LWOL. A discussion with Mark Barnes on ‘Industrial Manufacturing: Africa versus other high growth markets’
Mark Barnes leads KPMG’s High Growth & Emerging Markets practice. In this role he is responsible for KPMG’s focus on a number of strategic markets defined as Growth, Emerging and Pre Emerging. This past Thursday we invited our LinkedIn contacts to present Mark with any questions they might have on the topic of ‘Industrial Manufacturing: Africa versus other high growth markets’ during a Lunch With Our Leaders (LWOL) session.
Here are some Q&As from that lunch hour…
The path to growth in Africa
Q. Africa has been experiencing tremendous growth the last decade and a resulting increase in GDP, disposable income and average spendings, but they have not necessarily yielded a proportionate rise in employment. This has left most economists believing that Africa is definitely missing out something from its growth model. What in your opinion do you think Africa can do differently, especially as we progress into a potentially greater phase of growth within the next decade, to achieve better income distribution and more employment for our teeming young population?
A. My perspective on this at one level is to get the Africa Story out there and tell it with enthusiasm. Clearly this is a very simplistic answer and the reality is that many changes need to occur to accelerate FDI, e.g. targeting of specific industries overseas to invest, liberalizing trade barriers across the continent, and developing governance models.
Q. One of the challenges I think Africans face is knowing the right approach to tackling Africa’s challenges. It would be nice to hear from you effective approaches Africans can use to tackle challenges facing the continent and how we can galvanize support on a global scale such that we are able to achieve results within a short timeframe.
A. I agree and think understanding what the challenges is very important. Interestingly many developing markets face similar issues such as lack of stable power sources, poor education, developing infrastructure needs. What Africa needs is policies that encourage new business development, and more liberal trade and border barriers to promote intra Africa trade. Clearly other pillars such as anti-corruption policies and rule of law are also key.
Q. I am sure you have statistics on Africa’s industrial markets, please what is your opinion as compared to the continents and regions you have been? I am also sure you are aware corruption is a clog in wheel, what do you think the business community in Africa can do to overcome this problem?
A. The opportunities for an industrialized Africa are enormous, however corruption remains a challenge which must be solved. As Africa accelerates as an industrialized continent the consensus on corruption should be “Don’t go there”, Africa should aspire to be the continent of ‘no’ corruption.
Is Africa selling itself too cheaply?
Q. Don’t you think Africa has sold itself too cheap as compared to other High Growth Markets? I am sure you are aware of investment laws, local content policies in place in other HGM but in Africa, investors come in without proper environmental assessment and negligence to local content laws. What is your view on this?
A. Emerging markets are not necessarily a low-cost labour play. The importance is to get the message out and tell the ‘Africa Story’ which is a rich and inspiring one!
The role of entrepreneurs in Africa’s growth
Q. Africans are entrepreneurial in nature, many of us don’t even expect much from our Government (maybe that’s why we keep being taken for granted by them), in the next few years, I see an industrial revolution that will be championed not by the governments but by private participation and SMEs; from your experience, has there ever been such revolution in any other emerging markets?
A. Emerging Markets are where the entrepreneurs are. Who knows, the next Bill Gates or Steve Jobs could be a 25-year-old African entrepreneur. Emerging Markets are an exciting hot bed of innovation and energetic entrepreneurs.