Africa must adapt to new business models

Tuesday September 10 2019

An illustration of the Fourth Industrial

An illustration of the Fourth Industrial Revolution. The Fourth Industrial Revolution which represents a fundamental change in the way we live, work and relate to one another 

By Martin Luther Oketch

With elections taking place in more than 20 African countries in 2019, the world’s youngest continent is facing a new era. While significant political and economic progress has been made, the continent continues facing significant challenges as a result of technological advances. Such advances are merging the physical, digital and biological worlds in ways that create both huge promise and potential threats.
The 28th World Economic Forum on Africa, which took place from September 4th to 6th, in Cape Town South Africa, saw international World renowned chief executives, President, heads of international institutions, economists and researchers among other speakers tackle key issues affecting the continent. They focused on how to scale up the transformation of regional architecture related to smart institutions, investment, integration, industry and innovation to make Africa a great continent.
Under the theme, ‘Shaping Inclusive Growth and Shared Futures in the Fourth Industrial Revolution,’ the meeting addressed the African Union’s Agenda 2063 regional strategic priorities under four programme tracks:
Innovation: Readiness for the Fourth Industrial Revolution, Cooperation: Sustainable Development & Environmental Stewardship, Growth: Digitalization & Competitive Industries, Stability: Leadership & Institutional Governance.
Dr Klaus Schwab, founder and executive chairman of the World Economic Forum, said the rapid pace of technology requires renewed frameworks for cooperation to be developed to deliver an inclusive and sustainable future for Africa.
“Africa cannot afford to be left behind. The Fourth Industrial Revolution can solve many of the issues that came with the first, second and third industrial revolutions. It is a catalyst for Africa to leapfrog into the 21st Century,” said Dr Schwab.
In his closing remarks of the Economic Forum on Africa 2019, the Co-Chair of the World Economic Forum on Africa, Mr Arancha Gonzalez Laya told participants that Africa has a recipe for sustainable growth, following this year’s agreement on a ground-breaking trade deal that promises to soften borders across the continent.
Mr Arancha said while big challenges remain to translate the promise of the Africa Continental Free Trade Area (AfCFTA) into jobs and economic growth on the ground, there is a palpable sense of hope that the components for success are now in place.
“I like to think of this CFTA as the most delicious African dish that can be produced,” said Mr Arancha who is the executive director of the International Trade Centre.
“The ingredients have been assembled, the cooks are in the kitchen.
The guests are impatiently waiting for this dish to be served,” he said.
Mr Arancha explained that the “dish” is vital for the 200 million young Africans aged 15 to 24 who need to see the continent move up a gear to a higher level of economic growth if they are to secure jobs and contribute to their countries’ prosperity as the workers of the future.

Fourth Industrial Revolution.
Speaker after speaker highlighted what Africa needs to do to prepare for the Fourth Industrial Revolution.
Mr Sipho Pityana, chairman of AngloGold Ashanti, said the free trade deal is a “catalyst”. However, it is now up to political and business leaders to implement the removal of trade barriers and ensure sufficient investment in infrastructure and logistics to truly accelerate cross-border trade flows.
“We need to soften our borders to enable easy movement. We need leadership that is capable and has the determination to act collaboratively,” he said.

Opportunities
The World Economic Forum officials were upbeat that for investors, this is a critical moment – and also a testing time for the claim made by South African President Cyril Ramaphosa at the meeting that this will be “Africa’s century”.
Mr Cyril M. Ramaphosa, President of South Africa, in remarks read on his behalf by finance minister Tito Mboweni, said Africa, along with the rest of the world, is dealing with the same question: How to harness the potential of the Fourth Industrial Revolution in pursuit of development and economic growth. But all this must be done in such a way that “as we take this quantum leap into the future, we do not leave societies’ most marginalised behind.”
Africa must quickly adapt to these new trends.
“Disruptive trends and technologies are changing the way we live, the way we work and do business, and the way we govern. We must respond with agility to craft a roadmap for navigating this new environment. We must ensure that our citizens are prepared and if necessary, that they are shielded from any adverse consequences. Our response must be collaborative, multi-sectoral and inclusive,” said Mr Ramaphosa.
Ramaphosa said South Africa is not only working with her neighbours to develop a continental strategy led by the African Telecommunications Union, but it has also established a Presidential Commission on the Fourth Industrial Revolution to position the country as a competitive global player in this new space.
Responding to a question about the African Continental Free Trade Area, Mboweni said if Africa wants the free movement of goods, it also needs to ensure the free movement of people.
“If free movement is supposed to happen, one cannot be in a position where you allow this person and not the other,” he said.

President Yoweri Museveni addresses delegates

President Yoweri Museveni addresses delegates during the World Economic Forum in Cape Town, South Africa, last week. courtesy PHOTO


Mr Mboweni was standing in for Cyril Ramaphosa, President of South Africa, who was at Parliament to address protestors demanding action from the government on violence against women.
Dr Elsie Kanza, head of Africa at the World Economic Forum, said addressing systemic violence against women is a top priority for the meeting and she urged all leaders to act against the problem.
On the Fourth Industrial Revolution, which was the key top, Dr Kaza said governments in the region should ensure that economic growth is sustainable and inclusive.
“Africa has a very young and a rapidly growing population which requires that there are employment opportunities. We should ensure that African governments move fast towards the digital economy,” she advised.
“I view Africa as a large-scale start-up, just as East Asia was in the early 1990s,” said Mr Alex Liu, managing partner and chairman of A.T. Kearney.
He argued that the continent could leapfrog ahead in certain areas, just as it has already done in mobile payments. Including the whole of society will be crucial to delivering sustainable success, given the rapid pace of change in the workplace and the disruptive effects of new technologies with the arrival of the Fourth Industrial Revolution.
Deputy CEO and CEO Absa regional operations Peter Matlare said the Fourth Industrial Revolution is comprised of high returns in economic activities (investments).
“The things that will drive Africa into the Fourth Industrial revolution are manufacturing, technology for digitalisation of processes for efficiency. Digital economies deliver greater and significant returns. However, we Africa are not the Fourth Industrial revolution yet, we are in the process,” he said.
President Yoweri Museveni said there is need to increase prosperity/investment in Africa because it will help solve conflicts.
“Prosperity comes business by selling goods, you can be producing similar goods with your neighbours or tribes. But people buying your products may be coming from somewhere else because business knows no religion or tribe,” he said.
Mr Museveni explained that to understand the causes of conflicts is based on two perspectives: Just wars and the unjust wars.
“If you are involved in unjust wars then you are an enemy of prosperity and progress,” he said.
Dr Jeremy Farra the director, Wellcome Trust - a global charitable foundation dedicated to improving human health, said Africa’s left-behind youth and discriminated-against women have already made clear they are not prepared to tolerate the status quo.
“If we don’t bring society with us then we will end up with similar tensions that the first, second and third industrial revolutions had,” Farrar said.

Partnerships key in Fourth Industrial Revolution

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With Africa’s rich natural heritage, which experts believes is another great opportunity for Africa’s development, Mr André Hoffmann, Vice-Chairman of Roche, said it must be cherished because it is an opportunity for development.
“Nature is not something that stops you from developing but it is an opportunity. In fact it is a $1 trillion opportunity for investment,” he said.
Amina Mohammed, Deputy Secretary-General of the United Nations, said leaders at all levels, not just at the political level, must “dig deep to bring back social cohesion.
“We need to look at what binds us and not what separates us,” he said.
Speaking on the issue of the Fourth Industrial Revolution, Mohammed said while advances in technology are exciting, “the picture has shadows as well as light.”
Mohammed said technology is moving faster than the world’s ability to manage its impact. This is adding to the uncertainty of a world already unsettled by challenges such as climate change.
“If governments cannot proactively manage the impacts, it will make our growth less inclusive with severe security implications. Partnerships will be critical in addressing the challenges emerging from this new world,” he said.
Cash on delivery remains popular in Africa, making cross-border e-commerce difficult. Also, policies are often not adapted to complex payment supply chains, meaning Africa’s merchants have fewer options to connect their local e-payments systems with services used by global customers.

Outcomes

Reflecting on the challenges and opportunities of the region, the meeting produced notable outcomes:
• The Africa Growth Platform was launched to help start-up businesses access finance, advice and better regulatory conditions. Founding partners are Alibaba Group, A.T. Kearney, Dalberg Group, Export Trading Group, US African Development Foundation and Zenith Bank.
• The African Risk Resilience Platform was initiated. It will combine private-sector resources with those of governments to help countries prepare for climate- and disease-related disasters.
• The World Economic Forum teamed up with the International Trade Centre to kick off an E-Commerce Action Agenda. The initiative is aimed at promoting cross-border data services in Africa, an industry that could create three million jobs across the region by 2025.
• The African Union, in partnership with the World Economic Forum, launched a new foundation paving the way for the private sector to help build capacity and resources to strengthen health security across the continent.
• The World Bank and the Forum teamed up with African governments to launch an innovation challenge aimed at finding new ways of using drones across Africa. The competition, supported by the United Kingdom’s Department for International Development, is a precursor to the Africa Drone Forum, which will be held for the first time in 2020 in Rwanda.
• Five private sector partners announced $23 million in new pledges for the Global Fund’s Sixth Replenishment. Donors include Goodbye Malaria, Project Last Mile, GBCHealth, Zenysis Technologies and Africa Health Business.

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