World Economic Forum on Africa 2006

World Economic Forum on AfricaRaising the BarCape Town, 13-15 June 2007

Report

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Page 3

Preface

Page 4

Summary: Raising the Bar

Page 8

Building Capacity for Success

Page 12

Enhanced Investment

Page 16

Africa as a Global Partner

Page 20

A Competitive Future

Page 22

Pathways to Prosperity

Page 24

Raising the Bar in the WorkSpace

Page 26

Acknowledgements

Contents

2 | World Economic Forum on Africa


Preface

With growth continuing unabated and a determinedlybullish mood on the ground, the 17th World EconomicForum meeting in Africa provided an opportunity for theleaders of the continent to reflect upon achievementsand emerging prospects, but also on the obstacles toovercome to ensure a prosperous future for Africa.

Sustaining growth will require decision-makers to “raisethe bar” and aggressively tackle the existing as well aslooming capacity and skills deficits that are threateningto throttle the considerable progress achieved thus far.Cognizant of this risk, the World Economic Forum onAfrica exposed the emergence of a powerfulconsensus among key stakeholders to focus on thepriority areas for fostering sustained growth in Africa.These include infrastructure, education, healthprovision, agriculture and strong institutions. Wecommend the leaders that have added deeds to wordsby spearheading concrete initiatives in these criticalareas.

The meeting itself reached new heights: high-levelIndian and Chinese participation strengthened the nowannual review of the booming Africa-Asia partnership. Agood variety of appropriate session formats enrichedand supported our signature style of informalinteraction. And tough issues tackled in response torequests from leaders included climate change and areview of the current situation in Zimbabwe.

We are also pleased that the meeting continues toserve as a platform for leaders to reflect upon Africa’sposition in an increasingly globalized world where

opportunities such as new geopolitical constellationsmust be leveraged, while risks ranging from climatechange to terrorism must be mitigated by adding an“African voice” to the ongoing international debatesaround these issues.

We would particularly like to thank this year’s Co-Chairsof the World Economic Forum on Africa, who providedworld-class leadership and the support needed totackle the tough issues throughout the gathering. Thuswe extend our appreciation to Cynthia Carroll, ChiefExecutive, Anglo American, United Kingdom; LiRuogu, Chairman and President, Export-Import Bankof China; Tokyo Sexwale, Executive Chairman,Mvelaphanda Holdings, South Africa; and MalvinderM. Singh, Chief Executive Officer and ManagingDirector, Ranbaxy Laboratories, India.

This overview cannot aim to do full justice to the depth,diversity and buoyant tone of this year’s discussions inCape Town, but it will hopefully provide a taste of theresolve and vigour that emanated from the meeting’snearly fifty sessions, workshops and plenaries. Insteadof being a summary, this overview attempts to highlightsome of the aspirations, successes and concretepledges of the wide cross-section of leaders who tookpart in this event.

We are already looking forward to welcoming you tothe World Economic Forum on Africa in 2008 andcount on you to build on this year’s deliberations andturn promises into reality.

Haiko Alfeld

Director, Head of Africa


To frame their discussions, participants at the WorldEconomic Forum on Africa in Cape Town used SouthAfrican President Thabo Mbeki’s call at last year’smeeting for a focus on capacity building andimplementation. Planning ambitious projects andtaking in investments and aid money is one thing,actually getting things done and initiatives launchedand running is another.

Expectations for Africa among Africans and outsidershave risen significantly in recent years in part becausethe continent has recorded its best economicperformance in a generation. The African DevelopmentBank expects growth to approach 6% this year. Thereare other reasons for the renewed confidence andoptimism. Many countries have succeeded inresolving longstanding conflicts, trade with andinvestment from China have sharply increased, andthe international community has focused muchattention on Africa and its humanitarian challenges.Most important, however, is that Africans themselvesare taking action to create solutions to the persistentproblems they have faced such as poor governanceand to pressure each other to act.

Africa's GDP Growth

Source: IMF World Economic Outlook Database, April 2007

Sub-Saharan Africa Pacing the Continent's Growth

7%

6

5

4

2004 2005 2008F2007F2006

GD

P G

row

th

World

Africa

Sub-Saharan Africa

Africa’s momentum is building. “The right policies areworking,” said former Nigerian education ministerObiageli Katryn Ezekwesili, Vice-President, AfricaRegion, at the World Bank in Washington DC. But,she advised, the continent itself must raise the barand pursue an even more ambitious “internally driven”development agenda. Africa has to build on itssuccesses by bringing standards of governancehigher, deepening continental integration, spreadingmore widely the benefits of globalization, andredoubling efforts to confront the perpetual problemsof disease, hunger, illiteracy and civil strife.

The optimism and goodwill that greeted former UnitedNations Secretary-General Kofi Annan’sannouncement that he would lead the Alliance for aGreen Revolution in Africa (AGRA), a new coalitionaimed at finding practical ways to ease the burdens ofhard-pressed small-scale farmers and invigorate thelanguishing agricultural sector, stemmed from therecognition among participants and other stakeholdersin Africa that only such homegrown approaches canwork. “It will succeed because African leadersthemselves have committed to it; they haven’t justtalked,” said Mamphela Ramphele, ExecutiveChairperson, Circle Capital Ventures, South Africa.

Armed Conflict in Sub-Saharan Africa on the Decline

Source: Human Security Brief 2006

40

35

30

25

20

15

10

5

0

2002 200520042003

Num

ber

of c

onfli

cts

State-based armed conflicts, sub-Saharan Africa

Non-state armed conflicts, world

Non-state armed conflicts, sub-Saharan Africa

State-based armed conflicts, world

Summary: Raising the Bar

All of what we do has to be linked tobuilding the necessary capacity totake the continent away from poverty.

Thabo Mbeki, President of South Africa

“ “


“We want to talk about and celebrate our successes,”said meeting Co-Chair Tokyo Sexwale, ExecutiveChairman, Mvelaphanda Holdings, South Africa. Butat this crucial point in what looks like a sustainableAfrican boom, success cannot be taken for granted.“There are still huge areas that need reform,”Ezekwesili warned. “Let’s not be triumphant.”

Under the theme “Raising the Bar”, the programme ofthis year’s World Economic Forum on Africa wasdivided into five sub-themes. Participants made thefollowing key points during the meeting:


The need to build Africa’s capacity to absorbinvestment and aid and to implement its developmentplans efficiently was highlighted by South AfricanPresident Mbeki at the 2006 meeting. This priority wasthe starting point for discussions by participants thisyear.

• Building the capacity that will help Africans out ofpoverty must be the over-arching goal of everydevelopment agenda and initiative for the continent.Africa needs the capacity to maximize the benefitsof the investment, trade and aid pouring into theregion.

• Africa must also develop the capacity to implementregional approaches to problems that require suchsolutions. These include the lack of infrastructure,the threat of infectious diseases, climate change,hunger, the need to develop financial markets toease access to capital, and water supply, amongothers.

• Capacity building is needed in both urban and ruralareas, in both the public and private sectors, and inall sectors of the economy. The lack of skills shouldbe an urgent focus.

• Public-private partnerships will be essential forcapacity building. Also critical: good governancethat focuses on achieving results by solving specificproblems and not getting bogged down trying toaddress large and complex ones.

Enhanced Investment

Money available for Africa’s development is not inshort supply. Infrastructure and investment funds aremushrooming and there is no shortage of interest frominstitutional and other investors. The focus now is ondoing more with finance, in particular using funds toboost private sector participation.

Infectious Diseases Still a Major Cause of Death in Africa

Source: World Health Organization

35%

30

25

20

15

10

5

0

Malaria

HIV/AIDS

TB

Total AfricaTotal World Sub-Saharan Africa

Per

cent

age

of a

ll d

eath

s

The world needs Africa as much asAfrica needs the world.

Klaus Schwab, Founder and Executive Chairman,World Economic Forum

“

“


• There no longer appears to be the broad view thatthe whole continent is a high-risk region. The chiefobstacle today is a lack of bankable projects, thelimited number of financial instruments, capacityconstraints, and a lack of liquidity in local markets.

• There is concern that many of Africa’s financialmarkets are not modern enough to cope with thegrowing demand. This is prompting Africancompanies to look to international exchanges toraise capital.

• Africa’s ability to integrate its markets is hamperedby the fact that its monetary systems remainfragmented. Africa must regionalize to help make itssmall economies more globally competitive.

• There are other key challenges to overcome,including the aversion of the private sector toinvesting in infrastructure projects and the lack ofskills.


Africa’s global profile has been given a new sheen bythe interest taken in the continent by emergingeconomic superpowers, China and India. The G8countries have, at the same time, been accused offailing to give the continent the support they havepromised.

• China and India have approached Africa differentlyfrom the West, seeking partnerships andcooperation rather than the neo-colonial andpaternalistic relations many African countries believecharacterize relations with western nations. Africahas been a major beneficiary of China’s voraciousappetite for raw materials.

• China says that the closer partnership between Asiaand Africa allows both regions to better address thechallenges of globalization.

• There is rising scepticism in some countries andamong some sectors that China is underminingAfrican business interests with cut-price contractsand cheap goods and that Chinese investors do notadhere to regulations on mining safety andintellectual property protection.

• Africa must confront global challenges such asclimate change. But to do so and to participatemore fully in the global economy, the continent mustdeepen its regional links and increase intra-Africancommerce.

Globalization without the activeparticipation or involvement of Africais neither complete nor fair.

Li Ruogu, Chairman and President, Export-Import Bank ofChina; Co-Chair of the World Economic Forum on Africa

“ “Some of Africa’s markets are so small.Every country has different regulationsand requirements for the sameproduct. There is no stability in policy.If we can get a larger market andplace in which to operate, theeconomies of scale and the benefitsto the customer can be substantiallylarger.

Malvinder M. Singh, Chief Executive Officer and ManagingDirector, Ranbaxy Laboratories, India; Co-Chair of the WorldEconomic Forum on Africa; Young Global Leader

““

7 | World Economic Forum on Latin America


Africa’s competitive performance as measured by thelatest World Economic Forum Global CompetitivenessReport indicates that despite considerable progressthe continent must further raise the bar. To do so willrequire focusing on enhancing human capital, deepeningregional integration, fostering energy innovation andincreasing the global demand for African products.

• Africa must reinvest the gains of recent years in itsmost precious resource – its people. Whileeducation and skills training are important, theurgent priority must be to create jobs.

• African countries need to find ways to meet thecontinent’s growing demand for energy. To do somay require the development of alternative sourcessuch as biofuels which, if fully harnessed, could alsobecome a new source of export earnings.

• Regional integration is critical. From air travel tomobile phone use, Africa must focus on trade andinvestment facilitation and lowering barriers to doingbusiness on a regional basis.

• To promote global demand for their products,African business has to build the Africa brand.


While most Africans are optimistic about their future,as the economic fabric of the continent changes –particularly through urbanization – governments,businesses and civil society must forge partnershipsto ensure that reality matches aspiration.

• A key challenge for African development is to unlockthe potential of the continent’s new urban dwellersby further developing technologies such as mobiletelephony that allow them to participate in themarket through increased access to financialservices.

• Another key priority is to provide fast-growing citieswith greater and more reliable access to electricity.

• It is crucial to improve the access of Africans tohealthcare. Of particular urgency is the need toscale up partnerships to combat HIV/AIDS, malariaand tuberculosis.

• To consolidate Africa’s socio-economic gains, effortsare needed to increase public ownership ofgovernment. Initiatives to improve governance, suchas the launch of an index of governanceperformance and programmes to combatcorruption, are essential.

Companies must commit themselvesto good governance, including Chinaand India, as they come into Africa sothese relationships can be exploitedmaximally for development.

Tokyo Sexwale, Executive Chairman, Mvelaphanda Holdings,South Africa; Co-Chair of the World Economic Forum on Africa

“ “What attracts us to Africa and whatwill propel us to more activities andinvestment? First is willingness in thecountries where we are to engage andact as partners. It’s all aboutpartnerships and business partneringwith the community, stakeholders andgovernments.

Cynthia Carroll, Chief Executive, Anglo American, UnitedKingdom; Co-Chair of the World Economic Forum on Africa

““


At last year’s World Economic Forum on Africa, SouthAfrican President Thabo Mbeki told participants thatan urgent priority for Africa is to develop the ability toimplement its ambitions. The continent, which hasbeen growing at unprecedented rates, has managedto resolve a number of lingering conflicts and to createa more attractive business climate, he said. There isfresh enthusiasm about Africa among investors andrenewed zeal among the international community toaddress the persistent problems of poverty anddisease. There are multiple Africa initiatives under way,from infrastructure projects to HIV/AIDS preventionschemes. “In reality, we have to implement programmesto which we have already agreed,” Mbeki said lastyear. “Basically our challenge is our capacity toimplement those plans. The capacity to implementstands at the centre of our challenges.”

The president’s call for capacity building was thestarting point for this year’s meeting. At the openingplenary, Mbeki reiterated his concerns about theconstraints on growth that result from the lack ofcapacity. “All of what we do has to be linked tobuilding the necessary capacity to take the continentaway from poverty,” he said. Both hardware andsoftware are needed. Building schools to improveeducation will do little if the roads and transportsystems are not there for students to get to thefacilities. Pouring investment into infrastructure willhave little impact if poor governance and weak rule of

law mean that the money is wasted or does not getdeployed correctly. The benefits of constructing powerplants will be sharply reduced if an economy does nothave the workforce with the skills to operate andmaintain them properly.

A further complication is that Africa, like other areas inthe world, increasingly needs regional solutions toproblems. Countries have to collaborate to addresssuch challenges as the continent’s infrastructuredeficit, the threat from infectious diseases, hunger andfood shortages, water supply and climate change.But, as Mbeki pointed out, Africa’s “regionalcommunities don’t have the capacity to designregional projects even though the concepts are there.”Regional institutions are simply not strong enough.

Capacity has to be built at all levels, with all sectors ofsociety contributing. Consider the recently launchedcampaign for a “Green Revolution” for Africa. At CapeTown, former United Nations Secretary-General KofiAnnan announced that he would lead the Alliance fora Green Revolution in Africa (AGRA), a new coalitionaimed at finding practical solutions to “the majorcause of our continental poverty – an agricultural


In the last 50 years, governance inAfrica has gone downhill and is in badshape. The question we need to askis: how do we get out of thissituation?

Mo Ibrahim, Chairman, Mo Ibrahim Foundation; Chairman,Celtel International, United Kingdom

“ “We need the capacity to be able tonegotiate with the private sector.

Ngozi Okonjo-Iweala, Distinguished Fellow, Global Economyand Development, Brookings Institution, USA

“

“

2010 on Track?

There are extremely high expectations for the 2010 FIFA World Cupin South Africa. But is 2010 really a Holy Grail or silver bullet? Andcan South Africa deliver on the high expectations?

“The World Cup is here in South Africa to stay,” declared DanielAlexander Jordaan, Chief Executive Officer, 2010 FIFA World CupOrganising Committee, South Africa. “Local companies haveinvested more than US$ 700 million – which is higher than theamount invested locally in the Korea-Japan tournament. Surelythese companies know what can be achieved,” he said in asession assessing South Africa’s progress.

Jordaan pointed out that FIFA owns the World Cup – and it is arisk-averse organization. If it did not trust South Africa’s ability tohost the event, it would not have chosen the country.

Rob Hughes, Sports Columnist, International Herald Tribune,France, took issue with this view: “It is South Africa’s World Cup;you should take ownership of it. Don’t rely on [FIFA head] SeppBlatter to provide a World Cup. He can’t, you can,” said Hughes.

South Africa is not going overboard in its expectations, said TokyoSexwale, Executive Chairman, Mvelaphanda Holdings, SouthAfrica, and a Co-Chair of the World Economic Forum on Africa.“Not only will we meet expectations, we will surpass them. This isthe single biggest capital injection into one country under asporting code. There will be huge legacy benefits. Also, it is achance to maximize tourism benefits like no other.”

Asked if World Cup construction is on track, Norbert Jorek, GroupExecutive Director, Murray & Roberts, South Africa, acknowledgedthat “time is tight”. He said: “We have three years to complete the2010 building programme, and we will need them. We must fightcomplacency. We have to stop fiddling about with specificity ofdesigns. If you want marble floors, put them in after 2010.”

sector that has languished but is now poised to be somuch more productive and dynamic.” AGRA’sobjective is “to dramatically increase the productivity,food security, incomes and livelihoods of small-scalefarmers, many of whom are women.”

Literacy on the Rise Across Most of the Continent

Source: World Bank World Development Indicators

1990 20061990 2006

90

80

70

60

50

40

30

20

Morocco SouthAfrica

WorldTunisiaGhana EgyptAlgeriaSenegal Sudan Sub-SaharanAfrica

Kenya

Ad

ult

liter

acy

rate


Politicians should no longer beallowed to get away with saying thatdemocracy should be different inAfrica. International standards have toapply to Africa even though they mayhave to be defined in a way thatmakes them applicable to Africancountries. Leaders can no longer hidebehind the notion of the uniqueness ofAfrica.

Mamphela Ramphele, Executive Chairperson, Circle CapitalVentures, South Africa

““


Few would doubt that a Green Revolution wouldindeed address poverty in Africa at its core. But forthe campaign to succeed will require more than justhigh-yielding crops and modern biotechnology. Whatwill be needed are improvements on a number of frontsincluding infrastructure, water management, financialservices, market access and distribution, and tradefacilitation. Said Dinnah Rissle Kapiza, an agro-dealerfrom Malawi: “Small-scale farmers need to find markets.We need to strengthen capacity at the communitylevel.” That means educating farmers, Armando EmilioGuebuza, President of Mozambique, told participants.“Besides using better seeds, more water and irrigation,we need to train people,” he explained. “Theknowledge students get in school may not be relevant.That is why our emphasis is on technical training.”

Africa’s skills shortage is a major constraint on growth.Kapil Sibal, Minister of Science and Technology andEarth Sciences of India, warned that to retain skills,African countries must implement policies that offerpeople employment opportunities and attract citizensabroad to return home. An estimated 20,000 Africanprofessionals have emigrated from the continent everyyear since 1990. “We need more skills in Africa,” saidGérard Wolf, Senior Executive Vice-President,International Operations, Electricité de France (EDF), ina session on the energy sector. “We need engineers.We need people to run plants. We need people. Wedon’t have enough Africans.”

Building capacity is not simply the government’s job.Public-private partnerships are critical, given thelimited resources and skills of government. Businesscan help government overcome capacity gaps,particularly in finance and trade, said Richard Samans,Managing Director, Centre for Public-PrivatePartnerships, at the World Economic Forum. Often thepublic sector is ill equipped to forge mutually beneficialalliances with business, much less execute them. “Thepublic sector needs to build the capacity to get intosuch partnerships” in the first place, reckoned Mbeki.“There are many examples of such partnershipsacross the continent that failed because they were notequal.” Added former Nigerian finance minister NgoziOkonjo-Iweala, now Distinguished Fellow, GlobalEconomy and Development, Brookings Institution,USA, “We need the capacity to be able to negotiatewith the private sector.”

In a way, the great endeavour to deliver Africa frompoverty and pave the way to prosperity is not unlikeSouth Africa’s preparations for the 2010 FIFA World

Small-scale farmers need to findmarkets. We need to strengthencapacity at the community level.

Dinnah Rissle Kapiza, Agro Dealer, Malawi

“ “

We need people with a can-do attitudewho will break through barriers andget the job done.

Ng’andu P. Magande, Minister of Finance and NationalPlanning of Zambia

“ “

Klaus Schwab, Founder and Executive Chairman, World Economic Forum; Tumi Makgabo, Manager, Communications, 2010 FIFA World Cup

Organising Committee, South Africa; Armando Emilio Guebuza, President of Mozambique; Dinnah Rissle Kapiza, Agro Dealer, Malawi

Cup but on a grand, continent-wide scale. For theevent to be a success, many different factors andcomponents must come together – the infrastructure,the marketing, the community support, the coordinationamong host cities, the security arrangements and, ofcourse, the fans. For Africa to achieve the kind ofprogress that much of South and East Asia have in thepast two decades, it must address multiple deficienciesand bring together a host of essential ingredients.

Yet as Mbeki advised in the closing plenary, it isimportant that African countries focus on specificproblems and not try to take on ones that are too bigor too complex. “If you deal with one big lump, it issomething you can’t chew,” he said. Africa will requiremany blueprints for action that will vary acrossregions. The success of these efforts will depend inlarge part on the quality of governance in both thepublic and private sectors. For this reason, theinitiative of the Mo Ibrahim Foundation to launch agovernance index to assess the quality of Africa’sleaders is a significant step in promoting goodgovernance and accountability.

As with the World Cup, Africa has its die-hardsceptics, critics who persistently doubt that thecontinent can build the capacity it needs to succeedin the long term. “There is little we can do about Afro-pessimism,” meeting Co-Chair Tokyo Sexwale,Executive Chairman, Mvelaphanda Holdings, SouthAfrica, conceded in a session on the World Cup. Hemight as well have been giving all of Africa advice asthe continent faces the long-term challenge ofmastering the globalization game: “We can still changeperceptions with effective communications. Butactions speak louder than words. We must just showpeople what we can do.”


We are often asked why we don’t justincrease capacity to deal with the[energy] problem. But we don’t havecapacity to increase capacity.

Carlos Poñe, Chief Executive Officer, ABB, South Africa

“ “

We need to build strong institutions.We need more partnerships betweenthe public and private sectors tominimize the risks.

A. Michael Spence, Professor Emeritus, Stanford University,USA

“ “ We need more skills in Africa. Weneed engineers. We need people torun plants. We need people. We don’thave enough Africans.

Gérard Wolf, Senior Executive Vice-President, InternationalOperations, Electricité de France (EDF), France

“ “


There is no shortage of investor interest in Africa,despite a lingering perception of high risk. However,the level of risk depends very much on the country inwhich the investment is made and what is beinginvested in, which allows significant risk mitigation.There no longer appears to be the broad view that thewhole continent is a high-risk region. Investors areseeing high returns on investments and there isincreasing interest in opportunities on the continent.The problem is not a shortage of money; it is a lack ofbankable projects, a lack of financial instruments,capacity constraints and a lack of liquidity in localmarkets.

Private Capital Flowing into Sub-Saharan Africa

Source: World Bank

Both debt and equity flows are returning

$40

35

30

25

20

15

10

5

0

-5

8%

7

6

5

4

3

2

1

0

-1

1998 2003 2005

Net private debt flowsFDI inflows (2-year rolling average)

Portfolioequity

inflows

FDIinflows

2002200120001999 2004

Priv

ate

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FDI inflow

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Some of Africa’s 19 stock exchanges appear to begearing up for increased demand both locally and fromabroad. But there is a concern that many of them arenot modern or sophisticated enough to cope with thegrowing demand. In fact, a poorly resourced exchangemay rather be a deterrent to investment. South Africaremains by far the largest and most sophisticatedexchange in Africa, accounting for about 90% of thecontinent’s liquidity. Its market capitalization of morethan US$ 700 billion is well ahead of the next biggestcontenders – Nigeria, with a market capitalization ofUS$ 62 billion, and Morocco at US$ 58 billion. Similarly,institutional assets under management in Africa includeUS$ 200 billion in South Africa, compared to US$ 4billion in Botswana and just US$ 400 million in Zambia.

Capital markets in some countries are growing – Nigeriahas seen capital market growth of 71% over the pastfive years – while some of the smaller exchanges,such as those in Botswana and Zambia, havedeveloped world-class systems. Bond markets arealso being developed in a number of countries. Butoverall, the exchanges remain fragmented, with differentoperating systems, little information sharing and poorliquidity. A paradigm shift is required to an era ofgreater openness, linkages and innovation to ensuretheir success.

Enhanced Investment

Africa is the place to be.

Thierry Tanoh, Director, Africa Department, InternationalFinance Corporation (IFC), Johannesburg

“

“

I sometimes think we plan to deathand we are not good at the execution.

Maria Ramos, Group Chief Executive, Transnet, South Africa

“

“


The path to prosperity in Africa beginsat the fields of African farmers.

Kofi Annan, United Nations Secretary-General (1997-2006)

“ “

No African country individually can becompetitive in the next 20 yearsbecause they are too small.

Stefano Manservisi, Director-General, DG Development,European Commission, Brussels

“ “

Governments must stop thinkingnationally and start thinking regionally.

M. G. Qhena, Chief Executive Officer, Industrial DevelopmentCorporation (IDC), South Africa

“

“

According to Nicky Newton-King, Deputy Chief ExecutiveOfficer, Johannesburg Stock Exchange, South Africa,and a Young Global Leader, if African exchanges donot become more liquid and more innovative, largeAfrican companies may move to internationalexchanges. There are already 30 to 40 Africancompanies listed on the London Stock Exchange,with the local economies losing out on the benefits.

South Africa has called for African exchanges tooperate from the same platform, offering theirs, whichis also used by the London Stock Exchange, as apossibility. They have responded to fears that this willlead to South Africa’s domination of smallerexchanges by saying it will merely be a technical issueand will offer benefits to both the exchanges and toinvestors, who would have easier access to Africanmarkets.

Africa’s ability to build integrated markets is beinghampered by the fact that its monetary systemsremain fragmented, mostly because of sovereigntyconcerns. This is out of step with the mantra ofregionalization as the answer to Africa’s problems ofsmall markets and uncompetitive economies. Theemphasis on regionalism is also a focus ofinfrastructure funding in Africa, as regional fundingmeans greater spending efficiencies, the provision oflinked infrastructure across borders and a sharing ofrisk. Low savings levels remain a problem in Africa,affecting the ability to fund development domestically.However, plans are under way to leverage Africanpension funds, estimated to be worth US$ 160 billioncollectively, to fund infrastructure.

Stefano Manservisi, Director-General, DG Development, European Commission, Brussels; Marilou Jane Uy, Sector Director, Africa Finance and Private

Sector Development Department, World Bank, Washington DC; Trevor Manuel, Minister of Finance of South Africa; Lumkile Mondi, Executive Vice-

President, Professional Services, and Chief Economist, Industrial Development Corporation (IDC), South Africa; Li Ruogu, Chairman and President,

Export-Import Bank of China, and Co-Chair of the World Economic Forum on Africa


Foreign funding for infrastructure and developmentcontinues to increase. Indeed, the EuropeanCommission announced at the World EconomicForum on Africa that it will inject 6 billion euros intoregional infrastructure projects over the next six years,while the International Finance Corporation (IFC) saysit plans to increase spending in Africa to takeadvantage of strong commodity prices and fewerconflicts on the continent. “Africa is the place to be,”declared Thierry Tanoh, Director of the AfricaDepartment at the IFC.

However, there are still concerns related to thechallenge in getting infrastructure projects to thebankable stage and to the private sector’s riskaversion in infrastructure projects. Another critical areais a lack of skills – the continent simply does not havethe human resources capacity to drive large projects.“We are often asked why we don’t just increasecapacity to deal with the problem. But we don’t havecapacity to increase capacity,” said Carlos Poñe, ChiefExecutive Officer, ABB, South Africa.

Skills shortages and institutional capacity constraintsare also affecting countries’ ability to absorb largeinvestments. As Colin Coleman, Managing Director,Goldman Sachs International, South Africa, asked,“Do countries such as Nigeria, Kenya and Angolareally have the legal and regulatory systems to handledeals of this size?” To illustrate his point, he was citingseveral of the large deals recently concluded in SouthAfrica, such as that between UK banking giantBarclays and South Africa’s Absa banking group.

While South Africa is the biggest investor in Africacurrently, there are calls for more investment to flowfrom the economic powerhouse to the rest of thecontinent. The South African government has relaxedexchange controls on investment targeted at thecontinent in a bid to encourage such investmentflows. This is allowing large South Africanmultinationals to increase their African investments.For example, mining conglomerate and Africa’s largestcompany, Anglo American, announced at the WorldEconomic Forum on Africa that it would be puttingUS$ 3.5 billion in new investments into Africa over thenext five years.

Mobile phones are 'power tools' forbanking the unbanked.

Caleb M. Fundanga, Governor of the Bank of Zambia

“

“

South Africa's success in the financialsector is to get services extended tothe poorer communities.

Trevor Manuel, Minister of Finance of South Africa

“ “


Energy Poverty Alliance

The World Economic Forum has launched a privatesector-led initiative to bring energy to more people in sub-Saharan Africa – three-fourths of whom do not haveaccess to electricity. The new Energy Poverty Alliance willdeliver business expertise and best practices to reduceenergy poverty in the region, which has the lowestelectrification rate in the world.

More than 70,000 people in Lesotho and the DemocraticRepublic of Congo are set to receive electricity in a pilotproject run by the Alliance’s three initiating partners,British Columbia Hydro and Power Authority (Canada),Eskom (South Africa) and Vattenfall (Sweden). The threeare Industry Partners of the World Economic Forum.

“The joint solution of using alternative sources ofrenewable energy, expanding the national and regionalgrids, and using innovative, cost-effective technologieswill contribute to more individuals, industries andbusinesses gaining access to electricity,” said Steve J.Lennon, Managing Director, Resources and Strategy,Eskom, South Africa.

The Development Bank of Southern Africa (DBSA) willhost the Energy Poverty Alliance Management Unit(EPAMU) in Johannesburg, and operations will start on 1September 2007.

“It is a milestone for the World Economic Forum to haveDBSA as a partner of the Alliance. This provides a goodplatform to link international business capability with localcommunity needs, to develop a brand for electrificationprojects and help develop financing mechanisms,” saidChristoph Frei, Director, Head of Energy Industries at theWorld Economic Forum.

Africa Conversation

One month before the World Economic Forum on Africa,the Forum created an Africa Conversation blog andinvited people around the world to contribute ideas andquestions for a special session at the meeting in CapeTown. Fully incorporating the spirit of Web 2.0, more than50 comments and questions were received via the site,e-mail, SMS, voicemail or videos uploaded to YouTube.

The questions were put to the leaders participating in thesession, with the answers filmed and reposted on theInternet. The result was a conversation betweenparticipants, panellists and concerned global citizens.

Responding to a question concerning the recent Nigerianelection, Mo Ibrahim, Chairman, Mo Ibrahim Foundation,and Chairman, Celtel International, United Kingdom,commented that the main problem in Africa is poorgovernance.

A posting from Russia asked what benefits Africa canderive from international trade. Firmino Mucavele, ChiefExecutive, NEPAD Secretariat, South Africa, replied thatthe continent’s first priority is to grow intra-African tradeand remove the high transaction costs between individualcountries. "Even if an integrated global trade framework isnot yet working properly, Africans should still be able totrade easily among themselves."

Read other questions and watch leaders’ responses atforumblog.org/africaconversation

During the Africa Conversation



Africa’s global profile has been significantly enhancedby the keen interest taken in the continent, primarily inits raw materials, by China and India. The emergingSouth-South partnership has caused concern amongthe continent’s traditional trading partners in Europeand America, who have done business on thecontinent on their own terms, unchallenged, for manyyears. These relationships are under scrutiny in light ofboth the new South-South trading relations and of anew assertiveness by Africans themselves in settingtheir own development agenda.

Countries such as China and India have approachedbusiness with Africa differently from the West, seekingpartnerships and cooperation rather than the neo-colonial and paternalistic relations many Africancountries believe they have with Western nations.China’s voracious appetite for raw materials haschanged global trading patterns, and Africa has beena major beneficiary. The quest for raw materials hasbeen accompanied by increasing aid and trade withAfrican countries as well as the financing andimplementation of large infrastructure projects.

Africa's Exports to China Booming

Source: IMF

100%

80

60

40

20

0

2002 2006*

* non-seasonally adjusted full-year based on data through 3Q2006

2003 2004 2005

Though China's trade represented less than 10% of Africa'sexternal trade for the first three quarters of 2006

Yea

r ov

er y

ear

grow

th in

exp

orts

Exports to China (incl. HK)

Exports to world (x-China)

$19 billionthrough 3Q2006

$184.5 billionthrough 3Q2006

South African Minister of Trade and Industry MandisiMpahlwa claimed that those questioning the value ofAfrica’s relationship with Asian giants are to be foundamong the continent’s traditional trading partners. Hesaid Africa should not be questioned by the rest of theworld about its trading relationships, although hecautioned that value addition should be encouraged.Mpahlwa also suggested that African countries shouldnot wait for India and China to create theopportunities for them but should be proactive aboutgetting the relationship on a footing that would allowthem to derive maximum benefit from it. The ministersaid South Africa, currently the biggest investor inAfrica, had faced the same concerns from Africancountries as are being raised now about India andChina when its companies moved into the rest of thecontinent after 1994. “The fact that there were somenegative impacts doesn’t take away from theinvestment made in new capacity in Africa and thenew opportunities created,” he said.

China says it is seeking a partnership with Africabased on cooperation and friendship. “It is of greatsignificance for Asia and Africa to forge closerpartnerships so we can better address the challengesof globalization,” Li Zhaoxing, Foreign Minister of thePeople’s Republic of China from 2003 to 2007, toldparticipants, noting that the 800 Chinese companiesoperating in Africa are improving the lives of Africans.

There is, however, a rising tide of resistance in somecountries and businesses to the way China isundermining African business with cut-price contractsand cheap goods as well as to its lack of regulation interms of mine safety and in intellectual propertyissues. There are concerns among Africans that thecontinent will emerge from this new relationship adecade down the road and find it has, once again,

I don’t see why there should bequestions about a relationship that isgrowing between Africa and India andChina, or any other country for thatmatter.

Mandisi Mpahlwa, Minister of Trade and Industry of SouthAfrica

“ “


had its natural resources plundered by foreignsuperpowers with little value added along the way,thus repeating the much-criticized pattern of thecolonial and post-colonial era. “We face a challengeon the African continent that we have faced before –dealing with an energetic superpower, a highlysophisticated nation,” said Stanley Subramoney,Deputy Chief Executive Officer,PricewaterhouseCoopers, South Africa. “We are againin danger of swapping the family silver for presidentialpalaces and the like. The race is on for commoditiesand resources – are we sophisticated enough to dealwith this?”

Other risks for Africa from this relationship include thelack of diversification and industrialization, which limitsthe continent’s ability to exploit the relationshipmeaningfully, and the fact that any economicslowdown in these countries, notably in China, willhave a major impact on commodity prices and, inturn, on Africa’s economic growth. Meeting Co-ChairTokyo Sexwale, Executive Chairman of MvelaphandaHoldings, urged India and China to adhere tocorporate governance principles in their dealings withAfrica. “India and China will have to behave in amanner that is seen to be far removed from theaccusations made about our traditional partners,” hesaid, citing colonialism, financial imperialism andpaternalism.

Questions have been raised about the ways in whichAfrican countries should react to the risks posed byglobal developments. The continent remainsparticularly exposed to global risks for variousreasons, including its continuing dependence on rawmaterials and related vulnerability to price shocks,poverty, weak democratic processes, corruption, theslow movement towards creating regional efficienciesand a serious lack of skills and capacity.

A risk commonly raised in relation to Africa is that ofglobal warming and climate change. Although Africa’sgenerally low levels of industrialization mean it is not akey contributor to changing climate patterns, thecontinent is likely to be the worst affected by thephenomenon. African governments do not appear to

You cannot develop a continentwithout energy. Africa needs to take apart in the oil business.

Abdoulaye Wade, President of Senegal

“ “ There is increasing evidence thatAfrican governments are keeping thepromises they made to the G8. Nowthe other side must come throughwith their promises.

Temitope W. Oshikoya, Director, Development ResearchDepartment, African Development Bank (ADB), Tunis

“ “

Are the Millennium DevelopmentGoals some distant yardstick or areAfrican governments working toachieve them?

Zohra Dawood, Executive Director, Open Society Foundationfor South Africa

“ “


be prepared for the challenge, either in terms ofmitigating the risks emanating from it, such as foodand water scarcity, or in terms of taking advantage ofthe opportunities the situation presents. These includethe development of biofuels on Africa’s vast tracts ofunused agricultural land, and carbon trading. Thereare concerns that the continent’s reaction to climatechange will eventually be one of crisis management,particularly in addressing new frontiers of conflict inthe battle over ever-reducing resources.

The G8 remains a challenge for Africa, given thesignificant aid dependence of most countries, andstands accused of not keeping the promises it hasmade to African presidents at successive meetings.These include pledges to increase aid and to provide

Africa's Vulnerability to Climate Change

Source: Maplecroft

MediumLow

Extreme

No data

High

South Africa

Morocco

Nigeria

AlgeriaEgypt

Vulnerability to effects of climate change

other support to the continent in return forimprovements in governance. “There is increasingevidence that African governments are keeping thepromises they made to the G8,” said Temitope W.Oshikoya, Director of the Development ResearchDepartment at the African Development Bank (ADB).“Now the other side must come through with theirpromises.”

In terms of commercial linkages with the globaleconomy, Africa still has a long way to go and themove towards creating bigger markets throughregionalism and increased intra-African trade is movingslowly. Countries remain fragmented and inward looking,with limited progress towards the harmonization ofoperating requirements across borders. Africancountries have been urged to do more to add value totheir resources. In turn, western nations need toaddress the tariff and non-tariff barriers to Africa’sexports in developed country markets.

Africa's Trading Partners

Source: IMF Direction of Trade Statistics

Trade shifting away from Europe

80%

60

40

20

01990

* EEC consists of Benelux countries, Denmark, France, Germany, Greece, Ireland, Italy, Portugal, Spain and UK

2005

Per

cent

age

of A

fric

a's

exte

rnal

tra

de

EEC*

Other 31.7%Other 27.6%

US

China (incl. HK)

Japan

Li Ruogu, Chairman and President, Export-Import Bank of China, and Co-Chair of the World Economic Forum on Africa; Kapil Sibal, Minister of

Science and Technology and Earth Sciences of India; Li Zhaoxing, Foreign Minister of the People's Republic of China (2003-2007); Mandisi

Mpahlwa, Minister of Trade and Industry of South Africa; Tokyo Sexwale, Executive Chairman, Mvelaphanda Holdings, South Africa, and Co-Chair

of the World Economic Forum on Africa


Climate Change

In direct response to demand from members of the World Economic Forum’s Africa community, climate change was a keyelement of the 2007 programme in Cape Town. Africa will be the hardest-hit continent by global warming but it can play astronger role in developing local strategies for adaptation and in shaping the international policy debate on mitigation.

The past year has seen a proliferation of documentaries and academic reports on climate change and its effects – thestrategy of this year’s meeting was to introduce some of the key findings of this research and, over three sessions in CapeTown, help leaders ask the right questions and develop a strategy for the way forward.

The first session – one of the first of the meeting – was the Climate Change Update session. Discussion leaders includedauthors of the UN’s Intergovernmental Panel on Climate Change (IPCC) report, which declared Africa will be the worst hit byclimate change in the future. Discussions ranged from the risks to agriculture from changing patterns of rainfall, to risks toinfrastructure (and populations) in coastal areas, and the risk that global warming will encourage the spread of disease.

A high-level private meeting held by the Disaster Risk Reduction Project of the World Economic Forum in collaboration withthe World Bank and UN specifically sought to tap the expertise of the African private sector and to ask how adaptationcould be improved through public and private action. In breakout groups, leaders brainstormed a potential private sectorcontribution in the areas of water and agriculture, health, and risk management.

Finally, Nik Gowing of the BBC moderated a learning-by-doing WorkSpace session in which leaders were asked to “get agrip” and make a first draft of a coordinated response. This began with a group learning experience in which participantsshared thoughts and advice with some of the world’s top experts on climate change and its impacts. Together theyexplored the urgency of the issue, building up an understanding of the impact of an increase in temperature on Africa, itspeople, communities and businesses. They continued their breakout discussions by looking at the most critical impactareas and where action can be taken to make the biggest difference. The facilitator then pushed participants to considernew ways to approach the challenge and urged them to take what they learned in Cape Town back to their communitiesand businesses, thus seizing the opportunity to make Africa a world leader in managing, mitigating and adapting to climatechange.

We hope that this is just the beginning, and look to Africa’s leaders to pioneer local partnerships and act internationally tohelp develop appropriate frameworks to reduce carbon emissions going forward, while sustaining economic growth andpromoting global equity.



While African countries represent only two out of thetop 50 countries in The Global CompetitivenessReport 2006-2007 of the World Economic Forum, theyrepresent 20 out of the bottom 25. For the continentto sustain growth, which in 2006 topped 5.5%, itmust raise the bar on competitiveness much further.

But competitiveness, as defined by the Forum, doesnot involve merely competing for world market sharefor African products. According to the Report, if Africais to compete, countries must put in place “institutions,policies and factors that set the sustainable currentand medium-term levels of economic prosperity”. Overthe course of this World Economic Forum on Africa,participants outlined several focus areas, includingenhancing human capital, fostering energy innovationand integrating regionally, while increasing globaldemand for African products.

Competitiveness of African Economies

Source: World Economic Forum

2nd quartile 3rd quartile1st quartile 4th quartile

More competitive Less competitive

Competitiveness ranking among African nations

Tunisia, South Africa and Mauritius are the continent’s most competitive economies

Tanzania

Nigeria

Namibia

Kenya

Gambia

Cameroon

Benin

Tunisia

South Africa

Morocco

LibyaEgypt

Algeria

Zambia

Uganda

Mauritania

Madagascar

Lesotho

Zimbabwe

Mozambique

Mauritius

Mali

Ethiopia

Chad

Burundi

Angola

BurkinaFaso

Malawi

Botswana

Participants called on African public and private sectorleaders to ensure that the gains of the previous yearsare re-invested in the continent’s most preciousresource – its people. “The nature of our growth mustensure that everyone in our society is a stakeholder,”said Ngozi Okonjo-Iweala, Distinguished Fellow,Global Economy and Development, BrookingsInstitution, USA, and Minister of Finance and theEconomy of Nigeria from 2003 to 2006. “Even if wereach 10% growth, issues such as unemployment andhome-ownership will still be paramount.”

Education and skills training are important, but theregion will lose much of its talent unless qualityemployment opportunities exist at home. “The humancondition does not allow people to live off ofhandouts,” said Trevor Manuel, Minister of Finance ofSouth Africa. “People want jobs.”

Also, as Africa grows, it will need more and moreenergy, in many cases drawing on the same resourcesthat are increasingly demanded by the developedworld. For some, the answer lies, at least in part, intraditional hydrocarbon reserves: “You cannot developa continent without energy,” said Abdoulaye Wade,President of Senegal. “Africa needs to take part in theoil business.”

The human condition does not allowpeople to live off of handouts. Peoplewant jobs.

Trevor Manuel, Minister of Finance of South Africa

“ “


Alternative sources of energy also hold promise – andpose challenges. Participants debated the viability ofbiofuels, both as a means to power Africa’sdevelopment and as a product for sale on the globalmarket. Experts such as Hartmut Reinke, Director,Eastern and Central Europe, Middle East and Africa,DuPont de Nemours International, Switzerland, saidthat fuel from biomass could be complementary tohydrocarbon resources in satisfying demand in thetransportation sector. But he and others cautionedthat the technology is still so new that it would not bean appreciable export for Africa in the near future.

Finally, for African nations to move up competitivenessindices, they must not only look inward, but beyondborders across the continent and overseas. Regionalintegration emerged as a hot topic amongparticipants. Many lamented the fact that it is oftenmore expensive to fly or talk on a mobile phone toanother point within Africa than to Europe or America.Tariffs, monopolies and corruption all stand in the wayof a fully developed regional market.

Africa's Power Generation Needs Growing

Source: IEA World Energy Outlook 2006

300

250

200

150

100

50

0

1990 20302004 2015

Demand for power generation could grow at a compound rateof 3.18% through 2030, versus 2.01% for the world

Afr

ica

pow

er g

ener

atio

n d

eman

d (M

toe) Nuclear

Other renewables

HydroOil

Biomass and waste

Gas

Coal

Such integration will not happen overnight. A. MichaelSpence, Professor Emeritus, Stanford University, USA,a Nobel laureate in economics, cautioned thatEuropean integration had taken 50 years – andEuropeans still have many problems to solve. Forexample, flexible labour markets look good on paper,but xenophobia can dampen the competitive climate –as it threatens to do in South Africa.

Africans also need to look outward in order to growtheir economies by increasing demands for theirproducts. Following on discussions in 2006 at theWorld Economic Forum on Africa regarding “BrandAfrica”, participants discussed ways to promoteAfrican fashion designers and the African fashionindustry in general. Fashion is a business, said RobertPolet, President and Chief Executive Officer, GucciGroup, Netherlands, and designers should look forways to seduce consumers by creating trends.

The nature of our growth must ensurethat everyone in our society is astakeholder.

Ngozi Okonjo-Iweala, Distinguished Fellow, Global Economyand Development, Brookings Institution, USA

“ “

L’Afrique: C’est Chic!

Africa has provided some of the world’s most recognizable models, but canthe continent provide the designer clothes to match its successes inmodelling? Participants were left in no doubt after a fashion show featuringsome of the region’s hottest designs.

Robert Polet, President and Chief Executive Officer, Gucci Group,Netherlands, advised that fashion is a business and, as such, designersshould constantly be looking for new ways to seduce the customer intobuying new products. The fashion industry needs to be more competitive,stressed Precious Moloi Motsepe, Chairperson, African FashionInternational, South Africa. She said African designs need to be promotedas more than a passing fad. The secret lies in finding the elusive nichemarket, according to Lynne Brown, Minister of Finance, EconomicDevelopment and Tourism of the Western Cape Provincial Government,South Africa.



Most Africans see a bright future when they look ahead.According to a recent Gallup International Voice of thePeople poll, some 55% think the next generation will bemore prosperous than their own. But as the economicfabric of the continent changes – most dramaticallythrough urbanization – governments, businesses andcivil society need to partner in order to make reality matchaspiration. Specifically, stakeholders must innovate in theareas of technology, healthcare and political liberalization.

Guided or not, African development is happening.Within two decades, more than half of the populationwill be urban; on average, African cities are growingfaster than cities in any other part of the world. Thechallenge, said Cameron Sinclair, Founder, Architecturefor Humanity, South Africa, is to seize the potential ofthe burgeoning urban population for the betterment ofAfrican societies as a whole.

African Urbanization

Source: United Nations

Africans increasingly moving to cities

70%

60

50

40

30

20

10

0

1950 20001975 2025

Percentage of world populationliving in cities

Percentage of African population living in cities

Africa’s share of world population

One step towards unlocking the potential of the newcity dwellers is to develop new mobile technologiesthat allow them to more fully participate in the marketby increasing their access to financial services. “Themobile phone is one of the most powerful inventionsof modern times,” said Caleb M. Fundanga, Governorof the Bank of Zambia.

Already, one new technology, known as “m-banking”,a system of money transfers via mobile phones, isproving commercially viable, as well as sociallybeneficial. “Our mobile phone-based money transfersystem, launched in Kenya in March, has seen morethan 110,000 customer registrations in 12 weeks,”explained Susie Lonie, Senior Manager, MobilePayments, Vodafone Group Services, United Kingdom.In a country like Kenya, where more than three timesas many people have mobile phones as have bankaccounts, such technology facilitates everything frommicrofinance payments to remittances to rural relatives– and helps grow an entrepreneurial culture.

But new technologies also require greater access toelectricity. Participants discussed the potential of an“electranet”, a system by which small-scalegenerators can sell to the large power grid. If it works,said John Chiahemen, Editor, Africa, Reuters, SouthAfrica, it could do to the power sector what mobilephones did for the communications sector. In general,however, participants felt that there is no silver bulletto Africa’s electricity deficit, and that central generationand local generation are needed simultaneously.

For Africa to stay on the path to prosperity, Africansmust also have improved access to healthcare. Inmany cases, the political will and public awareness ofhealth threats are present, but the health infrastructureis lagging. Participants agreed that government, civilsociety and business have an equally vital interest in

I can talk of hope more than successstories.

Armando Emilio Guebuza, President of Mozambique

“

“


fighting HIV/AIDS and tuberculosis. Participants alsocalled for scaled-up partnerships to combat malariaand tuberculosis.

The need for new ways of delivering health services isdesperate in many parts of Africa. “I can talk of hopemore than success stories,” said Armando EmilioGuebuza, President of Mozambique. Specificstrategies for combating malaria include improvingcommunication between health authorities andoutreach workers, distributing mosquito netsthroughout affected areas and improving treatments.All agreed on the desperate need to support researchinto finding vaccines for both malaria and HIV.

Infectious Diseases Still a Major Cause of Death in Africa

Source: World Health Organization

35%

30

25

20

15

10

5

0

Malaria

HIV/AIDS

TB

Total AfricaTotal World Sub-Saharan Africa

Per

cent

age

of a

ll d

eath

s

Finally, participants agreed on the necessity toconsolidate gains and move towards prosperity byensuring public ownership of government. At themoment, there are only eight democracies in sub-Saharan Africa, and several of those are considerablyflawed. “We need a debate in Africa aboutgovernance,” said Mo Ibrahim, Chairman, Mo IbrahimFoundation, as well as Chairman, Celtel International,United Kingdom. “We measure everything – why notgovernance?”

Participants pointed to rampant corruption throughoutgovernments in the region and lamented a lack offreedom of expression in many countries. But therewere several instances of hope. Though he hasbattled censorship often, Editorial Cartoonist Zapiro,Zaprock Productions, South Africa, personified thepotential for free speech in Africa when he showcasedhis most controversial cartoons in front of many of theregion’s leaders in a WorkSpace session. “In Africathere’s been tremendous movement towardsdemocracy,” concluded Cynthia Carroll, ChiefExecutive, Anglo American, United Kingdom, and aCo-Chair of the World Economic Forum on Africa.“And that’s attracting foreign direct investment andproviding for further growth.”

We need a debate in Africa aboutgovernance. We measure everything –why not governance?

Mo Ibrahim, Chairman, Mo Ibrahim Foundation; Chairman,Celtel International, United Kingdom

“ “In Africa, there’s been tremendousmovement towards democracy. And that’s attracting foreign directinvestment and providing for furthergrowth.

Cynthia Carroll, Chief Executive, Anglo American, UnitedKingdom; Co-Chair of the World Economic Forum on Africa

“ “


Raising the Bar in

the WorkSpace

The WorkSpace – the workshop with a difference –draws out the collective intellect and creative capabilitiesof participants to explore concrete opportunities forimproving the state of the world.

Participants of the series of four WorkSpace sessions atthis year’s World Economic Forum on Africa cametogether to explore ways to tackle some of thecontinent’s most critical issues: How can taboos thatrestrict development be dealt with? What is Africa’s role inaddressing climate change? How can African countrieswork together to become more competitive on a globalscale? How can technology be used to improve thequality of education?

There is an elephant in the room.

Among the highlights of the WorkSpace was the candidconversation on taboos and their role in hindering Africa’sprosperity. Leaders from across sectors and industriescame together to address and solve the mystery of theunspoken in the interactive session, “A Taboo onTaboos”. The group was first greeted by Zapiro, EditorialCartoonist, Zaprock Productions, South Africa, and hiswork on some of the region’s most controversial taboos,including restrictions on freedom of speech by religiousgroups, as well as HIV/AIDS. Participants worked inteams to consider the ways these and other taboos canbe addressed, hanging their ideas on the WorkSpace’slife-size elephant model to symbolically draw attention to“the elephant in the room”.

Corruption, or more precisely the hypocrisy it cangenerate, was raised by almost all groups as a significanttaboo slowing down Africa’s development. The teamsproposed better legislation and a strong legal system, as

well as new processes toimprove transparency, assolutions. However,participants also discussedthe importance of freedomof speech and thelimitations of the law ineliminating taboos. Inaddition, they suggestedthat existing awarenesscampaigns need to bestrengthened, particularly forthe extractive industries,with campaigns such as“publish what you pay”. Thegroup’s closing conversation

revealed the deep concern participants share of theimpact of ignoring taboos, while also expressing arenewed hope of surmounting them.

Is it hot in here or is it me?

Building on the growingawareness of thecontinent’s vulnerability toclimate change, theWorkSpace session,“Getting a Grip: DesigningAfrica’s Response toClimate Change”, providedthe platform for a critical discussion on leaders’ ideas foraction. The workshop began with a learning journey, inwhich participants shared thoughts with some of theworld’s top experts on areas affected by climate change:security and migration, water and agriculture, health, and

coastal areas andinfrastructure. Togetherthey explored theurgency of the issue,building up theirunderstanding of theimpact of an increasein temperature onAfrica. They continued

their breakout discussions by looking at the most criticalimpact areas and where action can be taken to make thebiggest difference. The facilitator pushed participants toconsider new ways to approach the challenge, drawingout potential actions for changing behaviours, improvingpolicy frameworks, encouraging smarter investments andoptimizing risk management. Participants concluded thatthere is less of a need for awareness-raising around theissue than for an increase in the capacity of people to

adapt, suggesting thepursuit of“pragmatism, nothysteria” to addressthe sense ofpowerless across thecontinent. The groupalso mentioned the

importance of regional and multistakeholder cooperation,as well as the urgent need for strong economic incentivesthat engage businesses for positive results.

Africa is hardest hitby climate changebecause of its highvulnerability andlow capacity.

“

“

In other areas there’sa sense that climatechange implicationsare in the future, andin Africa it’s now.

“

“

If we frame climatechange as a business,we can change theclimate for business.

“ “

Legislation goes downthe path ofsuppression. Don’t beafraid, try to getdifferent parts ofsociety to talk aboutthe issue. On alltaboos: freedom ofexpression, freedom ofexpression, freedom ofexpression.

“

“

It is 2022 and your country has climbed 50 placesup the Global Competitiveness Index ranking ...

Following the release ofThe AfricaCompetitiveness Report2007, business leadersand policy-makerstaking part in theworkshop, “Raising theBar on Competitivenessin Africa”, explored how

to work together to boost productivity andcompetitiveness across the continent. To encourage freshideas and thoughts on multistakeholder collaborations,participants were asked to picture a future in which theircountry has made significant progress oncompetitiveness.Following theirdynamic breakoutdiscussions,participants cametogether for aconversation on theareas that needurgent attention in order to facilitate such development,mentioning skills training, health policies with a focus onHIV/AIDS, and stronger democratic institutions andprocesses, among other points. The groups’ keyrecommendations were scribed in a matrix thathighlighted threads and missing links, giving participantsthe unique chance to explore outside their usual scopeand consider innovative ideas.

High tech for high quality education

In the interactive workshop, “Delivering on Educationthrough Technology”, leadersfrom business and theeducation sector engaged inan exercise designed toencourage new thinking onways to improve the quality ofeducation in the rural areas ofAfrica by using innovations intechnology. In smaller groups,participants were presented a scenario projecting them tothe year 2012, a time when there has been a significantimprovement in the quality of education in African villages.The specific challenge posed to the teams was todetermine how they had achieved that transformation.They were asked to outline the business plan for aproject involving new technology that had brought aboutthe improvement. Led by the facilitator, the groupidentified the success factors that drove the educationaltransformation of Africa through technologicalinnovations, a conversation that sparked real interest inactions that can be taken today to reach such a future.They emphasized the underlying need for communitybuy-in and for solutions that are adapted to the capacityof users and educators. Participants also agreed that thecharacteristics of the technological tools themselves have

to be designed tomeet the localneeds andenvironment, suchas the very lowpowerrequirements andthe ability to

download new content via wireless phone networks. Thesession closed with a display of several new and availabletechnologies precisely aimed at increasing the quality ofeducation in rural locations, suggesting that the scenarioof the exercise may not be so far from reality.

Our ideas today couldlead to something verypositive for technologyin education.

“ “

We must give fullrecognition to oursuccess – weshouldn’t undermineourselves. However,there are issues weneed to work on.

“

“

When you try to makea quantum shift, youhave to ask: are webeing radical enough?

“ “

Education applies toall people, not justchildren, but alsofarmers, parents,leaders, everyone.

“

“


The World Economic Forum wishes to recognize the support of the following companies as Partners orSupporters for the World Economic Forum on Africa:

Strategic Partners

ABBAlcanAMDAudiBarclaysCitiDuPontGoldman SachsHPIntelJPMorgan ChaseKPMGMerck & Co.

Regional Partners

AbsaAfrican Rainbow Minerals (ARM)Eskom Murray & RobertsNigerian National Petroleum Corporation (NNPC)SABMillerSasol

Meeting Supporters

CNBC AfricaInternational Finance Corporation (IFC)Magna Carta

Service Providers

TelkomTransnet

The World Economic Forum also thanks CNBC Africa as host broadcaster, and City Year for its support.

Acknowledgements


Contributors

Peter Torreele is Managing Director of the World Economic Forum. Haiko Alfeld is Director, Head of Africa, at theForum. The World Economic Forum on Africa was under his direct responsibility, with Yemi Babington-Ashaye,Associate Director, Global Leadership Fellow, Africa, and Stéphane Oertel, Global Leadership Fellow, Africa. NadineBonard, Senior Specialist, Events, was the meeting Coordinator.

Samantha Tonkin, Senior Media Manager at the World Economic Forum, worked with Alejandro Reyes, DiannaGames and Benjamin Skinner to produce this report.

The World Economic Forum would like to express its appreciation to the summary writers for their work at the WorldEconomic Forum on Africa. Session summaries are available at www.weforum.org/africa/summaries2007

Editing: Fabienne Stassen Fleming, Senior Editor, and Janet Hill, Editor

Design and Layout: Kamal Kimaoui, Associate Principal, Production and Design

Photographs: Eric Miller and Matthew Jordaan

The World Economic Forum would like to recognize the support of PricewaterhouseCoopers in compiling data andstatistics for this report.

The World Economic Forum is an independentinternational organization committed to improvingthe state of the world by engaging leaders inpartnerships to shape global, regional andindustry agendas.

Incorporated as a foundation in 1971, and basedin Geneva, Switzerland, the World EconomicForum is impartial and not-for-profit; it is tied tono political, partisan or national interests.(www.weforum.org)

Documents

World Economic Forum on Africa 2006