkSpace session, vulnerability and “Getting a Grip: Designing low capacity. Africa’s Response to Climate Change”, provided the platform for a critical discussion on leaders’ ideas for action. The workshop began with a learning journey, in which participants shared thoughts with some of the world’s top experts on areas affected by climate change: security and migration, water and agriculture, health, and coastal areas and In other areas there’s infrastructure. Together they explored the a sense that climate urgency of the issue, change implications building up their are in the future, and understanding of the impact of an increase in Africa it’s now. in temperature on Africa. They continued their breakout discussions by looking at the most critical impact areas and where action can be taken to make the biggest difference. The facilitator pushed participants to consider new ways to approach the challenge, drawing out potential actions for changing behaviours, improving policy frameworks, encouraging smarter investments and optimizing risk management. Participants concluded that there is less of a need for awareness-raising around the issue than for an increase in the capacity of people to adapt, suggesting the pursuit of If we frame climate “pragmatism, not change as a business, hysteria” to address we can change the the sense of powerless across the climate for business. continent. The group also mentioned the importance of regional and multistakeholder cooperation, as well as the urgent need for strong economic incentives that engage businesses for positive results.

“

“

the

High tech for high quality education

“

“

In the interactive workshop, “Delivering on Education through Technology”, leaders from business and the Education applies to education sector engaged in all people, not just an exercise designed to encourage new thinking on children, but also ways to improve the quality of farmers, parents, education in the rural areas of leaders, everyone. Africa by using innovations in technology. In smaller groups, participants were presented a scenario projecting them to the year 2012, a time when there has been a significant improvement in the quality of education in African villages. The specific challenge posed to the teams was to determine how they had achieved that transformation. They were asked to outline the business plan for a project involving new technology that had brought about the improvement. Led by the facilitator, the group identified the success factors that drove the educational transformation of Africa through technological innovations, a conversation that sparked real interest in actions that can be taken today to reach such a future. They emphasized the underlying need for community buy-in and for solutions that are adapted to the capacity of users and educators. Participants also agreed that the characteristics of the technological tools themselves have to be designed to meet the local Our ideas today could needs and lead to something very environment, such as the very low positive for technology power in education. requirements and the ability to download new content via wireless phone networks. The session closed with a display of several new and available technologies precisely aimed at increasing the quality of education in rural locations, suggesting that the scenario of the exercise may not be so far from reality.

“

“

“

Following the release of The Africa Competitiveness Report 2007, business leaders and policy-makers taking part in the workshop, “Raising the Bar on Competitiveness in Africa”, explored how to work together to boost productivity and competitiveness across the continent. To encourage fresh ideas and thoughts on multistakeholder collaborations, participants were asked to picture a future in which their country has made significant progress on competitiveness. Following their When you try to make dynamic breakout a quantum shift, you discussions, have to ask: are we participants came together for a being radical enough? conversation on the areas that need urgent attention in order to facilitate such development, mentioning skills training, health policies with a focus on HIV/AIDS, and stronger democratic institutions and processes, among other points. The groups’ key recommendations were scribed in a matrix that highlighted threads and missing links, giving participants the unique chance to explore outside their usual scope and consider innovative ideas.

“

“

We must give full recognition to our success – we shouldn’t undermine ourselves. However, there are issues we need to work on.

“

It is 2022 and your country has climbed 50 places up the Global Competitiveness Index ranking ...

Acknowledgements

The World Economic Forum wishes to recognize the support of the following companies as Partners or Supporters for the World Economic Forum on Africa: Strategic Partners ABB Alcan AMD Audi Barclays Citi DuPont Goldman Sachs HP Intel JPMorgan Chase KPMG Merck & Co.

Regional Partners Absa African Rainbow Minerals (ARM) Eskom Murray & Roberts Nigerian National Petroleum Corporation (NNPC) SABMiller Sasol

Meeting Supporters CNBC Africa International Finance Corporation (IFC) Magna Carta

Service Providers Telkom Transnet

The World Economic Forum also thanks CNBC Africa as host broadcaster, and City Year for its support.

26 | World Economic Forum on Africa

Contributors

Peter Torreele is Managing Director of the World Economic Forum. Haiko Alfeld is Director, Head of Africa, at the Forum. The World Economic Forum on Africa was under his direct responsibility, with Yemi Babington-Ashaye, Associate Director, Global Leadership Fellow, Africa, and Stéphane Oertel, Global Leadership Fellow, Africa. Nadine Bonard, Senior Specialist, Events, was the meeting Coordinator. Samantha Tonkin, Senior Media Manager at the World Economic Forum, worked with Alejandro Reyes, Dianna Games and Benjamin Skinner 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 at www.weforum.org/africa/summaries2007 Editing: Fabienne Stassen Fleming, Senior Editor, and Janet Hill, Editor Design and Layout: Kamal Kimaoui, Associate Principal, Production and Design Photographs: Eric Miller and Matthew Jordaan The World Economic Forum would like to recognize the support of PricewaterhouseCoopers in compiling data and statistics for this report.

27 | World Economic Forum on Africa

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. (www.weforum.org)