Why we believe in Africa
By Minister of Foreign Affairs Ms. Ine Eriksen Søreide and Mr. Eivind Fjeldstad, Managing Director, NABA
Africa is Europe’s closest neighbor, and a continent with great growth potential for Norwegian companies. Today business people from the Nordic region and African countries are together in Oslo to attend the Nordic-African Business Summit, aiming to find great common business opportunities and contribute to growth and development in African countries.
The Summit for Nordic and African business has grown year by year, and this year we are gathered for the 7th time in Oslo. This has also become an important meeting place for politicians, and this year, Ghana’s Vice Preisdent, and Ministers from Uganda, Egypt, Nigeria and Sudan will attend.
There are five main reasons why we believe in the opportunities in African countries:
Africa’s demography with a growing population is creating opportunities. In 2040 African countries will have the world’s largest number of people in working age. At least ten million new jobs will have to be created annually to keep up with this population growth.
Africa is leapfrogging technology – this makes the continent a more attractive market. There is a tech wave in African countries at the moment – internet access gives better opportunities to communicate with the outside world. Through the mobile operator Safaricom, Kenyans have for many years been able to use mobile money, long before Vipps was introduced by DNB bank in Norway. An Ethiopian coffee farmer can now check the coffee bean prices via an app that connects him to the exchange in the capital 100 miles away. Power supplier Mkopa gives Kenyan the opportunity to buy power via their telephone.
African countries are working to make the continent a common trade zone – without barriers and customs. Only fifteen percent of Africa’s trade is intra-continental, while 60 percent of the trade is with Europe. There has already been great improvements in the logistics. For Norwegian companies this means that establishing in one country gives access to a far larger market. This is a perspective Norwegian companies should keep in mind when developing new strategies.
There are great differences between countries, but many important indicators are pointing in the right direction when it comes to the development of legal systems and ”ease of doing business”. This is crucial if foreign investors are to succeed. One barrier for more investments is the overall negative media coverage of Africa. There are challenges in many African countries, but we should not close our eyes for the many positive developments.
Many companies have already succeeded in African markets. Let us learn from these companies. These are pioners in maritime, energy and cement-industry. More Norwegian companies have followed in countries where these companies have been established, and the companies have expanded to new countries and regions. For the solar power company Scatec Solar it took only nine months to develop what was then the largest solar power park in Southern Africa – in South Africa, and the workers who set up the solar power park came mainly from the neighboring villages. The ICT company Laboremus are using skilled Ugandans from their office in Kampala when they are solving challenges for their clients in the finance sector back home in Norway. Yara International has already for decades provided fertilizer to African farmers, and is a part of Africa’s green revolution. The Norwegian private equity firm Spear Capital has equity in Zimbabwe’s leading super market chain as well as diary – and can demonstrate returns they would probably not have managed in Europe.
African leaders want to discuss what solutions and which technologies working best – and how the most rewarding synergies can be created with Norwegian partners.
Let us work with our partners on making this happen. We believe a stronger private sector and international investments can contribute to more jobs being created – and that is why the government is strengthening the business development post in the annual budget for 2018 with 338 million NOK. Norfund – the government’s finance development institution – is creating thousands of jobs through investments in sustainable companies in developing countries, and this is one of our key tools for business development and job creating in Africa. Norfund get 188 million NOK of this budget increase. Norfund is contributing to growth in Africa through investments in sustainable energy and agribusiness.
Another important contribution in getting more jobs, is the focus on vocational training. Those searching for jobs need competence that is relevant for business. This is why the Ministry of Foreign Affairs have dedicated 500 million NOK to the establishment of vocational training projects that will create better links between knowledge provided, and private sector needs.
More than 125 member companies are now gathered in the Norwegian-African Business Association (NABA). They share experiences on what it takes to succeed in African markets. In November, the Crown Prince and Crown Princess is going to Ethiopia, the continent’s second most populated country. Nearly fifty Norwegian companies are joining this trip. They would like to experience the opportunities first-hand. This week NABA’s annual Summit is a great opportunity to exchange experiences and build network.
(published in Dagens Næringsliv 26.10.2017 – and translated from Norwegian by NABA)