This week the Nordic-African Business Summit was hosted in Oslo for the 9th consecutive year by NABA and co-hosts Norfund and the Norwegian Ministry of Foreign Affairs. The Summit gathered over 400 participants and over 60 speakers from 35 countries on Tuesday 8th of October.
Please find a summary from the plenary sessions, prepared by Arve Ofstad, AOf Consult:
Highlights of the plenary sessions:
- Overall conditions: The overall conditions for economic growth and development in most African countries are still positive, despite slow growth in the two largest economies and global uncertainties.
- Nordic investors interested: Nordic investors see opportunities for long-term engagement in many sectors, depending on local conditions. Success depends on solid preparations and good partners.
- Slow growth in major countries: Great concerns about the slow growth in major countries. Vice President and Ministers made strong statements to alleviate fear and promise an enabling environment for future inclusive growth and peaceful development.
- Global uncertainties: Global uncertainties affect prospects in African countries; importance of good governance, stabilisation and constructive reforms underlined.
- Young entrepreneurs: Young entrepreneurs show impressive results in many countries; need for a stronger encouragement and comprehensive packages of training, start-up capital and follow-up.
- All-Africa Free Trade: The African Continental Free Trade Agreement (AfCFTA) is now operational and will encourage economic integration, trade and cooperation. However, the short-term effects may be limited, awaiting better infrastructure and political action to counteract negative effects and vested interests.
- Managing uncertainties: Managing risks is important for companies as well as for governments. Companies need long-term approaches while adjusting to faster change. Governments need to maintain good regulatory frameworks, preferably based on regional cooperation. Business models and regulatory policies must be adjusted to African and individual country conditions, not just copied from USA and Europe.
- Climate change: Climate change challenges need to be highlighted much more strongly, as they will affect all countries and companies, especially in Africa.
Norwegian Crown Prince Regent Haakon and Nigeria’s Vice President Prof. Yemi Osinbajo at the Nordic-African Business Summit.
Norwegian Minister of Foreign Affairs Ine Eriksen Søreide giving welcome remarks at this year’s Nordic-African Business Summit. Her speech can be found here.
Plenary Session Part I: High Level Outlook
Ine Søreide Eriksen, Norwegian Minister of Foreign Affairs, opened the Summit and extended a warm welcome to all participants. Most of Norway’s external trade is with countries in Europe. Norway nevertheless increased its trade with Africa by no less than 50 percent in 2018, for which we are very happy, the Minister said. To continue this growth, Norwegian companies depend on stability and predictability to make long-term investments. This means anti-corruption, human rights and an independent judiciary.
Taking a broader look, however, there are worrying trends. New trade barriers are set up and there is increasing distrust in the World Trade Organisation (WTO) and other multilateral frameworks. No single nation can achieve the global sustainable development goals (SDG) or the global climate change objectives by themselves. We need rules-based multilateral trade and cooperation. And we need cooperation to succeed in the transition to a greener and
bluer economy. She congratulated the African countries on reaching the operational phase of the African Continental Free Trade Agreement (AfCFTA). Deeper African economic integration will provide opportunities for inclusive economic growth, private sector development and job creation. It will also provide new opportunities for Norwegian and Nordic businesses.
One of the greatest challenges in Africa is to create the 20 million new jobs required annually. Norway aims to do its part by stimulating private direct investments and trade, and in development efforts which includes the Norwegian Investment Fund for Developing Countries, Norfund. By the end of 2018 there were more than 300 000 jobs in companies in the Norfund portfolio, and even larger multiplier effects. The Minister was confident that Norfund as well as all companies present at this summit will strive to deliver on the standards set forward by the UN guiding principles on business and human rights as well as the OECD Guidelines for Multilateral Enterprises in their investments abroad.
Finally, she reminded the audience of the importance of our oceans which surround the African continent as well as feeding Norway’s shores. It is estimated that the ocean economy could more than double its contribution to global economy by 2030. But in order to achieve this, we must manage the oceans wisely, and ensure their good health. To have rich oceans, we must have clean oceans. The main focus of this year’s summit is sharing of experiences. In a room filled with so much knowledge and experience from economic activity on the African continent, I hope you all take advantage of this opportunity to learn from each other, Minister Søreide Eriksen said.
Panel dialogue focused on Nigeria and South Africa
The panel dialogue between Nigeria’s Vice President Yemi Osinbajo and South Africa’s Minister of Small Business Development Khumbudzo Ntshavheni was moderated by David Pilling, the Africa Editor of Financial Times. Both panellists insisted that the dispute between the two countries caused by violent protests, arrests and other actions in South Africa
against Nigerian and other migrants, and the counter-reactions in Nigeria against South Africans and South African companies, would now be resolved. Both countries wish to maintain an open policy for cooperation and access by companies and free movement of people. However, illegal activities including drug trade, smuggling and counterfeit goods will be prosecuted, regardless of nationality. While South Africa has ratified the AfCFTA, Nigeria has signed, but not yet ratified. Vice President Osinbajo explained that Nigeria had been very concerned about the rules of origin in the agreement. It was important to secure full support from business and trade unions.
This is now mostly solved, and Nigeria is satisfied that AfCFTA also includes trade in services, payment services, and movement of people. Nigerian big business is expected to benefit from AfCFTA, as will many small traders and exporters of agriculture products. Many small and medium sized manufacturers are still worried, however. Minister Ntshavheni expects that South Africa as a country will benefit, but the free movement of people may represent a huge challenge. South Africa already has the largest community of migrants, and depends on stability among its neighbours and in the region. She appealed for the lifting of economic sanctions against Zimbabwe, and the need for faster development in Lesotho and Mozambique, to reduce the pressure of migrants into South Africa. While Mozambique is not a member of the Southern Africa Customs Union (SACU), they have started to involve Mozambique as “SACU+M”, as in the new Economic Partnership Agreement with UK.
Morning key note conversation with Nigeria’s Vice President Prof. Yemi Osinbajo, Financial Times Africa Editor David Pilling and South Africa’s Minister of Small Business Development Khumbudzo Ntshavheni.
David Pilling raised the concern that the two largest economies in Africa; Nigeria and South Africa, had experienced very low economic growth over the last decade, and almost zero growth in per capita income. He added that Nigeria with 200 million inhabitants that would increase to 400 million by 2050, may then have as many absolutely poor people as India with
nearly 1.4 billion. Vice President Osinbajo explained that Nigeria had suffered from the drastic reductions of oil price and from the troubles in the delta (and in the North). He claimed that new investments in energy and infrastructure, along with increased social investment policies and a strong technological development, were already contributing to higher economic growth and poverty reduction. The Vice President argued that the comparison with India was unfair, as Nigeria was now following the same policies for poverty reduction as India, and would therefore succeed in a drastic reduction of poverty.
Minister Ntshavheni agreed that economic growth had been higher in South Africa under the Mandela and Mbeki presidentships, but this was unfortunately jobless growth. During the Zuma period, there were elements of “state capture” which had not been helpful. Today’s government is rectifying the economy and the state, but had needed some time to achieve stability. The tax authority has been cleaned and improvements are made in the energy sector beyond ESCOM. The aim is to involve more people directly in the economy in small and medium enterprises, a new industrial policy, agricultural reforms, harnessing the ocean resources, etc.
The final issue revolved about conditions for foreign direct investments (FDI). It is claimed that it is tough to invest in Nigeria, said Pilling. Vice President Osinbajo claimed that Nigeria is now more stable, has its currency under control, and provides vast opportunities in the oil and gas sector, including deep offshore. FDI is increasing in Nigeria, also outside the oil & gas sectors. Special economic zones have been established, there are several new Chinese investors in garments, a new cotton ginnery has been commissioned, and several other measures have been taken. He noted that international companies that know their way around are expanding, so there is no reason for new investors to be reluctant.
Minister Ntshavheni underlined all the opportunities and conditions existing in South Africa – almost like a West European country. Wages are higher than in most African countries, but the workers are productive and competitive. They are therefore also creating a market which is growing. South Africans are not beggars, they are an attractive market and
investment opportunities. And don’t forget that even the weather is perfect, she added.
Plenary Session Part II: Navigating Uncertainties
First dialogue session: Major challenges, risks and opportunities. Rohitesh Dhawan (Eurasia Group) and Sarah Baynton-Glen (Standard Chartered Bank) provided their analysis of main uncertainties, challenges, trends and opportunities for
various African countries. Dhawan argued that the main risks are of a political nature. Uncertainties at the global level including the US/China trade war, Britain’s exit from the EU, insecurity in the Middle East and unpredictable policies of certain world leaders, are more important risks for the African countries, than uncertainties internal to Africa. He listed five
major events that may affect growth and prosperity in the coming years: 1) Whether South Africa may develop a “flagship programme” similar to the China-sponsored Belt and Road Initiative (BRI); 2) Whether DR Congo may be able to reform, as a follow-up from the new government’s mining policies; 3) Whether the Jubilee Coalition in Kenya will manage the
macroeconomy that will enable strong development in sectors such as tourism and horticulture; 4) Whether the agreement in Mozambique between Frelimo and Renamo may last sufficiently to enable development of the LNG resources in Northern Mozambique; and 5) Whether the government in Nigeria will be able to advance a real national development
policy and programme. Baynton-Glen agreed on the importance of global trends for developments in African
countries. As global growth is slowing, this results in overall slower growth in Sub-Saharan Africa. There are nevertheless pockets of good growth. The high public investments in several East African countries has not yet contributed to higher growth and employment, and the future of further Chinese investments is uncertain. Both agreed that certain countries were showing positive developments politically or economically, or even both, such as Ethiopia. Angola is seeing positive political changes, but has a more uncertain economy. Egypt may also be on the upturn. A lot will depend on the
two major economies Nigeria and South Africa, however.
Mr. Rohitesh Dhawan from Eurasia Group and Ms. Sarah Baynton-Glen from Standard Chartered in conversation with moderator Lanre Akinola, editor of Nurmara.
Both agreed also that the short-term effects of AfCFTA may be limited. Success will depend on major improvements in infrastructure to make intra-African trade competitive. In addition, major issues regarding the rules of origin are not solved. There are no measures in place to compensate the losers from free trade, neither a strong policy for adjusting the
economic structures to make use of the new opportunities. There are too many vested interests, and a need for a fundamental change in thinking in order to adjust and change. Dhawan felt that the fundamentals are nevertheless positive – or rather moving carefully in this direction – in most of Africa. There are reasons for optimism, but a lot depends on
international events. He added that some of the negative international events may even provide opportunities in Africa. The US/China trade war has benefitted car manufacturers in Morocco and South Africa. Some countries may enter into the circulation economy for plastics and other waste that has a useful after-life. Baynton-Glen pointed at several sectors
that may have a brighter future in Africa, such as tourism, LNG production, energy and infrastructure in general. As Chinese investments are slowing because of over-exposure, there is room for other international investors.
Second and third dialogue sessions: Responses to uncertainties
Hendrik du Toit (Investec Group), Ifeyingwa Ugochukwu (Tony Emulelu Foundation) and Ylva Lindberg (Norfund) outlined some responses to manage and navigate uncertainties, moderated by Lanre Akinola (Nurmara). Du Toit argued that despite the turbulent conditions in countries like Nigeria and South Africa, they nevertheless represent huge
opportunities. Foreign investors require a combination of skills, innovative thinking and risk capital. Capital is available in most African countries, but this capital is too often invested in “safe” traditional assets. What is needed is risk capital, and/or guarantees or subsidies. Ugochukwu promoted the role of young entrepreneurs. The Emulu Foundation selects young persons for entrepreneurship training and then provides them with seed capital. This combination is essential, as these entrepreneurs require close follow-up. When successful, they quickly create more employment to multiply the effect. While in Europe millions of dollars are required to generate each job, in Africa a few thousand dollars is sufficient.
Lindberg agreed with du Toit on the lack of risk capital, and argued that exactly because of these uncertainties there is a need for Development Finance Institutions (DFI) such as Norfund. The DFIs are intended to fill some of the capital risk gap. They always co-invest with partners. Norfund is not set up to promote Norwegian interests, but do collaborate
with some Norwegian companies when this fits the overall objectives. Norfund and other DFIs undertake risk analysis and undertake measures to reduce risks. It this way they show the way for other potential investors, that investments are possible even in situations that seem too risky. Climate change is one of the major risks today, and is included part and
parcel in Norfund pre-investment risk analysis. All agreed that business models have to be appropriate to African and each country’s specific conditions, and have to be sustainable and resilient. It is not possible just to replicate European business models, and many special conditions and requirements applicable in there, may not be appropriate.
Akinola then invited Ulf Pehrsson (Ericsson), Niels Ingemann Møller (Ingemann Group) and Carri Lockhart (Equinor) to explain their approaches to uncertainties. Pehrsson underlined the extremely fast-growing market for telecommunication in Africa. Ericsson is a well-established century-old company, and have a long-term perspective in African countries. Further expansion depends mostly on the construction of telecom towers in rural areas. They need well regulated markets, and argue for regional cooperation for common standards and regulatory frameworks, preferably at an all-Africa level. Lockhart agreed, and stated that Equinor (previously Statoil) also has a long-term perspective. However, many changes are faster now, such as prices and currencies affecting the oil & gas markets, and climate change has become a much stronger and more relevant issue. Equinor is therefore expanding into renewables such as offshore and onshore wind, and even solar. She saw a huge and growing energy market in Africa, where only 25 % of the rural population today have access to electricity. Lochart also agreed on the importance of a good regulatory framework. However, this cannot be copied from the US or Europe, but must have an African perspective.
Ingemann Møller said that his company was relatively new in Africa, but found many promising opportunities in agriculture and agrobusiness. New investors should not look at “Africa” as a whole, but be selective and engage in specific countries. They will then discover that general statements about “Africa” will not apply. Get to know these countries – don’t rely on the newspapers, he said. All agreed that newcomers have to prepare themselves well, and underlined the importance of a good partner. On this basis, Nordic companies will continue to engage and expand in African countries, with good partners for mutual benefit. The sessions were then concluded by Akonola. Uncertainties and risks are there, but so are opportunities. The one risk element that really needs more thorough attention, is climate change. It will affect us all, all countries and all companies.
Mr. Torbjørn Røe Isaksen, Norwegian Minister of Trade and Industry, opened this year’s speed-meetings where partcipants were able to book ten-minutes-meetings with Ambassadors, financial institutions and experts.
Norwegian Minister of Trade and Industry opens the NABA Summit speed meeting session.
The Summit also included several parallell sessions on sectors such as renewable energy, oil&gas, agri-tech, finance and technology, as well as topics such as security in Africa; Nordic-China-Africa collaboration and Nordic partnership with the African Development Bank. This year’s closing key note speech was given by one of the continent’s most successful entrepreneurs, founder and president of the Econet Group, Mr. Strive Masiyiwa.
We are grateful to our co-hosts Norfund and the Norwegian Ministry of Foreign Affairs; main partners Scatec Solar, Financial Times, Turkish Airlines and SANDS; conference partners Standard Chartered Bank, Equinor, NOREC and INTL FCStone; strategic partners EBCAM, Nurmara, Business Sweden and African Business. Thank you all for making this possible! Also a big thank you to our lunch/content partners Sunergy, Africa Finance Corporation, Boston Consulting Group (BCG), Arctic Securities and Yara International.
NABA CEO Mr. Eivind Fjeldstad together with closing key note speaker Mr. Strive Masiyiwa and Yara President & CEO Mr. Svein Tore Holsether.
From the round table session on renewable energy.
(All photos by photographer Mona Ranum)