SSACC was happy to partner with DI in their annual DI Africa conference for a second time. Whilst last year’s conference was critiqued for its overselling of the “Africa Rising” narrative, this year presented a more balanced conference, with specific concentration on the experiences of Swedish companies, small and large, operating in the various regions on the continent. The recurring theme of the day from the experience of the Swedish companies and experts was: Challenges equal opportunity!
Approximately 150 Swedish business leaders and industry stakeholders participated in the conference. The SSACC stand was popular and well received, with a lot of questions on who we are and how we can assist Swedish businesses interested in the SADC market. SSACC also played host to two of our partners from the SADC region, the Mozambique Chamber of Commerce (MCC) and Pangaea Securities from Zambia. The vice president of MCC, Mr Arlindo Duarte and Ms. Tidale Mwale of Pangaea Securities made a join presentation with SSACC President Åsa Jarskog on Doing Business in SADC with specific examples of Mozambique and Zambia.
Overview of discussions at the Conference
The perception of Africa is changing because the realities have changed. Africa has experienced rapid growth of the service sector and the middle class. The continent is joining the global trend of the 4th industrial revolution and essentially leapfrogging from agrarian economies to service economies. These rapid changes have created challenges, more specifically in: IT infrastructure (soft and hard), Financial Institutions, Energy Infrastructure and more recently, Cyber Securities.
In addition to the fore-mentioned sectors, and despite the growing services sector, agriculture remains a very important sector for many economies. We heard about the huge need for agriculture development in Mozambique for instance, one of the SADC countries highlighted during the conference. Only 20% of its fertile land is utilizes, leaving 70% uncultivated and imports 50% of its food needs. Mr. Arlindo Duarte, Director of Intermetal SA and Vice President of MCC argued the case for investment in Agro-processing, as currently, there are no companies in Mozambique doing large scale food processing. Ms. Tidale Mwale, Senior Broker and Trader at Pangaea Securities reiterated the same needs for Zambia, more especially as “the copper industry has overshadowed other industries, Zambia is trying to tell a new story – not of copper, but of the potentials in other sectors such as Agriculture and Manufacturing.”
The Zambia case is not unique; many SADC countries have depended heavily on natural resources, an extremely volatile industry. Therefore the general strategy across the region is to diversify economies, develop value addition supply chains and develop strong manufacturing sectors that can engage on a global scale, which has lead to SADC’s new long term Strategy for Industrialization.
Throughout the day we heard from the Swedish Ministry of Foreign Affairs Africa Department and various Swedish Companies of the importance to not assume homogeneity in doing business across the continent. As Anna Selander, Head of Consumer Lab at Ericsson, quoted Hans Rosling “It´s time to stop talking about Africa as one place!” Data between the different countries accurately shows the difference between countries “we need to be humble enough, that every country must be viewed by experience”.
– Click HERE for Ericsson Consumer Lab Report –
Case in point, when looking at the IT/Telecommunications sectors for Mozambique and Zambia, they have different challenges and therefore different opportunities. In Mozambique, 8 of 10 people use 2 to 3 different mobile operators – therefore the opportunity here lies within quality, reliability and infrastructure upgrade. Zambia on the other hand does not have the same efficiency challenges; instead, in Zambia the pressing issue is within financial inclusion. The single most challenging factor for doing business in Zambia is access to capital and access to financial services. This presents the opportunity within mobile banking, which is still very low compared to their east African counterparts.
GO THERE – Do not do table top research, go there! Advised Mr. Tobias Becker, Head of Africa Program, ABB, who have engineering and sales offices in 9 out of the 15 SADC countries. Do not concentrate too much on the ‘gateway’ countries e.g. South Africa, Nigeria and Kenya. There are 54 countries, do not put all risk in 1 or 2 countries, depending on the sector and the size of the company, the opportunities may be greater in other countries as opposed to the “gateway” countries.
Sustainability: you have to be sustainable and find sustainable local partners and together build constructive and innovative partnerships – very important, more so as Africa’s population is young, a growing well-educated population with strong regards to social infrastructure.
One must be innovative in identifying opportunities – as BIMA did in West Africa – they saw statistics that showed 70% mobile penetration, but only 2% insurance penetration ratio and identified the distribution gap as a business opportunity.
Even though 2015/16 saw drops in growth rates across Africa, more specifically for oil exporting countries, the long run perspective of strong economic growth remains. The lack of investment in Africa by Swedish business is not only due to risk aversion, but also to some extent denial. As Thomas Becker candidly stated “You can not run around with a Louis Vuitton bag for the rest of your life!” – Using the rapidly growing creative and fashion industry on the continent as proof that the continent is the place to be.