A peek into Africa’s crystal ball shows a continent confident in its future. It has the people, large reservoirs of the world’s most prized resources and the post-digital advantage of huge amounts of knowledge from all the previous epochs. This sleeping giant’s iterations of learning, trying and failing, and achieving will be more rapid than the others – if we are deliberate about it.
This optimism is, however, enveloped in a context of great volatility, uncertainty, complexity and ambiguity that comes with the ever changing global markets and the real pressures of climate change – where growth for growth’s sake is not enough.
As Africa projects 60 years into the future, it must embrace the fact that its industries then will be grappling with a radically different reality whose shape is simply not known. What matters is whether or not we can create competitive, inclusive and resilient industries where there are opportunities knowing we have to go beyond being observers of trends and be active builders.
What is known is that those industries must provide jobs for an increasing number of people. In the next two decades, Africa will need to provide jobs for 450 million people that will join the job market. East Africa alone needs to create 7,000 new jobs daily to keep pace with demographic change over the same period. All these people cannot work in the same industries. We must and can create opportunities as diverse as the continent itself.
We need to move from focusing on extractives, to manufacturing. There are opportunities represented in the fact that the continent still imports a third of food, beverages and processed goods that it consumes. The construction sector will consume large amounts of cement and oil refining will offer a great opportunity for investments. The business-to-business spending across the continent is likely to expand as trade barriers are removed and trade blocs are entrenched. In industries such as textiles and apparel; agro-processing for value addition, mobile telephony, building materials, car manufacturing and pharmaceuticals, Africa has the potential to replace or supplement part or complete unit source markets of China, India, South East Asia and Latin America.
We can be innovative and become cutting edge. Africa’s industries of the future must be highly technologically adaptable, a lot smarter and nimble to retain customers whose tastes change rapidly; and operate world class systems in that interconnected space.
E-commerce is already having a profound impact on businesses in Africa – with Mpesa taking the lead globally. Millions of digitally enabled workers will use online platforms as a source of livelihoods and use the platforms to transform SMEs into structured entities with capacity to grow. Furthermore, Africa’s diversity means its cultures can become part of a thriving industry in the arts, fashion, movies and music.
The shape of these industries will be part of the issues discussed by scores of eminent scholars, researchers, scientists, development gurus, political leaders and captains of industry gathering in Kigali this week for the Nation-sponsored KUSI festival.
The Horizon 1, East Africa’s regional report produced by Msingi East Africa, Gatsby and the Kenya Markets Trust, quotes commentators emphasizing the role ‘industries without smokestacks’ – such as business
1 – https://horizon-ea.com/wp-content/uploads/2019/10/2019-Horizon-East-Africa-Full-Report.pdf
process outsourcing, horticulture and tourism – will have to supplement manufacturing. These are industries with “high tradability; the potential for economies of scale; and a capacity to employ large numbers of people.”
As we move into 4th Industrial Revolution, the fear is that technology can undermine employability. The Horizon argues that although automation means clever machines and robots take on more and more tasks performed by humans, this capacity means we have to prepare for increased human labour in other sections that cannot be automated. Some studies (like Frey and Rahbari 2016) demonstrate that technology has created more jobs than it has displaced. The deliberate creation of the right skill sets will be critical for Africa’s place in this everchanging world.
Africa’s industries of the future are poised to benefit from the growing demand from African consumers and its growing reputation as a source of highly competitive consumer products destined for overseas markets.
But for Africa’s industries of the future to harness these opportunities, they must raise their productivity and increase efficiencies. They also need support like elimination of tariff and non-tariff barriers, reduction of the cost of energy, vastly improved infrastructure and a strong education and skills foundation.
This is where Government, Private Sector, Academia and development catalysts like Msingi East Africa Ltd come in. The former to create and sustain investor-centric environments, the latter to deploy their unique capacity to convene multiple stakeholders to deliberate and agree on the best approach to catalyse industries. These industries must improve operations, introduce world class processes and increase their contribution to the economies by creating employment and triggering activities in other sectors of the economies through forward and backward linkages.
Msingi EA Ltd is very excited about the work and role it plays and is very optimistic that it will profoundly impact Africa’s future industries. Currently active in two industries in East Africa (Textiles & Apparel and the Aquaculture industry), we plan to be involved in five industries by 2025, and should have triggered close to 500,000 jobs across the East African region by 2030.
Msingi’s role at this stage is catalytic. We scan the economic landscape to identify industries with a high-potential to contribute to GDP growth. We then develop intervention programmes across the value-chain driven by the constraints faced by both the public and private sectors, convening all the relevant parties to agree on a way forward. This approach to economic development requires a long-term perspective and patient capital. And this is how we aim to create a step change in the transformation of the industries we select.
Increasingly, the role is likely to expand to knowledge and experience sharing as Msingi hopes to impact more industries than the ones they adopt.
By DIANA MULILI
Diana Mulili is the Interim CEO of Msingi East Africa.