No. 29 – Three AM Reads: Education in Africa Needs $16-$18B | Dangote Refinery Signs Equipment Deal with Honeywell | Egypt Tops List of Countries for Hotel Development

Report Touts Investment Opportunity for Private Education Across Africa

DC-based Caerus Capital put together a report on the investment opportunity in private education across Africa. The authors project that 25% of school age children – 66 million children – across Africa will be in private education by 2021, up from the 21% who are currently enrolled. The authors also point out that private education across Africa needs about $16-$18B in private investment over the next five years to ensure a strong industry on the continent. One of the rough data points in the report is that ~30M school-age children across the continent are not in school right now. I’m still digesting the report, but a few things immediately come to mind:

1) African stakeholders need to be involved in funding these type reports. None of the funders of this report are African organizations.

2) The investment opportunity for education is massive on the continent, yet I’m nervous about governments not being a good partner with the private sector in developing private education. That leaves much room for private education that is all over the place in terms of quality.

Dangote Oil Refinery Company Purchases Equipment from Honeywell International

New Jersey-based Honeywell International announced that one of it’s subsidiaries will be supplying the Dangote Oil Refinery Company with an equipment package for the construction of its single-train refinery complex near Lagos. The refinery is slated to be the largest of it’s type in the world. Construction of the refinery is slated for completion in 2018, and due to be operational in 2019. I’m curious to see how many American jobs this deal will support.

Top 10 African Countries for Hotel Development

This is an interesting list of the top African countries for hotel development. According to TOPHOTELPROJECTS, Egypt, Morocco, and Nigeria take the top three spots. I’m curious about those 12 projects going on in Cape Verde. Anyone up for a vacation soon?

I Can’t Wait to Read The Next Africa

When Aubrey Hruby and finance ministers from several African countries waited for the globe at Google headquarters to rotate to the African continent so that they could see how many hits the continent was getting at the time, they were stunned to see just a couple dots compared to completely outlined countries for the rest of the world.

That story from some years ago was just one of the interesting stories Aubrey and Jake Bright shared during their DC launch of their first book, The Next Africa. Since that time, Google hits for terms like “Africa and tech” are up 1000 percent, according to Aubrey. Goes to show how things are changing in terms of the conversation around Africa.

I’m a big fan of Aubrey and Jake, and was thrilled when Aubrey first mentioned that she was working on a book covering business investment in Africa. Their book focuses on the growth the continent is experiencing with a careful eye to some of the risks that could jeopardize this growth.

I love their approach of talking to folks doing interesting things on the continent. Data points have been thrown around for some time now. Seven of the ten fastest growing economies globally. Average five percent GDP growth. $880 billion potential agriculture productivity. The list goes on. Who are the people driving this growth? What is on their mind? What drives them? I think Aubrey and Jake get at this.

With the hundreds of interviews Aubrey and Jake did for this book, we are still just scratching the surface on really interesting people and companies that are killing it across the continent right under everyone’s nose. I look forward to seeing 100 books coming out over the next several years covering various nuances of the business environment across the African continent. At least one other book comes to mind that does a nice job teasing out stories from business leaders across the continent: Success in Africa by Jonathan Berman.

What are some other books that are telling interesting stories about Africa’s growth? Help me grow my backlog of books to read and leave the titles in the comments.

Growing Exports to Nigeria Can Be Atlanta’s Secret Sauce

Atlanta is a top-10 exporter amongst US cities to Nigeria. I hope the city puts more energy behind its connection to the country. The city recently completed its Metropolitan Export Plan with support from JP Morgan and the Brookings Institution. Currently, the only African countries an exporter in Atlanta can get information about exporting to are Morocco and South Africa. Yet, the growth of Atlanta’s exports to African markets outstrips exports to other parts of the world.

While the city has seen record export growth, its ranking among US metro areas remained at No. 18. There is a lot more than $178M in sales opportunities in Nigeria. For example, the Dangote Group is in the process of investing $16B in the development of an oil refinery and two fertilizer plants. Machinery and chemicals are two of Atlanta’s top export products.  And that is just talking about one company. I believe that if Atlanta puts energy behind building its export pipelines to African markets, particularly Nigeria, the city will see it’s ranking rise.

Bridging “Trade not Aid” 

I gave a presentation earlier this week on how investment was key to moving the needle on transforming economic engagement with African countries from development aid to infrastructure. Here is my brainstorm in preparation for that talk, with some edits.

During the IMF Spring Meetings a couple weeks ago, I heard a theme of working with the private sector to foster investment on the continent. For the past several years, the conversation around Africa’s economic engagement with the rest of the world has often circled around the phrase, “trade not aid.” President Obama’s Doing Business in Africa Advisory Council held its first meeting last month and discussed setting an ambitious goal for doubling US trade market share across Africa – 7 percent to 14 percent. The U.S. has watched China overtake market share the past several years, going from 3 percent to over 14 percent. 

The reality is that for effective trade to happen, you’ve got to have the infrastructure, systems, markets, etc for it to make sense. I worked on a project several years ago where a client wanted to import peanuts from Ghana during a drought Georgia was going through. Making that happen would have been difficult because of how long it would have taken the nuts to get from Upper East and Upper West Ghana to port in Tema. While Ghana has invested in road infrastructure, connecting northern Ghana with the rest of the country, there is still a lot of work to do. 

This is where private investment on the continent comes in, filling the gap between the “trade not aid” tag line. The developments here are exciting, especially for investments led by African investors. For example, pension funds on the continent seem to be gaining comfort in being limited partners in alternative investments likes private equity. Hopefully, the African Development Bank is close to launching the Africa50 fund it announced a couple years ago. Alike Dangote and the Blackstone Group are partnering in developing power projects. The list goes on. 

While these are exciting developments, I’m wrapping my head around the reality that bridging the gap between aid and trade is not a something that will happen quickly. This could very well be something my daughter works on (hopefully). So much of the continent’s development is interconnected when thinking about port access, broadband penetration, and transportation. It’s hard to compare to China’s rapid development or that of South Korea and Singapore. I’m excited about the continent shaking loose and carving out its own path. 

I Enjoyed Speaking at Yale’s Sankofa54 Conference

I am on the train headed back from Sankofa54: The Youth Empowerment Conference, nicely put on by the Yale Undergraduate Association of African Peace and Development. I spoke on a panel addressing Africans Investing in Africa, an issue that has kept
me awake at night since high school. The other panelists were Solomme Lemme, founder of Africans in the Diaspora, and Adewumi Mobolaji, special advisor to the CEO at Aso Savings and Loans Bank.

Solomme challenged the audience to imagine the impact 1 percent of the 60 billion dollars that is remitted to African countries could have on development if targeted towards initiatives focused on creating transformative change on the continent.

Adewumi covered macro developments that are creating the environment for increased investment on the continent, while also highlighting challenges that are still present in the quest for a strong investment climate on the continent.

I found a way to weave an Anansi story into my talk – major win.

One of today’s keynote addresses came from Ladi Delano, an entrepreneur who has been getting it done for about a decade. He made some great points on the need for the extermination of Africa’s corruption problem. He discussed the need for greater manufacturing to meet consumer demand. He cited a recent meeting he had with the head of Massmart Nigeria and how little sense it made to him learning that all of its products are imported.

Another keynote speaker was Obinna Ukwauni, a senior economics major at MIT. Beast. This guy has started an initiative to teach robotics to secondary school students in Nigeria with support from organizations like Shell and Innoventures – quite impressive. He plans to use this as a step towards launching a school in Nigeria in partnership with MIT’s Media Lab.

Last night, Nobel Prize recipient Leymah Gbowee discussed the challenges of being a mother and in-demand activist. She did not regret having missed a significant portion of some of her children’s lives on account of her belief that she was laying the foundation for their futures. Tough.

I was really impressed that undergraduates put on a conference of this caliber and I appreciate YAAPD inviting me to speak. I look forward to next time!