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Fuqua Takes On Business in Africa
April 05, 2013
In 1994, 70% of Africans never heard a phone ring explained Arthur Mutambara, Deputy Prime Minister of Zimbabwe, to the audience at The Fuqua Business in Africa Conference on March 20. He went on to note that by 2012, 70% can access telecoms. There is significant business and development opportunities in Africa, and The Fuqua Business in Africa Conference enabled the Duke community to learn from some of Africa's business and government leaders.
In addition to Mutambara, other speakers included Jordan Levy, Managing Director of the Ubuntu Education Fund; Brenda Madumise, Chairwoman of National Home Builders Registration Council (NHBRC); and Todd Neuman, Head of South African Airways in North America, among others.
Martin Ganda (Daytime MBA '14) one of the student organizers, shared his thoughts on the importance of the African economy and provided an MBA's perspective on opportunities within the continent in the following Q & A.
What is the biggest misconception about Africa and business in Africa?
The biggest misconception about Africa is that it is a dark, war-ravaged continent consumed by poverty and corruption. For many people who have never been there, the word 'Africa' raises thoughts of starving children or the AIDS epidemic. While some parts of Africa may have these qualities, Africa as a whole is a beautiful continent with hardworking people.
From a business perspective, Africa is seen as corrupt and high-risk. This is no longer the case. The African countries have booming economies, and governance has improved tremendously.
What strengths and opportunities does Africa bring to the global economy?
Africa is blessed with huge reserves of natural resources such as oil, gold, platinum, copper and coal. The population is heavily skewed toward the younger generation (about 65% of Africans are under the age of 35), which provides a huge labor pool for any industry looking to set up business in Africa. The growing middle class provides a consumer market for goods and services. Global giants such as GE, Walmart and IBM are making huge strides towards leveraging this up and coming market.
What challenges do businesses face in Africa?
Lack of financing is a key issue for most African businesses. Businesses do not have the resources to finance their needs or take advantage of opportunities. The financing that is available can have unfavorable conditions, such as high interest rates. Secondly, limited infrastructure across Africa makes it difficult or expensive to access some areas. For instance, people used to travel via Paris to get from Lagos (Nigeria) to Abidjan (Ivory Coast), a 250-mile distance. In the hands of a smart investor, however, these challenges can be seen as opportunities. Thirdly, Africa faces limited expertise in certain fields. Although many young Africans have been educated elsewhere and returned home, we are still lacking in experienced human capital.
What is the biggest area of opportunity for business in Africa?
There are numerous opportunities. The three key areas of opportunity for Africa lie in natural resources, agriculture, and the burgeoning middle class, which is providing a new consumer demand for financial services (banking, mortgages), mobile telephony and retail services. Higher education and technology also present some other pivotal opportunities to propel Africa to prosperity.
How have you been able to help your classmates understand the business context in Africa? And how have you been able to learn from your international classmates about global business and how Africa connects to it?
As part of the Business in Africa Club at Fuqua, we host monthly events to educate our classmates about economic development and opportunities in Africa. We also host the annual Duke University Business in Africa Conference, which provides a unique opportunity for students and professionals to learn from an illustrious lineup of speakers from Africa's public, private and social sectors. The conference presents an opportunity for our classmates and faculty to engage in discussions and networking opportunities with Africa's top policy makers, business leaders and investors defining Africa's future. Students enjoy quality discussions and thought leadership on the latest opportunities and challenges across the African continent.
It has been truly fantastic learning from my international classmates; most of them have dealt with Africa in their previous roles before coming to business school. It is also exciting to see some classes with case studies on business in Africa.
What do you wish people knew about Africa?
There has never been a more exciting time than now for business in Africa. Africa is the hottest investment market. African economic growth has averaged 4-5% over the last 12 years. Seven out of ten of the world's fastest growing economies are in Africa. Economic growth is expected to continue based on strong commodity prices, the rising middle class and improved governance across the continent. Instead of treating Africa as a charity case in dire need of aid, let's consider Africa as a business partner to the whole world.