Investing in Africa on its own terms by Cherie Blair CBE, QC
21st October 2014
Adding value and delivering long term returns
Four African leaders are meeting in London today with a very clear common agenda: promoting Africa as a land of opportunity and investment potential for international corporations and investors. As a barrister and an adviser to businesses on the implementation of Good Global Corporate Citizenship, I believe this gathering needs to be viewed as far more than just a commercial forum for investors to diversify their portfolios but also as a unique opportunity to foster long term value-adding partnerships on the continent.
The “Africa Rising” narrative has probably never been stronger but as the continent is progressing in its shift from aid to trade and investment, pressing issues such as sustainability, social impact and the Rule of Law also need to gain momentum. While it is time for Africa’s economic success story, it is also time for Africa to make the key decisions that will set its future path: how it manages its resources; how it translates economic growth into genuine human development; and how it delivers long standing social returns for the benefit of its people.
The main question Africa’s business partners and investors should now focus on is no longer “are there opportunities in Africa?” but rather “how are we going to build on them?” and, more importantly, “how can companies operating in Africa contribute to long term social and economic returns for its people?”.
African investment has become increasingly competitive. Emerging powers such as Brazil and Turkey are building up their presence across the continent, bringing financial capital, business acumen and also new models of development.
But because Africa is rising, it is finally in a good position to set its own terms and conditions and to select its partners. Mo Ibrahim’s provocative statement during the US-Africa Leaders Summit in August this year is a serious message for any business now looking to invest on the continent: “Wherever you go in Africa there are Chinese business people, there are Brazilian business people. None of us went to Brazil or to India and China to tell them to come and invest in Africa. They find out themselves and they come and invest. Why must we come and inform this misinformed American business? You guys invented Google, invented all these media platforms. Use them, please.”
British entrepreneurs must heed that message as well as demonstrate their competitive value if they want to play a part in some of the world’s fastest growing economies. So it is an ideal time to take a step back and rethink our own traditional business models; to refocus on exporting technology and skills; and to reflect on how to influence good business practices to advance long-term social and economic development for the people of Africa.
Being competitive is not only about the product we make or the price we offer. It is also about playing a meaningful role in increasing Africa’s prosperous future. To this end, fostering value-adding partnerships means creating ventures that harness sustainable models of business and sharing best practices rather than a short-sighted model of profit repatriation.
My experience working on these issues, in Africa and elsewhere, has clearly demonstrated to me and the organisations I have been advising, that responsible long-term cooperation with local partners is not just beneficial to the host nation but also ensures the greatest returns for investors.
Investing with impact should be the way forward for any of the continent’s partners. London has been a historical centre of world trade for centuries and UK businesses are globally recognized for their expertise in sectors such as oil and gas, green energy, agriculture and infrastructure, often using cross-sector expertise to add value to benefit their African partners. But it is not the only way British companies can demonstrate their competitive advantage.
UK companies can also lead the way on other pressing issues such as governance, corporate social responsibility and human rights. We’re already in the vanguard, as last year, for example, the UK was the first country in the world to adopt a National Action Plan to implement John Ruggie’s UN Guiding Principles on Business and Human Rights. The plan not only aims to promote responsible business in the UK but also in overseas operations and within UK corporation supply chains.
The UK-Africa relationship of today is about fostering equal partnerships – ones that serve Africa’s strategic vision. By preparing the foundations today with better business practices, British entrepreneurs will be well-placed to play an active part in the future of this successful adventure.