Davos 2019 - Achieving a Single Market in Africa

thank you very much to all of you for being with us this afternoon it's a very exciting topic which is integration in the African continent how do we build a single market in Africa in order to do that we have an excellent panel that will speak of the different dimensions that this discussion needs to benefit from let me briefly introduce you to the our speakers let me start with Rob Shuter he's the CEO of MTN Group mobile telecommunications the digital economy to his left a communiy AUD at a Cena who needs no introduction in this discussion is the president of the African Development Bank to his left is Bernard Gucci he's the group deputy CEO of Bendel his Bendel is a French investment company which has a long tradition of entrepreneurship a very active in the African continent to his left we need be a namibia knee Lima being said again you say that for me good at a weenie weenie weenie needs no introduction in this room either she's the executive director of Oxfam international carrying about people and to her left it's a manual gyum or he's an entrepreneur in residence tech startup in Kenya South Africa is a founder of retail labs research intuitive outfit in Accra he's our young he said he's a young shape I think he's a young leader this discussion is about the one area of good news in international trade that we had in 2018 and it came from Africa and this good news was an impetus from all African governments to integrate the African market this discussion matters for many reasons first it matters because they showed that they view international trade as a win-win game and not as a loose wind game as we've been made to believe - because leader signing the country African Continental free trade agreement understood that trade can help in improving competitiveness and we know that competitiveness makes for better wages better working conditions it is a good tool to reduce the informal sector improve working conditions of workers many of whom the vast majority are young 3 because they put the emphasis on making sure this integrated Free Trade Agreement benefits the 99 percent of Africans small and medium enterprises young entrepreneurs women in business and I want to make sure that we also focus part of our discussion on them because in my view they are a big part of getting this right also because by doing by signing on to this Agreement they sent a very clear message that they want to help develop value chains that span different African countries so develop cross-border value chains the African continent being the one where value chains are least developed when one looks at the map of the world finally I think it was also good news because it showed from this decision to sign this agreement that they view leaders in Africa view cooperation and not unilateralism in trade cooperation in trade as an as a contribution to the solution now obviously this is not the only piece that African leaders signed last year there was also a very interesting coupling of trade with single aviation space with movement of professionals with a big drive to reduce red tape when crossing borders more and more visa free and even African passports so it in my view is the signal of the direction that African governments have taken of course for this captive sceptics around us they will tell us that this is just a signature that much needs to be implemented and it is true they will tell us also that there is a big part of this conversation that hasn't yet taken place the part about the digital economy and how does the African continent regulate the digital economy and technology and that's right but I think the signal they've sent is a very important one what we are going to do this afternoon is dig a little bit deeper into what needs to happen now now let me start with president at the Sina let me start with you in a way giving us a broad overview from the African Development Bank perspective what are the opportunities the major opportunities that you see in the signature of this continental free trade agreement well you know first and foremost is that Africa's trade with the rest of the world is so small you know maybe about 4% and and what Africa actually exports is essentially a lot of raw materials so it makes Africa's exports so susceptible to global volatility and you see all the booms and busts that we always have we regard to that our economies but what you find is that those countries that do participate in regional markets are the ones that actually have much more stability in terms of their economies so building that size of that market is the critical thing I think that African economies will be able to industrialize better I think they'll be able to create a lot of jobs I think to the point you were raising about the issue of global value chains if you're going to play the global market the global value chains are important and becomes a stepping stone for you to also get into the to the global to the global value chains and quite honestly I think it will create tremendous amount of jobs especially for small and medium sized end surprises that can actually trade all across the borders now for us from the African Development Bank side we just did an assessment looking at companies and how they look at this continent a free trade area and we were asking them what's today see at the three topmost constraints and what they told us with Crichton is instructive the first thing that they say is access to finance the second one is access to power electricity because obviously without electricity what can you do and the third one is political stability these three things so I make few comments about about about this if you take the case of access to to finance but access to finance much more limited actually for the small and medium-sized enterprises that you just mentioned you know they account for about seventy five percent of all the businesses but almost only twenty percent of them actually have access to bank accounts are small and medium sized enterprises so getting access to finance for the small guys to play in this big area it's the istic is the key so that it's not just a market for the big guys to to play now at the African Development Bank we have a facility we've rolled out it's a 1 billion dollar facility to support small and medium sized enterprises we have so many of our partners that I hear that we do lines of credit through to support small and medium sized enterprises the second one I think is in access to trade finance trade finance is going to play a big role today if you look at that nature of trading the continent only 15 countries account for over 85 percent of all that intra-regional trade that you're talking about South Africa is that we talk about seventy thirty four percent the issue is how do we expand that but you can't do that unless you have trade finance and so at the bank at the African Development Bank we have a 1 billion dollar facility that we've rolled out a trade finance facility to support that and so far they're supported transactions in about 100 911 transactions in about 44 countries and mobilize about several billion dollars in terms of trade but in South Africa we for example we have the the first two banks that we are working with with about six hundred million dollar facility for them to also support trade in about twenty country so all I want to say is that access to finance or small and medium-sized enterprises trade finance is very very very very critical the last one I want to say on the political stability why this is important for driving not only Africa to Africa trade but also foreign direct investment and he stopped coming to this wider space we did the Africa Investment Forum and we have the DBS say he has several partners that are here that were with us on that we did it on the in November last year in South Africa and we were able to mobilize thirty eight point seven billion dollars in less than 72 hours think about that that's it different Africa that you're talking about and that is about 133 percent of the four of the aid the continent got in 2017 but we did in about less than 72 hours and so that tells you that Africa is open for business the opportunities are there you know when people look at Africa think of the population think of the middle class think of the huge opportunities to invest across borders not just limited by the boundaries or borders and look or the opportunities for you to be able to invest in a continent with a population that will be the same size of China and India by 2050 rapid middle class a continent that's thriving with young people with lots of things to do I guess the way I can only summarize it for the continent is what one of the senators senator Coons the United States said when they were launching their investment program for Africa he said think of the nest China after China we were thinking about that and we think that nest China after China is going to be Africa this is exactly what the continent our free trade area is almost three trillion dollars of combined GDP that's the market to focus on and I think that if we can deal with those issues of access to finance promote trade finance and also invest in infrastructure can comment on that lives are on I think we'll be able to help Africa to double a lot of the intra-regional trade that is doing right now would you see very low very clear thank you so much I guess Barnard is part of these trillions that you just that you just described let me just burn or go straight to you the Continental free trade agreement is promising to lower obstacles to cross-border trade what is the reason why a company like yours Bendel is investing Europe pretty present in Africa what is driving you to invest in Africa and what do you expect from this agreement to scale up your operations in the continent first I I need to just explain in a couple of words who we are we are an investment company that we are investing our own balance sheet we are not investing others money neither governmental nor others money we're investing our own money and we do it because we have a balance sheet we do it with a long term perspective and a very long term perspective because we are controlled by by a family a French family which has created this companies 300 in 15 years ago so we take our time and that's why even if this Agreement is just a first step run along on a long road and long journey we are very happy it just happened we we are the largest shareholder and controlling short of duo Veritas it's a certification company active in 160 countries around the world they started in Africa in 1870 in Senegal now they are serving 10,000 clients making half a billion in revenue I've grown 3,000 engineers and and doing business in in more than 20 years six countries so it's in next time I must admit that it has taken a lot of time this one but we have a very long term perspective so to this extent what are we looking in with this context in mind what are we looking for in Africa we are looking for local growth organic growth we are not so much interested by the the big international intercontinental trades we are not interesting we are not investing into mining business we are not investing into this kind of risk natural resources based businesses which actually as president said is moving key resources outside of Africa get it transformed outside value is created outside and then sometimes coming back we are not in this type of investment we're investing into local growth so we have started to invest directly as a company in Africa seven years ago and in in the last five years we are going to invested more than a billion in four companies so it's targeted investment and these four companies are service companies we have invested only in service companies we are a very long term but we have also have to do with the local statutes of the economy and service is very much developed in in Africa today and creates a lot of jobs so just to give you a few examples and numbers we started to invest five years ago in IHS Telecom the largest telecom tower business in Africa IHS has created roughly estimate rough estimate 80,000 jobs over the last five years directly or indirectly we are the controlling investor in South Africa sabo it's a catering business they have they have created 40,000 jobs over the last 10 years and trained low-wage people get access to skills so we have also invested in a Moroccan headquartered insurance business operating in 26 country in Africa we we've just interestingly sold it to Sandlin the South African insurance company but these guys have also created 10,000 jobs over the last 10 years by just working in Africa for African consumers for African and customers so we believe in Africa African companies for African markets and African consumers so moving the borders facilitating the the trade within Africa is very important for us it will help I believe to replicate some of the most successful models in which for instance we've invested into many other countries spread out the best practices create jobs all over the place again more in the service domain first maybe hopefully I do believe in it one day in the manufacturing and transformation industries but first and foremost in the service business I do believe in the development across Africa in anything which starts with the e e business there's a boy an entrepreneur use in Africa creating a lot of I think a lot of IDs I'm sure we will hear about this in a few in a few minutes and and this can cross borders much more easily than than than goods but if we could immediately remove all the difficulties for circulation of people I will be very happy we talked about goods today it costs less money to bring a car from Paris to Lagos than from Accra to Lagos today we have people in our staff in our ed quarter in Morocco it's much longer for them to get visa we are we have a Congolese and communist guy Cameron this guy has never been authorized to go to Kenya and the Congolese one as had to wait four weeks before he got a visa while or team in Paris was rapidly welcome that's not a way it should go these are real-life examples so when you said earlier that borders will be easier to cross for Africans going into Africa I think it starts with this business people need to travel to create value to replicate successful business models workers need to travel with all due respect for China which is which is a great country Africa does not need Chinese workers they need more African workers traveling within Africa so that's why we are investing in Africa and we believe this new agreement is again only maybe one step but heading definitely in the right direction first remove barriers for circulation of people and at some point of time president just touched a very important topic for US investors also for this is facilitating money to circulate money to circulate and money to be found locally we need more depths of financing market to provide financing to all kind of companies and to this extent if I if I if I need to be a little bit provocative I would I would appreciate favor of much less currencies and much stronger currencies in Africa that's maybe euro for which has been creating in Europe is not the best example but I think there are some good reason why it has been created and I would strongly advocate for much stronger and fewer currencies in Africa Thank You Bernard let me just this is an interesting segue to to Winnie we need you've Oxfam has just put out yesterday a report in which it looks at the glaring and increasing inequalities in in our world between the one and the nineteen what we call the one and the 99% how can Africa do it differently and what opportunities or challenges does this continent of free trade agreement generate thank you the continent of free trade agreement is really an exciting moment for Africa demonstrates the ambition of our leaders to achieve the sustainable development goals the 2063 agenda it's hopeful but then we have to be we have to learn from other trade bloc's from globalization up to now and we cannot make the mistakes of the past so we need to learn from the trade that has happened within the context of globalization we've had a situation where we have no proper rules no referees and bullies take charge and take the spoils we have richer countries which accompanies richer people gaining from trade liberalization and many others left behind that's not what we want from our block so we must define success what does success look like for us in our block and I think the most important measure of that success is the good quality jobs that will be produced for young people and for women so we need our governments to write the rules to ensure this we need rules to have secure jobs that are coming out of currently what we now have a very informal eyes economy a formalizing economy that creates good jobs to many of our countries don't even yet have a minimum wage workers have no voice no rights this is not the basis for a new global bloc that is going to deliver for our people the worst jobs are in the informal sector it is women working mainly in that informal sector we need to transform this and to do that it's not just an accident it has to be planned second and I'm happy that president addison of the back nation this many times it's our small and medium enterprises they struggle they struggle competing with big corporations our governments prefer to work with big corporations they live our small and medium enterprises to struggle on our own this must change we need that trade liberalization takes a pace that gives our small and medium enterprises the opportunity to grow to protect jobs and create opportunity for the majority of people finally we need to prevent our trade block from the risk of allowing the rich countries to undercut our industrial development we have to develop in Australia we cannot leap frog to nowhere we also need to develop industries so we must be able to use tariffs and other measure and other measures to build strategic industries for Africa industries of the future and our governments must show that that that they can cooperate to build these they need that cooperation so I see a lot of hope but we must build a trade bloc that engages globally but that is protecting good decent jobs for our people and especially for the women of Africa and the young people of Africa Thank You wienie this is what we in the international trade center call making trade work for the 99% understanding the 99% of our economies anywhere everywhere is small and medium enterprises they are the ones that we have to be focusing on I'm really glad that this is coming as a threat in this discussion Rob the economy of the 21st century is much more and more digitally powered economy well and you are in that space you are Mtn what opportunities does this Agreement create from your point of view to help Africa thrive in this economy in the 21st century I think you know my perspective shaped by my experience in the in the sector of the last ten years or so before I came back to join MTN I was responsible for the European operations of Vodafone those nine countries overall EU Member States and in managing that portfolio it was you know so much easier than I now experience in African context you know we had a lot of harmonization of legislation spectrum policy licensing regulation it was very easy to move people between the markets for pollination of ideas for for skills transfer and also very easy to route goods and services you know in our industry if you deploy say a 4G technology in a particular area where there's a lot of 4G devices it was very easy then to reuse the 3G technology in other markets of a different stage of the lifecycle so if I look now at our experience in Africa we're in 17 markets in sub-saharan African for in the Middle East all of these things I mentioned are much more complex the African markets are much more fragmented from a policy perspective it is difficult to move people around as my colleague from from Wendover saying and and and to move you know equipment is really complex you know in the old life if the space gray iPhone wasn't selling in one market you very quickly just deployed it into another and in our markets now that's that's not really possible so we are very enthusiastic about a much more harmonized digital market for Africa and that would make it that would create a lot of efficiencies in our industry I think the the Continental free-trade agreement is a very important first step but there is much more work to be done and the more efficiency there is in the sector the easier it is to to deploy services those efficiencies can be passed on to customers particularly also in the work in the world of the the data and the digital services you really do need a harmonization you know this is a world now where you know all of our personal data if I ask you where are your google photos where is your iCloud where have you stored your Dropbox most people don't know where it is because it's in the cloud so we need also harmonization there and I think one of the concerns is we see sometimes a trend of of a sort of a data and nationalism where each market wants to have all their stuff in their own market that's really very much you know not I think really the way the world is evolving so that would be hugely helpful I think that the final comment is that for the business sector you know our revenues now as MTN come around 12% from the the business market we see that as a major growth area about two-thirds of that or SME so actually the the real heart of the business market is not the big multinationals it is the smaller medium-sized enterprises and they would be very much stimulated and assisted by a much easier movement of goods and services between the markets and that's also going to be a big part of our success in the future so you know we're very encouraged by these first steps but as I said I think there's a lot more to be done so work in progress sure of course okay yeah I think you know the the digital market is I see rightly said it's a big one both for Financial Inclusion but also in terms of the service industry you know a lot of service industry outsourcing is happening and Africa with this young population I think as he was saying there's a lot of young people that can actually participate in Lord in that outsource service industry but without having a very very efficient IT infrastructure you really cannot do that and and that's why for us at the African Development Bank we are investing heavily in you know IT infrastructure you know to help for example you take Central Africa it's very difficult in Central Africa to communicate and so we invested over you know 300 million euros in central Africa backbone which is it's in two thousand five hundred kilometers of fiber optics that we we do over there which in fact is going to help to reduce the I mean increase internet access from six percent to 20 percent when you go to some of the trans-sahara fibre optic network which is your link in order to charge tunisia and to nigeria right we're also it's very very difficult so we've invested heavily in that particular infrastructure as well as well as the east africa marina fibre optic system now that's what they need to be able to access speed of voice data things are maybe quite competitive in the world today but a point I want to make finally on that is the importance of really supporting the young people to take advantage of these platforms that we have you know so for example were talking about the case of data if you if you go on Google or you don't save your information Africa today does not have data centers we do not control that and and so you you hit it it goes to California somewhere else we are not in charge of that and so so it's not the the what I call it the cloud is not a cloud it's saving so well somebody else making money from it and so for us our African Development Bank we've prioritized the need to invest heavily in data centers even as we invest in digital entrepreneurship which is going to be the key for Africa are going forward wow this is I could jump in before they say something but waiting for you man yeah so before we have the young leader with the middle-aged executive you know the business case for a large Africa data center would be immensely enhanced if it could be providing data services to multiple countries yeah and that's where again we come up against the the data nationalism and and the the lack of the harmonized legislation because we have all of the capacity to do it for sure and hopefully this you know the free trade agreement will will start to move us in that direction but at least it's much easier to move data rather than goods let me know let me give the opportunity to MN why because when I talk to African leaders they tell me they've build this Africa continent of free trade agreement for guys like you so we want to hear from you what do you expect from this agreement but also what do you want these leaders to do now that they have signed on to it thank you very much and thank you for the opportunity and I think as we're grappling with the architecture of globalization four points oh the biggest question is how do we enable young people to be economic agents in a single African market and becoming an economic agent one empowering us to have our own agency and a conducive environment to play with in that environment so I'll tackle that and maybe two or three spaces education access to finance and then an architecture that we've kind of spoken about that opens up borders for young people to play in one of the things we're excited about the single trade market is obviously when we speak about internet and digitization it allows us to have a customer base to allow the economies of scale the problem is it's a wicked problem you need multiple interventions because us as entrepreneurs on the Khan once we're online we're not just competing with each other on the continent we're competing with our counterparts in Europe in America and China who already have a consolidated framework or conducive environment to play in so finance interlope ability for example and I play in Ghana and in South Africa and is a very different financial structure in both countries and so when we have an e-commerce site for example and trying to find out how do you make it or how do you prevent as the most barriers for a customer to give your money for an innovation that you've committed your life or years to that structure is not conducive then the single trade market is really not effective in that space I promise you'll be the next one winning number in that same space education and for a lot of us for you to become the most effective economic agents you need to be globally competitive in a world where we assume that and I guess my age demographic is Millennials but my younger siblings are just as competitive young 28 20 year olds who it seems as if a lot of my parents think we know everything because we're a younger generation but the information gap is happening so quickly so we need to be in part economically so we can also learn from different countries and participate in that type of economy and so when the single trade market is opened up it should be opened up concurrently with sync a single knowledge database that lets us learn about ourselves so a good example is Ghana and Nigeria we have seemingly similar cultures and music and we see strong collaborations in arts and culture and we celebrate that but we miss out on the rest of West Africa because we don't have that access and so what we think or what a lot of global leaders say is something that we should be and we should celebrate arts we're selling fashion we're globally we're not enabled because the single trade doesn't open up opportunities for us to learn and compete just as quickly I mean I think the last point outs and and relinquish on that is in spite of these there are lots of young Africans that are trying to break through government bureaucracy breaking through private competition and it is a competition and when we appreciate what MCN does but an example is for example text messaging and texts so value-added services are wrong a long text messaging and I've had friends who started those type of bundled up text products but once the telcos come in and because they are the vehicles and they determine the terms that innovation that initially started that was fair playing grounds for young people vanishes and it doesn't come back but what I'm saying about how young people have gone through governments and private sector is co-working spaces and innovation hubs so what we try to do is in the absence of government funding and opportunities will work that yes is impressive in tens of thousands over a couple of years but there are millions of us we've tried to congregate our limited resources in co-working spaces and try to say that we can start-up businesses but that's also a challenge because we need mentorship and we need the resources to scale those businesses up now take advantage so that my business whether it's in low mass or whether it's in Equatorial Guinea can be competitive and scale up to somewhere else and improve malanga or to Kigali as well thank you very much we know you wanted to come yes I wanted to come in and I want our discussion to be back on the issue of what is a success we are looking for recently I live in Nairobi I move docks from tonight Rob be proud of that in Nairobi on a hot day I took a taxi and it was just a kilometre I will not mention which taxi I took but we have like three big network companies and a few and other small ones I arrived I expected to pay the minimum charge and the bill came caused us to pay a hundred and seventy Kenya shillings that's less than $2 now this company the taxi driver told me that 20 percent of the profit on that less than two dollars goes to the global company and then any other profit left he shares with the owner of the taxi because it's just a taxi driver I asked him where he lives he lives like 30 kilometers from the city that's where he can afford I assume how much he pays for rent he says he pays for one room with three other taxi drivers and they sleep in turns because if couple of hours each because none can afford a room that is the job that the company offers so too many jobs that are coming to us our jobs without security digital jobs but there are jobs are no security with no life no meaningful life for our people so we are not going to build a continental free-trade area with a lot of infrastructure connecting our markets moving people around and but giving people jobs that are poverty jobs so we need our countries to set standards to be clear about what we are looking for for our people and to deliver on that I'm afraid we don't have such standards i if you know I just came from Spain I'm Spanish and I was home last week the drivers taxi drivers in Spain would have exactly the same plea and they are in Spain they are not in Africa but it doesn't matter the problem is the same is whether or not we have the right standards in in making sure that the digital economy is also make working for the people and working for these and jobs because a few years ago the minimum charge of a taxi driver in Nairobi was about five dollars that's the minimum charge you paid for a normal taxi if you walked out of your hotel but now who travels for less than two dollars in a taxi I mean people have been pressed to the bottom and we call these jobs jobs this is just poverty and some kind of slavery to global companies money yes so I just wanted to comment on what your point on these free trade area being done for young people and and and just the the global leader that what you were saying there I think I think basically we cannot achieve that unless we have a financing facility that works for young people young folks I mean what actually led to creating somebody like it is zugerberg or Bill Gates and stuff like that you got young people they had a lot of great ideas they want to take on the world and we want them to take on the world but we don't put capital at risk for young people how do we want them to get the financing that they need to turn their bright ideas into big businesses and so I decided at the African Development Bank that we're gonna do that we're gonna put our capital at risk for young people for their ideas because most of them don't want to walk with somebody else they want to have their own businesses they want to be entrepreneurs I mean you've got to nearly Belu here he's doing fantastic job you're gonna be working with him on that that particular issue at our psyche waves here who sits on my presidential Advisory Committee to advise me as president about not just green things for young people what do they want my vice president is here Jennifer blankets in the audience and so we we decided that first and foremost is how do we do risky financial markets to lend to businesses and ideas of young people right so some of them will fail but if 2/3 of them work just imagine what Africa will become in so supporting entrepreneurship I think it's going to be very very vital to how we do this we have a facility with the European Investment Bank that's called boost Africa which is 200 million euro facility to support early-stage businesses high high risk businesses for entrepreneurs and I think that's important the other thing is what you were seeing about women and I couldn't agree more with you on this in 1992 I took a flight from Lagos to imagine I've you know in those days you remember there was this Compaq computers we used to have which is the ones that look like a suitcase that like place you you pick it up and that's all I had and I got on the flight and there all this market women they call them in West Africa they were all on the plane and they were all the same sizes very you know they were like this and they were managing to go through the island stuff like that but what they had done was that they had wrapped a lot of bills of clothing around themselves to avoid those that take bribes over tax them because their formal things and stuff like that so all of a sudden the tape started going off and you find out they're actually the same size now I want it who are putting their stuff on the on the overhead compartment so I needed to put my or compaq on Peter that there was no space the hostess walked up to me and said can I help you I say yes I just need to put this up there she said how many times you fly this plane I said it depends on where my job takes me just say you see this market women here they fly it every single day so we're gonna take your computer or that your bag and put it down in the hole make more room for the women what that means is that we cannot have a credible inclusive continental free trade area when we can we have to transform the informality to the formality we have to empower the women who form the major force you know African economies today I tell you when we had the problems with the financial crisis said with the layoffs and structural adjustment they held up the economies they held them households so we have to make sure that we actually support women that's why for us and the African Development Bank we are working very hard on an initiative that is called the affirmative finance action for women in Africa which is to leverage three billion dollars for businesses of women in Africa you see the day Africa gets the issue of women right in terms of entrepreneurship in terms of business ideas Africa will fly I think with two wings now no one that we are flying with right now I think this is going to be very important in this issue of of trade the last point I want to make on this is we have all llaman here all the guys are in the in the capital markets all this is gonna require a lot of money we have to integrate the financial markets all across our African countries we have you in charge of the African Securities Exchange Association and integrating the financial market there are only six maybe countries like controllable one trillion of the SS Nigeria South Africa there's a pigeon there is Morocco and in Kenya Kenya and one of those now if we have very deep capital markets we can mobilize capital to support infrastructure investments all across the continent so we have to build very very strong capital markets if we are going to be able to drive the kind of things that we've seen and I say all this because we don't want the African continent refrigerator area to be a market for others of course rules of origin and things like that will play a role it has to be a market where African companies can play they have access to the skills the technology the infrastructure but also the finance for them to be able to play I was in the car just few days ago with President Mohammad Eva on the emerging markets conference and we're talking about the Asian experience in Africa on how we imagine markets and I was saying that the key is if you look in Asia they have mega companies then they have small and medium-sized companies they connect Bordeaux of those days right in Africa if this trade open trade is going to really impact us we need some big mega conglomerates and make sure they have access to finance but we also make sure we're funding up and down we have to connect the small to the big so I asked the big one go up Africa has a lot of businesses that are coming up that can actually create a lot of jobs so we have to be deliberate is what I'm saying we cannot leave the African continent a free trade area to be some kind of a new state we must be deliberate on technology you must deliberate on infrastructure we must deliberate on how we help women and young people with financing structures and capacities to take advantage of this big thing to lift themselves out of poverty into wealth excellent now let's take a few questions gentleman over here in the lady over there Thanks I think a lot of things that have been said to actually make sense sorry he says I must introduce myself I'm I'm Peter my um the C of our mutual we operate in 13 in 13 countries on the continent it's it's actually fascinating that in this discussion we don't have the political leaders hmm because if we don't sort out some of the political issues all the things that we're talking about here are going nowhere how we make sure that all the countries start rising almost at the same level because if they are not the movement of paper is only going to be in one direction I mean people will actually follow the most evil where there is real economic growth and what are the political leaders saying Rob talked about the policy certainty we actually need underpinning this that certainty we actually talk about the ease of the movement of data but I mean if you actually look at the regulations if you look at the mobile termination rates just simple things like that if we turn sort those things out it actually becomes difficult so it actually requires governments to actually give up some of that sovereignty when it actually comes to even the management of data and the movement of data in the movement when how many times when you go to different countries do you have to carry a lot of other SIM cards I mean that's actually storing a store for life and lives and lastly the the movement the movement of people for as long as it is not easy to just move people the free trade area is not a reality and we actually see today with very young people in East Africa that are very very clever where it's actually much much cheaper for us to give solutions to Africans on the continent by operating from Kenya but try and move those young people from Kenya to Zimbabwe to South Africa it's a mission so we actually have to really be serious about the fundamental rules I mean all those things I don't think they can really function if I mean we can actually lend to anybody I mean when we operated is in the 13 countries but until we sort out some of those fundamental issues it's actually not easy and that's why I think it's important that the politicians actually talk about some of these things yeah well there are a few politicians in the room who are taking notes let's get to this lady over here we'll take a few and then we let the panelists take some answers thanks very much my name is rappelling and I've been an entrepreneur in the technology space for the last time 14 years or so I so no to throw as sort of a different lens on what it really means for entrepreneurs to really benefit I think from a single market um in Africa I think I'm Peter's president I'd seen it talked a lot about the funding and facilities that are be made available but I think there's a much bigger issue than funding per se but the ability to acquire customers and my view is that the cost of customer acquisition remains prohibitively high and I'm not sure to what extent the free trade sort of agreements really address it and what do I mean by sort of the cost of customer acquisition I really mean is there a place for entrepreneurs to be able to find engage in communicate with potential customers is it easy to be able to collect money from potential customers is it easy to be able to deliver goods and services to potential customers and I think there is some discussion around the movement of goods or in the free trade sort of agreement but I'm not so sure how we're having sort of the the initial two points and particularly cross-border payments I mean if we're not really solving that we can't begin to collect money and these are remain very high level ideas in terms of a single market and in terms of the first one how do we really connect and communicate with potential customers and most is it all sort of businesses I really still relying on sort of social media and Facebook which isn't a deep enough penetration we're not getting further in and perhaps there's a lot more room for collaboration between sort of startups and corporations because I do think that how large organizations have who have a large customer base have in some way organized the markets and helped cover some of the fragmentation and to the extent that they can provide sort of platforms the digital ecosystems and charge a fair toll to access these sort of markers would be critical for startups do you actually be able to hit scale and I'm not sure how much of that conversation is really happening and to the extent that we don't solve the cost of customer acquisition we keep saying we need more funding when in fact the real problem is that it's too costly to acquire customers okay thank you anybody else lady thank you my name is Brigitte mud super hi Debbie and I'm the president of the South African mining Development Association which is one of two many chambers in South Africa and also the chairperson of black Business Council on my left is the president of business unity South Africa we are literally representing all the South African business and we're very happy to hear all the you know mentioning that's made of out of South African business achievements however what I picked up in this presentation and as you know we also intake lots of in Parliament giving presentations and but for law committees in terms of legislative changes that can enhance business opportunities is initially I know when you were the head of the African Development Bank we tried to UM you are now the previous you were with them when you voted nominated I was we were busy during that time on the illicit outflow of capital which is a very unique and very important thing if the taxation cannot be accrued and collected by countries then you have a problem as you know our chamber was the first one to go to Parliament to say we will not under our watch and while we are doing business continue to do this illicit outflow of capital the transfer pricing eliminates all potential the government to be able to produce the road infrastructure the electricity and all the necessary essential services that people need to make business available in business productive and then also you know that Judge Dennis Davis Commission was then initiated created by Parliament pattern of Finance to look into it the African Development Bank now his president former president Becky who's looking into it and you you know all about it because you're also part of that initiative if we can correct that then at least it will help also from a government point of view but also another legislation that we are also looking into is this about the inability because you made a very important comment both mostarda Cena a mr. Gauthier about the inability of the manufacturing of the end product in Africa we are a producer of minerals okay um our he also is the head of an grow its president chairperson of the Anglicans Ashanti which is one of the big gold companies in Africa you know so you find that what we inherited from the old South Africa dude from Mandela's time we had to change the law and the law is the mineral important resources velmanette so you find out we inherited countries that would our companies that would export a lot of the minerals and yet africa is the number one in lots of minerals but we do not have a beneficiation we do not have industrialization we don't have hair factories so in the law we had a section 26 of the mining law and i'll just read two of the closest of section did face them the law says that every mineral there's going to be mined outside South Africa whoever Spooner was gonna ever gonna take that model to create the end product must then apply through the Minister of Finance the minister I mean the Minister of Mines Minister of Mines in consultation with the Minister of Trade and Industry because that's where beneficiation and factories come will then then go back to the country pet company and say why then why not here but the integrated approach in terms of how we're going to do it why is it that we are the only ones doing the assembling on a manufacturing affect of cars in South Africa and the tyres cannot be done the DRC and the seats cannot because of the rather and the seas cannot be done in Ethiopia because there's there's a lot of you know seat covering and all the others so they integrated approach in terms of looking at how Africa can do better now on lastly is the law in terms of how we can make it easier for you especially you said something there to do that when you wanted to go and create a database you find that the straight laws and stuff like that talk to us our chamber let us see how we can engage our ministries and when we go on these state visits how we can then make this these laws more you know better for for for trade to happen thank you we have half a minute for each one of you because the clock is ticking so let me start with Emanuel have a minute each one of you and then we'll wrap up thank you so much I might speak a little faster and there are a couple of things and the biggest point I wanted to make was to the Davos topic sounded really exciting as a young person but listening to a lot of what we've heard today a lot of the implementations sound like yesterday because young people were not Architects in one government representation were not architects in two negotiating with private sector so some of the things you're talking about on data and whether we need a date for us it sounds like yesterday's news financing we need trust in order to build trust we need to be given expertise we don't need a one-time financing we need a relationship where young people are continuously part of financing structures that fits today and tomorrow's market that we haven't envisioned legacy businesses are parents we are entrepreneurial by nature we're products of parents who have been hard working and this new world requires us to compete and be able to bring legacy businesses that are on the continent that have survived into a global infrastructure and framework and we're willing to do that if we're giving access and for a lot of what we're saying for these products to be innovative and be architectural in the globalization we need to have more dominant influence and space and labs to test out some of these ideas so instead of taxation how do we look at States capture for innovation because we're in an innovative continent and those are the kind of inputs that if young people are given an opportunity we can knock some of those doors and make Africa truly globally competitive we knee well back to my theme that the continent of free trade area is exciting and opportunity but we mustn't assume that volumes of trade because of growth will turn into real good lives for our people we must remember that Africa's economy is largely run as an informal economy where women are dominant these are not people who die away there are the people to shift into new better jobs so we need some standards we need a human rights framework these must underpin the growth of our common market Thank You Bernard yeah just to everyone on what when you said that we do believe as a long-term investor in the fact that sustainable growth can just come only if it's creating wealth for everybody and and help the whole society to make progress then my favorite topic is we've talked about difficulty to move Goods I I think that if we had to do what the China has done 30 or 40 years ago to become a world champion they they had that become the the factory of the world and invested tons and tons and billions of tons in concrete and steel I think that instead of having low-wage people in manufacturing sites and investing concrete and steels Africa can be a new winning continents if it it relies upon the smartness of his young people another low cost so smartness and and invest not in concrete and steel but in fiber and in data center and of course digital has some extremes situation the example you mentioned is just lacking regulation but globally it will be much much easier for Africa to go fast and grow with digital solutions Agra money yeah you know just on the we have to open up Africa bring all the worlds down there's no reason not to have fast label mobility all across the continent you know we look at the bank we look at you need visas to enter as an African 51% of the countries why currently now you only have about 20-25 percent that you don't need visas for tell you what for some of the countries 25% or 24% that you can actually get an arrival if after class we just melody code and Gotha he told me he never go to a place it won't let him in how will you have a good contender free trade area with our free mobility of people so my point is open up the African passport that was developed by the African you didn't go to get into the hands of everybody else so that we can actually move people the last thing I want to say just to close is that Africa cannot prosper by continuing to do raw materials we knew that before but the secret of the wealth of nations is very clear those nations who trade in raw materials are the ones that are poor those that actually trade in value-added products are the ones that I reach today 45% of all the intra-regional trade in Africa is still the same as raw materials and so we got to really I agree with mr. Matsui we have to industrialize we have to add value was the brain surgery making chocolates you know there's none right we've got to make sure that we have industrial centers that can allow us to take minerals all metals gas that we have and actually produce high-value products that's why we're going to grow our wells so my point really basically is Africa needs the technology it needs the enabling policy environment but Africa must really unlock what it has and turn it into wealth we can't be all trading the same thing we have to move into highly high value-added products thank you and last but not least Rob 60 seconds a few things integrated financial system is is absolutely imperative both at a corporate level but also at an individual level we need new solutions I think Mobile Money FinTech is gonna be a big part of the solution the the questions the lady was asking about access to customers ability to pay cross-border remittances I believe that mobile technology will solve many of these problems there are some missing pieces of infrastructure important pieces MTN and orange announced a joint venture to build more many interoperability hub in Abidjan called Mawali it's you a blockchain distributed ledger we have the balloon Melinda Gates Foundation providing support and funding this will make I think a massive difference and I think finally if you look at the the sophisticated mobile many systems that have been built in Africa whether it's in Pesa in Kenya the empty and systems launch systems it shows that Africa can provide solutions for the problems of Africa we just need will and determination and we all need to do what we can do instead of always looking for what somebody else must do wow I was meant to do a wrap-up as you can imagine we have no time and the wealth of this conversation was such that it would be unfair to try to do that I'm convinced nevertheless that if Africa gets its integration process right it would be good for Africa but it would be an even better news for the rest of the world this is why we all have a stake in making it work tear down the barriers except for illicit financial flows for that one we don't want to tear down the barriers and regulate smartly so that the 99% can also benefit from this integration thank you very much a big applause to our speakers [Applause]

Channel: World Economic Forum

Views: 141,453

Keywords: World Economic Forum, Davos, WEF2019, Davos 2019, politics, finance, economy, news, leadership, democracy, education, 4IR, technology, tech, AI, automation, work, future

Id: c26OV713-Do

Length: 61min 6sec (3666 seconds)

Published: Sat Feb 09 2019