One of the featured women is Ibukun Awosika. She‘s the Chair of First Bank Nigeria — the first woman to achieve such a position in this institution. Also, she’s CEO and founder of the Chair Centre — a market leader in the office furniture and the banking security systems industries in Nigeria. And I’m proud to say that she’s is a graduate from IESE’s Global EMBA program.

Awosika is a great example of the values that the term Africapitalism entails (see Africapitalism: Capitalism with African values). Succeeding in Africa takes a high level of entrepreneurship, and a particular focus on social contributions along with a shared purpose. Awosika has embodied these values: she co-founded Women in Business, Management, and Public Service (WIMBIZ), a Nigerian based non-profit organization with the objective of elevating the status and influence of women. You may be interested in her inspirational book Business His Way where she encourages entrepreneurship.

Where do these 50 women work? The table below shows their distribution by country where they work, and the graph that follows shows the distribution by economic sector:

Little by little, women are making inroads, and play influential roles in large companies. 15% of senior management positions in African companies are held by women. Although there’s still a long way to go, this figure has gone up from 5% in 2010. Both men and women have important, complementary contributions to make to the business world, don’t we? This was Ibukun Awosika’s point in the Africa CEO Forum 2017. You may listen to her in this very brief (35’’) clip: 

Nadim Elayan, Research Assistant at IESE Business School, collaborated in this article.

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Related articles

• The Costs of Gender Inequality

• Women for Africa

• African women: a paradox

• Africapitalism: Capitalism with African values

The post Women business leaders making progress in Africa first appeared on Africa from Africa.

In 2014, African Union Commission Chair Dr. Dlamini Zuma stated: “Connecting Africa through aviation and other transport infrastructure is critical to integration, intra-Africa trade, as well as to tourism, economic growth and development more generally. The sector is also an important creator of jobs and critical skills on the continent. The aviation sector is strategic for the implementation of Agenda 2063.”

Indeed, many academic studies have shown that air market liberalisation has a positive impact on economic growth, increases competition and reduces air fares. It  increases consumers’ well-being, and has relevant positive externalities for a wide range of industries (see Measuring the economic effects of bilateral liberalization air transport  and Air transport liberalization and its impacts on airline competition and air passenger traffic).

The SAATM initiative was supposed to be introduced this coming month but so far only 15 countries have fully committed to implementing this decision. A large majority of African countries still want to keep their own airlines as a symbol of national pride, becoming a hindrance to the process.

However, committed countries are already experiencing great success. To give you an idea of such success: passenger traffic between South Africa and Kenya experienced a 69% increase after having opened air services and reduced fares. Positive experiences such as this may trigger similar responses in other countries.

Any suggestion or prediction about how this process is going to turn out?

Nadim Elayan, Research Assistant at IESE Business School, collaborated in this article.

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Related articles

• Agenda 2063 (I): “The Africa we want”

• Intra-Africa business travel

• Nairobi: Upcoming African Transport Hub

• Intra-African trade and transportation

The post Single Air Transport Market first appeared on Africa from Africa.

But how is a CFTA beneficial to African economies? And how far has the plan gone?

A CFTA is aimed at raising the low levels of intra-African trade, which represents only 13% of total trade in Africa. The expectation is to boost trade to the levels of other trade areas such as ASEAN (30%), NAFTA (40%) or the EU (60%).  So far, the big expansion in real GDP experienced in sub-Saharan Africa since 2009 (average growth rate of 4.5% per year) has been accompanied by large current account deficits (average -3.3% per year).* Lifting intra-African trade would correct this imbalance without slowing economic growth. Besides, a high volume of trade among sub-Saharan African countries would incentivize much-needed infrastructure improvement, and positively impact productivity in the medium and long run through higher competition exposure of local firms.

In the previous meeting, held in Kigali in February, technical working groups met to track the evolution of this process. They focused on trade in services; non-tariff barriers and technical barriers to trade; sanitary and phytosanitary issues; rules of origin; legal and institutional affairs; trade remedies; and customs procedures and trade facilitation.

Despite the noticeable progress, there are inevitable challenges associated with the unequal distribution of gains among members, which could eventually aggravate their economic imbalances. It’s also important to note that in Africa there are already a number of regional economic communities at different stages of integration (see the post The African Economic Community). A successful harmonization of existing trade arrangements will be needed for the CFTA’s ultimate success.

Any comments on the feasibility of these ambitious goals?

* Data source: Regional Economic Outlook

Nadim Elayan, Research Assistant at IESE Business School, collaborated in this article.

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Related articles

• Regional transport infrastructure improvements

• Agenda 2063 (I): “The Africa we want”

• Intra-African trade and transportation

• Trading across borders

The post A Continental Free Trade Area first appeared on Africa from Africa.

• Recruiting talent: digital channels have become increasingly popular for recruitment in the last few years. Three years ago, social media was already among the Top-10 most used channels to source talent, according to a report by EY. Yet, headhunters, recruitment agencies, company websites and staff referrals were still the most used recruitment methods in SSA. About one third of the companies use alumni networks in their recruiting strategy. This figure is likely to go up with the large increase in university enrollment in the region. Higher education students went up from 2.3 to 6.6 million between 1999 and 2013, according to ICEF Monitor. This represents a large and rich source of networks to the benefit of both companies and employees.

• Retaining talent: more than 10% of Africa’s highly educated professionals live and work in other continents – the African diaspora, as it’s commonly called. To end with such a “brain drain”, McKinsey’s report Lions on the Move II advises companies to develop their management team through localization, training, and integration. It also recommends shaping vocational training programs to create a front-line skills base at scale.

• Balancing local and expatriate staff: the proportions between local and foreign personnel vary among firms: some are skewed towards expatriates while other shy away from this practice. For instance, TransUnion’s Africa Region CEO Grant Philips comments: “We don’t have any expatriates. We don’t think it works. (…) I find that local teams on the ground, which are able to connect with local networks, are very effective. We don’t parachute in senior managers for day-to-day management.”

A recurrent idea in this blog is that it takes local management to succeed in Africa. Not only are expats more expensive but also – and more importantly – they are less tuned to the local environment. Investing in the human capital of employees will pay off, and this needs to be considered when making hiring decisions.

Any experience recruiting or retaining talent in Sub-Saharan Africa?

Nadim Elayan, Research Assistant at IESE Business School, collaborated in this article.

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Related articles:

• Advice to invest in Africa

• How do leaders spend their time?

• Be the change

• A Young Population, a Youthful Mentality

• Thinking long-term in Africa

• It takes local management to succeed in Africa

The post Where’s the talent? first appeared on Africa from Africa.

• Do not come with solutions but ready to engage with others to find solutions: reengage the minds of the African population to solve their problems.
• You need local partnerships: coming from the outside, you’ll find a few things that will challenge your business model.
• You can’t have a short-term goal: you need patience for the investment to mature or for the industry to settle – in fact, you may need to help shape the industry.
• Know the values of where you are: if you want to build for the long term, you can’t just focus on the economic factor – you also need to facilitate social engagement.

Her last words were a great synthesis of her message: To create economic value, create value for the people, and then they will support you.

I love it when I hear African business people send messages that resonate with those in this blog:

• Some MNCs have an ethnocentric perspective that doesn’t recognize country differences: that brings them into the route to failure. Post to check: “Into Africa: routes to failure and success!”
• Foreign companies need to partner with local companies that contribute market knowledge: if you don’t include locals, you are already at disadvantage. Post to check: “Alliances: the key to new markets.”
• Thinking long-term pays off in Africa: this is in sharp contrast to the short-termism so prevalent among Western companies. Post to check: “Thinking long-term in Africa.”
• Patient capital is focused on returns in the long-run, and it’s also concerned with the social aspects of development. Post to check: “Patient capital.”

Any additional advice for foreign companies willing to enter the continent?

Related articles:

• Into Africa: routes to failure and success!
• Alliances: the key to new markets.
• Thinking long-term in Africa.
• Patient capital.

The post Advice to invest in Africa first appeared on Africa from Africa.

The 2017 African business outlook survey deals with this issue. The Economist and Corporate Network online-surveyed 150 executives. 22% of them executives pointed operational optimization as one of the major challenges faced by their companies.

For instance, Robert Collymore, CEO of Kenya’s leading mobile network operator Safaricom, said that he spends 50% of his time on operational issues, 30% on strategy, and the remaining 20% on managing external stakeholders. Optimizing operational parts of the process is crucial to devote more time to activities such as strategy- and innovation-related actions that may expand the company’s potential growth.

In sub-Saharan Africa, a generally poor infrastructure development is a huge drag for operational logistics, and it clearly sets back an important part of the economic activity. For instance, long traffic jams (see the post Urban Transport), the poor shape of roads, and other connectivity problems have operational consequences such as increased delivery times. Also, the frequency of black outs experienced in many SSA countries (see the post Energy Poverty) and other basic supplies shortages increases operational costs.

My IESE colleagues Philip Moscoso and Alejandro Lago have published a practical guide to optimize business operations that could be also useful for African leaders. The authors emphasize the need for companies to revise in depth their value chain, and to constantly innovate and experiment with totally different ways of doing things. If you take a look at this guide, you will find some recommendations that may help optimize operational processes, and in turn save leaders’ precious time.

Any experience on optimizing the operational process in SSA?

Nadim Elayan, Research Assistant at IESE Business School, collaborated in this article.
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Related articles

• Regional transport infrastructure improvements
  
• Energy poverty
  
• Access to electricity in Africa

The post How do leaders spend their time? first appeared on Africa from Africa.

Top climbers:

• Energies Nouvelles (#233), construction, Republic of Congo, $558.5 Million turnover (+74%).
• Ercinn (#316), construction, Ivory Coast, $399.5 Million turnover (+73%).
• Pioneers Holding (#231), financial services, Egypt, $559.7 Million turnover (+65%).
• Palm Hills Development Co. (#279), construction, Egypt, $458.7 Million turnover (+56%).
• PSG Group (#104), diversified, South Africa, $1.29 Billion turnover (+37%).

Top fallers:

• Oando (#154), petroleum services, Nigeria, $802.6 Million turnover (-65%).
• Middle East Oil Refineries (#91), petroleum services, Egypt, $1.53 Billion turnover (-56%).
• Egypt Kuwait Holding Co. (#359), diversified, Egypt, $341.2 Million turnover (-52%).
• Sonangol (#2), petroleum, Angola, $17.27 Billion turnover (-49%).
• Grindrod (#198), transport, South Africa, $661 Million turnover (-45%).

Top-10 Companies in Africa

Top 10 Companies in sub-Saharan Africa (excluding South Africa)

Only 3 sectors (construction, textiles and utilities) saw their overall turnover grow in 2015. By far, the largest climbers were the 50 construction companies in the ranking, which recorded 14% growth. In fact, 3 out of the 5 top climbers operate in the construction sector. All other sectors experienced decreases in overall turnover from 2014 to 2015.

For 3 years running, Africa’s Top-500 companies have been producing lower overall turnover. Since 2012 this figure has decreased from $736.8 billion to $610.4 billion. Besides, profits also crashed down hard between 2014 and 2015.

Potential explanations for this negative situation might be:

• Currency shifts: two of Africa’s largest economies, Egypt and Nigeria, experienced foreign-currency crunches in 2016. They both combine for 3 out of the 5 top fallers in the continent.

• Global uncertainty: the world is facing an environment of international political uncertainty that will surely impact several other socio-economic aspects such as trade, migration or investment. Unfortunately, Africa might suffer from it as well.

Variations in the Top-10 companies in SSA (excluding South Africa).

• Companies that came out of the Top-10:
  • Société Nationale des Hydrocarbures, petroleum, Cameroon.
  • Oando, petroleum services, Nigeria. Oando has experienced the harshest drop in the Top-500 companies (-65% in their turnover from 2014 to 2015).
  • Compagnie Miniére de l’Ogooué, mining, Gabon.
• Companies that came in the Top-10:
  • Flour Mills of Nigeria, agribusiness, Nigeria.
  • Kansanshi Mining, mining, Zambia.

Cameroon has lost their only representation in the Top-10 in SSA as Société Nationale des Hydrocarburs has dropped remarkably since last year. On the other hand, Zambia has gained one more spot within the Top-10. Kansanshi Mining has gained 8 positions and now joins the other Zambian company in the top of the ranking, Real Estate Investments Zambia.

The outlook is a bit gloomy. But Africa’s potential is there for the long run. It will take patient capital to build a brighter future. What do you think?

Nadim Elayan, Research Assistant at IESE Business School, collaborated in this article.

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The post Top-10 companies in Africa first appeared on Africa from Africa.

Gender inequality translates into a huge drag on socio-economic development. For instance, when a society leaves half of its population behind in terms of opportunities and recognition, an important part of its potential for new ideas and motion vanishes with it. Let’s take a look at the index for gender inequality that the United Nations publishes across countries. It measures gender inequalities in 3 important aspects of human development:

• Reproductive health, measured by maternal mortality ratio and adolescent birth rates.
• Empowerment, measured by the proportion of parliamentary seats occupied by females, and the proportion of adult females and males with at least some secondary education.
• Economic status, measured by the rate of participation labor force of female and male populations.

The top performers in the world are Slovenia, Switzerland and Germany with values of gender inequality below 0.05. In the SSA region, we can easily highlight Rwanda, Namibia, South Africa, Botswana and Burundi as the most gender-equal countries in SSA, with scores below 0.5. On the other hand, Chad, Côte d’Ivoire, Mali, Liberia and Sierra Leone are the most-gender unequal with scores above 0.65.

As we have mentioned before, when a society systematically sets aside a large fraction of its own population, it ends up missing a lot of opportunities to build upon these lost minds and ideas. So, it’s not surprising that the top-10 countries with the lowest gender inequality index in SSA score well above the average in terms of entrepreneurship and development, according to the Global Entrepreneurship and Development Institute (GEDI) index, whereas the 10 countries with the highest gender inequality scores significantly lower.

Fighting gender inequality is not fair both for moral reasons and for socioeconomic development. It’s a must in order to stop destroying potential ideas. The problem needs to be tackled from its origins at the education system to its latter stages in the working place.

Initiatives such as those Mujeres por África leads are important to this end.  They tackle key areas where gender inequality hits the most:

• Education: they provide great scholarships to prospect African women to study in Spain;
• Knowledge: they support African women in their access to scientific investigation centers;
• Health: they lead informative campaigns regarding malaria and other transmittable diseases related to sanitation conditions;
• Economic development: they lead programs, such as the Launch & Grow, designed to exploit all women potential through an intensive course and a mentoring process.
• Empowerment: they gathered women leaders around Africa to discuss about leadership and governance with other world leaders such as John Kerry, Samantha Power or Janet Yellen.

Would you like to share your views on gender inequality?

Nadim Elayan, Research Assistant at IESE Business School, collaborated in this article.

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Related articles

• Green Voices: Empowering women to fight climate change

• Women for Africa

• African Women – a Force for Peace

• African women: a paradox

The post The Costs of Gender Inequality first appeared on Africa from Africa.

The non-governmental and Germany-based organization Transparency International published last month the Corruption Perception Index (CPI) for 2016. They have been publishing this index since 1995, in which they rank countries by their perceived levels of corruption, as determined by expert assessments and opinion surveys. The scale ranges from 0 (extremely corrupt) to 100 (extremely clean or absent of corruption). We focus on the performance of sub-Saharan African (SSA) countries, and analyze their relative positions as well as the impact of this index on key economic indicators.

We are pleased to point out that there are 4 SSA countries among the top 50 cleanest nations worldwide: Botswana, Cape Verde, Mauritius and Rwanda. Not surprisingly, the top 10 performers in the CPI index in SSA also enjoy higher standards of living. For instance, according to the World Economic Outlook Database from the IMF, they average a GDP per capita (in $US) of $3,260 and they are expected to grow at the fastest rates, 4% on average, this 2016 (the IMF does not have the official figure for last year yet).

However, the 2 most perceived as corrupt countries in the world also belong to the sub-Saharan region: South-Sudan and Somalia. The bottom 9 countries — the IMF doesn’t cover Somalia in their database — average a GDP per capita of only $1,208.  This is 2.7 times less than the top 10 performers. Further, they are expected to barely grow in 2016, 0.4%.

As the readers might have inferred, corruption perception affects many aspects of society, and it is important for SSA governments to take steps towards greater transparency. Some are taking this seriously: 19 SSA countries increased their index scores. Most remarkable are Sao Tomé and Principe, Burkina Faso and Cape Verde (+4 points). Nevertheless, 20 countries worsened their transparency perceptions last year, notably Lesotho (-5 points), Central African Republic, South Sudan, Djibouti, Mozambique, Ghana and Mauritania (-4 points).

Finally, some good news regarding some of the most populated countries in SSA. Tanzania, Nigeria (+2), Ethiopia, South Africa and Kenya (+1) have also improved their transparency index last year and they combine almost 400 million people.

Nadim Elayan, Research Assistant at IESE Business School, collaborated in this article.

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Related posts:

• How personal networks matter in Africa
• Doing business in Nigeria: overcoming cultural challenges
• The informal economy

The post Not Every Country Is Equally Corrupt first appeared on Africa from Africa.

Africa’s infrastructure deficits, that include transportation and energy access, have been estimated to cost the continent up to 2 percentage points of annual economic growth in 2015, according to the African Union Commission. This is a huge drag for the continent’s economic activity: to give some perspective, Sub-Saharan Africa’s (SSA) real GDP grew at 3.35% in 2015. African leaders’ commitment in Agenda 2063 to accelerate action to connect the continent through a better infrastructure aims at overcoming this situation.

A look at the 2016 regional infrastructure index published by the African Union Commission gives us the opportunity to compare how regional integration varies across African administrative regions.

The good news is that the overall situation has improved in the last decade.  Still, these improvements are distributed asymmetrically across the different African areas.

• Roads: Overall, the continent’s road network has increased notably: since 2006, the yearly average growth rate has been 2.2%, up from 1.8% in the period 2000 to 2005. In the Western region, has increased by 29% this last decade and it has the second highest road density, 10.9, only lower than the Southern region, 18. Central Africa is the only region with a reduction in the road network from 2006 to 2015 (24% decrease) and it continues to be the region with less road density too (only 4.7 km by 100 square km).
• Railways: there are currently important projects in progress: Djibouti-Ethiopia, Dakar-Bamako, Mombasa-Nairobi in Kenya, which is planned to be extended to Uganda, Rwanda and South Sudan by the following years.
• Inland water ways: the navigational line between Lake Victoria and the Mediterranean Sea through the River Nile is the most iconic project under construction.

What’s your experience with transportation in SSA?

Nadim Elayan, Research Assistant at IESE Business School, collaborated in this article.

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Related posts:

• Intra-African trade and transportation
• Agenda 2063 (II): Connecting Africa through high-speed trains
• Regional integration in Africa

The post Regional transport infrastructure improvements first appeared on Africa from Africa.