Friday, 11 December 2020
Engaging with Africa: The next economic powerhouse?
With a population of more than 1.3 billion people, Africa is home to seven of the top 10 fastest-growing economies in the world, according to IMF data. Effective engagement with this diverse continent is becoming a commercial imperative for businesses around the world, argue Professor David Park and Dr Judy Muthuri, of Nottingham University Business School – which recently updated its Africa Strategy to focus more effectively on identifying and addressing opportunities and challenges on the continent for both its students and external business partners.
Lagos is predicted to be the world’s largest megacity by 2030
The University of Nottingham’s vision is to be a university without borders, where we embrace the opportunities presented by a changing world and where ambitious people, and a creative culture, will enable us to change the world for the better.
High-level goals to help realise this vision include cultivating a global mindset, contributing to the UN’s Sustainable Development Goals, solving problems and improving lives.
The continent of Africa provides plenty of opportunities to make a measurable difference against these goals and our Business School’s Africa Strategy includes the key themes of supporting ethical and responsible business practices, non-degree training and education for executives, and enhancing commercial opportunities for those in our region.
We firmly believe that while development organisations are looking for solutions to alleviate widespread poverty, the private sector absolutely has a role to play in alleviating poverty through market-based solutions, as well as partnering and collaborating with both state and non-state actors to contribute to the sustainable development of local communities in Africa.
Applying the Base of the Pyramid concept
The key business concept that underpins our thinking and activities in this space is the Base of the Pyramid (BOP) concept. It was first referenced by Franklin D Roosevelt in April 1932, a year before he became president, when he spoke about “The forgotten, the unorganised but indispensable units of economic power … the forgotten man at the bottom of the economic pyramid”.
The main thesis of the BOP concept is that poverty can be eradicated through market transactions by an external commercial organisation “that either sells goods to, or sources products from, those at the base of the pyramid in a way that helps to improve the standard of living of the poor”.
Since 2007, the BOP concept has been researched widely with an increasing body of literature from diverse disciplinary fields including marketing, strategy, international business, general management, development studies and information technology.
The concept has also been adopted by for-profit enterprises, government bodies and not-for-profit organisations.
Over the past 15 years, in particular, a variety of organisations have continued to refine the BOP concept and the key question at the moment is how the ideas and principles can support a greater conceptual shift, away from singular solutions of poverty alleviation to understanding how wider innovation ecosystems and engagement through cross-sector partnership networks can be developed.
East Midlands commercial opportunities and challenges in Africa
This creation of an entire ecosystem is, potentially, one key area where the membership of the Chamber could, together, make a real difference through the likes of technology suppliers, financiers, capacity builders, supply chain players, open innovation expertise, distributors to the last mile and cross-sector partnerships.
This is a challenge that we embrace as a business school and we invite every Chamber member organisation to join us on this journey to create a wide, deep value proposition to engage the poor, and to help create the ecosystem to deliver it.
Dr Judy Muthuri and Prof David Park
The Financial Times and The Economist have recently defined Africa as “rising”, a far cry from the “hopeless continent” headlines from the turn of the 21st century. Opportunities will abound increasingly in Africa for businesses and organisations of all sizes across our region. However, there are also a number of very real challenges that can directly impact both strategic and day-to-day activities for those looking to increase their engagement with Africa.
Economic activity in Africa is expected to grow remarkably in the coming decade with the successful implementation of the African Continental Free Trade Agreement (AfCFTA), which connects 55 countries with a combined GDP of $3.4tn. The World Bank predicts that AfCFTA will have a number of effects on global trade and supply chains, including an increase in Africa’s exports by $560bn, mostly in manufacturing. African countries are also increasing their presence in international affairs and global markets.
One of Nottingham University Business School’s key Africa-related goals in 2021 is to critically assess both the opportunities and the risks that organisations in the East Midlands face with respect to their potential engagement with African countries. We will also be seeking to learn and make use of lessons from our historical engagement with China, a part of the world that also used to be considered a “sleeping economic giant” and is now anything but.
We are passionate believers in the power to change lives through business. We look forward to strengthening and deepening our relationships with organisations across the East Midlands that not only feel the same but are excited by the potential opportunities yet to be realised by effectively partnering, in the right way, with the people and organisations in Africa, the next economic powerhouse.
Dr Judy Muthuri explores the Base of the Pyramid concept in a recently-published book on the subject, titled Base of the Pyramid Markets in Africa: Innovation and Challenges to Sustainability.
To discuss commercial opportunities in Africa with Nottingham University Business School, email email@example.com.
Africa by Numbers
The culturally diverse population on the continent of Africa. Consisting of mostly young people, this is projected to double by 2050.
The estimated combined population of Lagos (Nigeria), Kinshasa (DR Congo) and Dar Es Salaam (Tanzania) by 2100, when they are predicted to become the world’s three largest cities. The Global Cities Institute believes Africa will be home to 13 of the world’s largest megacities by this time.
The proportion of Africa’s population still living in extreme poverty. Despite being endowed with rich resources, it remains volatile and faces myriad problems, also including corruption and inadequate infrastructure.
Trade and investment with key markets in Africa
Nottingham University Business School has recently been appointed as the exclusive executive education partner with Africa House.
Based in London, the trade agency encourages direct investment and trade with key markets in Africa and promotes sustainable job creation opportunities, growth and long-term prosperity for African and UK businesses.
The partnership went live in November with long-term goals of immediate relevance to organisations across the East Midlands, including:
Encouraging trade, commerce and investment between the UK and a specific set of Sub-Saharan African high-growth markets
Providing resources and commercial partners to support growth companies either moving into Africa for the first time or expanding their footprint in Africa, in order to assist in managing challenges, risks, and infrastructure requirements
Facilitating relationships between buyers, suppliers and distributors with the purpose of increasing trade, commerce and investment throughout Africa and the UK
Increasing UK-Africa bilateral trade to ensure stability and prosperity for the UK and Africa in a post-Brexit landscape
For more information, visit www.africahouselondon.com.
Entrepreneurially solving Africa’s water crisis?
Tabitha Wacera, left, with receiving the Vice-Chancellor's Impact Scholarship from Shearer West, vice-chancellor at the University of Nottingham
Growing up in Kenya, Tabitha Wacera walked miles in search of water, carrying hundreds of litres on her back for hours at a time. Today, her start-up company Sustainable Water, based at the University of Nottingham’s Ingenuity Building, is already water for thousands of people in off-grid communities in Africa. Having walked the water walk, Tabitha is on a mission to solve the water crisis once and for all.
“When you see a water aid campaign, it often features a girl or a woman walking a long distance in search of water, often at the expense of her education or her future,” says Tabitha, a 2016 alumnus in sustainable energy engineering.
“I can simply say ‘that girl is me’. I too have carried more than 120 litres of water in a day, making six trips of 1.5km, each laden with water in a yellow jerry can. When the drought would persist, this scenario would recur over several days a week. On weekdays, I had to fetch water for two hours after school before doing my homework. Luckily, I had a mother who valued education. Two decades later, it’s unsurprising that my master’s thesis was on solar water pumps. This motivated me to do something about the water crisis.”
Using her engineering expertise, Tabitha worked in partnership with those in need in Africa to develop a sustainable solar water pump that is 90% cheaper than others on the market and can be affordably installed in rural communities. By installing just one of her pumps in a village of 20,000 people, more than 200 children can go back to school because they do not have to choose between school and water.
Since 2019, Tabitha has gained recognition and awards for her work including the Vice-Chancellor’s Impact Scholarship, Santander Enterprise Award, The Brenda Dean Ingenuity Scholarship and the Engineers in Business prize. She is now in discussion with a large company in the East Midlands to develop and embed real-time data monitoring technology in the next generation of pumps, with the aim of innovatively enhancing the benefits to the end users and the supply chain.
This article appears in the December 2020/January 2021 issue of the Chamber's Business Network magazine. To read the online edition, click here.Back