Africa - "The continent of opportunities"

The first Norwegian African Business Summit brought together a wide range of speakers and participants, including African and Norwegian Government ministers, delegates from more than 20 African Embassies and many representatives of the Norwegian Business community, some with many years of experience doing business in Africa and some with a plan or a hope to expand to a new market. 

Highlights from the NABA Business Summit 29. September 2011.

The Norwegian Minister of Trade and Industry, Mr. Trond Giske, opened the summit remarking upon the many common features between Norway and Africa: both abundant in raw materials, and both being among the world’s fastest growing economies. This, he said, should be a good starting point for development and growth through investments and business.The speakers talked about the need to change the Norwegian perception of Africa, the opportunities that exist on the continent, but also about the challenges investors and companies meet and the way to address them to create a sustainable business environment that is favorable for the investors, the local African communities and the region as a whole.Mr. Klaus Endresen, economist and managing partner in Appiah Endressen & Co, with many years of experience doing business in Sub-Saharan Africa, said that the main challenge when it comes to promoting business in Africa is the Norwegian view on Africa, not Africa per se. Norwegians wanting to succeed in Africa need to change their perception of the continent and their way of thinking. Representatives of three other Norwegian companies with years of experience from the continent, Statoil, Jotun and Heidelberg Cement, agreed with Mr. Endresen, noting that Africa should be seen as the next big market, not only as a resource provider. Mr. Adeyemi Dipeolu, trade expert and Chief of Staff at the United Nations Economic Commission for Africa, noted that the economic outlook for Africa has improved significantly over the last years, mostly because of better economic management, improved governance conditions, commitment to regional integration, Africans investing in Africa and an increased global demand for natural resources. This calls for a change of attitude when it comes to making business in Africa.The speakers shared their viewpoints on the vast opportunities in Africa and the fast growing African market. Key note speaker Dr. Manu Chandaria, Chairman of the Comcraft Group Kenya and named most respected CEO in East Africa three years in a row, spoke about the advantages of investing in Africa, emphasizing that nowhere in the world is the return on foreign direct investment higher. Far from being a uniform landmass, each African country has different characteristics that benefits the investor. Egypt and South Africa has a well-developed infrastructure, Nigeria has vast resources and a growing internal market, whereas Kenya has a relatively highly educated population. Mr. Jens Petter Kjemperud, Norwegian Ambassador to Sudan and former Ambassador to Ethiopia, talked about the growing middle class in Africa, today the size of the American population, and what this means for consumer demand.Some of the speakers shared their recipes on how to succeed in Africa. Dr. Chandaria highlighted the importance of knowing your costumer and pointed to the fact that what works in Europa doesn’t necessarily work in Africa. He said that as an investor, it is important to build a logistical network and to be patient. Many investment projects have failed and a certain level of political risk in Africa still has to be counted with. At the same time, there are many untapped resources on the continent – many of which correspond to sectors in which Norway has a comparative advantage. Norwegian experience and know-how – with regards to the fisheries sector, aluminum processing and forestry – is valuable in this context. Mr Endresen followed up by saying that local knowledge and cultural sensitivity is key when doing business in Africa. Creating local partnerships and investing in technology transfer and education is a prerequisite for success, as is close cooperation with local government. Mr. Endresen also emphasized that one should never assume that lower standards are acceptable in Africa. Rather, the investor should be an active corporate citizen from day one and involve the local community through the employment of local staff, cooperation with local companies and in this way make business with Africa, not in Africa. Mr. Arne-Jørg Selen, Vice President of Heidelberg Cement, talked about the importance of using the business network that is already established in the country or region and drawing on the local knowledge possessed by businesses or the Norwegian diplomatic representatives. In this vein, the NABA Summit was credited as a good place to start interacting with each other, share knowledge and learn from others.Ms. Ingrid Fiskaa, State Secretary of the Ministry of Foreign Affairs, talked about the importance of avoiding the type of economic growth in Africa that leads to instability by reinforcing the uneven distribution of wealth. On the contrary, private sector investments should benefit the general population and especially the labor force through job creation locally. A good business environment created by a strong and transparent tax system together with respect for human rights will constitute a win-win situation for all parts. The State Secretary also talked about how the private sector through transfer of knowledge can play an important role in developing clean and renewable energy sources in Africa and emphasized the important role that women play in developing the local community. Dr. Juris Gro Nystuen, senior partner at the International Law and Policy Institute (ILPI) and former Head of the Council of Ethics for the Norwegian Sovereign Wealth Fund, talked about the ethical considerations that come with doing business in Africa. Severe environmental damage, corruption, appalling working conditions and relocation of people without granting compensation are issues that the businesses must take a strong stand against.The speakers were also clear on the fact that there are important challenges when doing business in Africa. Poverty and uneven distribution of wealth, shortages of skilled labor and corruption poses big obstacles to a healthy business environment. Mr. Mahmoud S. Bassiouny, partner of the DLA Matouk Bassiouny Law firm in Cairo, said that the latter should be address by the countries in question by increasing the level of transparency and reforming the legal response to corruption. Mr. Kjell Roland, managing director of Norfund, emphasized that both parties to an agreement are responsible for the act of corruption.Other topics that were addressed by the speakers were the role of China in Africa and the need to cooperate with the Chinese business community, the role of the African Development Bank in providing equity, the challenges posed by lack of information when investing in the African Stock Exchanges and much more.The summit also contained a mini session on trade in East Africa where the Permanent Secretary for the Kenyan Ministry of the East African Community (EAC), Mr. David Nalo, was joined by Mr. John Small, director of Eastern African Association and Bernhard Stormyr, representing Yara International. The Costums Union in East Africa has been in place since 2005 while a Common Market was established in 2010. The cooperation has resulted in a huge growth in regional trade, it has become easier for investments to take place across the region and a solid ground for expansion of trade has been established. Mr. John Small concluded on behalf of the region that East Africa is at a tipping point and that the so called “Lion economies” are welcoming investors to participate.The last session of the conference was a speed-dating event with representatives from Norwegian businesses signing up to speak with the representatives from the 20 African Embassies that attended the summit. The speed-dating proved to be a very popular session with fruitful discussions and information sharing within smaller groups.The Kenyan Minister of the East-African Community, Mr. Musa Sirma, concluded the summit by saying that what Africa primarily needs are investments, not aid. He welcomed everyone to Africa, “to see for yourself that investments are safe in Africa!”