No. 16: 3 Tuesday AM Reads – Davidson Grad Gets a Promotion |JP Morgan Has Plans for Africa | Gabon’s Energy Sector at 30,000ft

  1. I nearly clicked my heels when I saw the news of Amrote Abdella being named Regional Director of Microsoft’s 4Afrika Initiative, an effort for Microsoft to support economic development on the continent while finding new business opportunities. I’m a big fan of Amrote’s. Seeing Davidson alumnae killing it will never get old.

  2. What is getting old is American business news anchors not believing that there is opportunity to do business in African countries. See Stephanie Ruhle’s face during her interview with JP Morgan’s Jamie Dimon at the 25:40 mark. At least Stephanie listened. Check out this interview Trish Regan did with McKinsey Director, Acha Leke, last year.


  3. Interesting analysis of market headwinds Africa’s oil and gas industries face and how consistent regulatory policy could help mitigate the impact of dropping energy prices. Speaking of consistent regulatory policy, NJ Ayuk and his Centurion law firm, put out a guide to Gabon’s energy sector, including an explanation of its new hydrocarbons law.

No. 15: 3 Thursday AM Reads – Paga Raises $13m | Organic GMOs | Reid Hoffman is Networked

  1. Tayo Oviosu and the Paga team are pushing their dominance in Nigeria’s mobile payment space to the next level with the $13 million Series B round of financing they announced earlier this week. A couple things I need to look into: Now that the Central Bank of Nigeria is implementing its cashless policy, how is it going? Also, what is Paga thinking about Bitcoin?

  2. A couple weeks ago, Cherae Robinson and I were laughing about how ┬áher schooling me on GMOs led to me joining the Afripolitans in Equatorial Guinea a few years ago. Here’s a compelling piece on the prospects for organic GMOs. I wrote about my concerns with GMOs several years ago. My thinking on GMOs continues to evolve and I found this piece helpful in surfacing more questions.

  3. Those who know me will understand why I got lightheaded reading this profile on Reid Hoffman. Towards the end of the piece, his conversation with James Manyika, someone I’ve followed for a number of years, chrystalizes the types of conversations that drive me. Hoffman’s practice of pulling out a list of things to discuss during his conversations with friends is something I’ll probably copy (those hits to the head while playing football seem to be showing their effect on my memory more these days…).

Why You Should Pay Attention to Africa’s Retail and Fashion

For us, today, Africa is more important than the U.S. In five to 10 years, Africa can become the new frontier for luxury. – Ermenegildo Zegna

While reading this Quartz piece on Africa’s fashion opportunity, I came across this Global Retail Development Index put together by A.T Kearney. The Index ranks the top 30 developing countries for retail investment based on market attractiveness, country and business risk, market saturation, and time pressure. Time pressure relates to how quickly a country’s retail sector is growing. If it is growing really quickly, a retail investor needs to move fast to take advantage of growth before it’s too late.

Botswana (18th), Nigeria (23rd) and Angola (30th) are on the list for 2015, with Ghana, Zambia, and Namibia on the verge of breaking onto the list.

The report points to Sub-Saharan Africa mirroring China in 1987 when retail brands were beginning to enter the country. Nearly 30 years later, retail growth is extremely fast and retailers are beginning to really focus in on profitability now that they are approaching scale. The authors of the report believe Africa could be at this point in 2040 or so, though it will probably be a bumpy ride.

One of my mentors was recently telling me about the tens of thousands of dollars of champagne his clients bought during a night on the town in Lagos a few years ago. It’s no secret that Nigeria’s wealthy have a lot of disposable income and that champagne is in demand on Banana Island. I had no idea, though, that retail sales of champagne in Nigeria was second only to France. The report authors point to this as an anecdote on the opportunity for luxury brands in Sub-Saharan Africa.

Speaking of luxury, Hannel Rupert, a South African entrepreneur, wrote an op-ed in Business of Fashion calling for luxury brands to partner with Africa’s fashion industry, moving beyond fashion for charity campaigns or one-off collaborations. A good place to start, in her opinion, is to bring some end-process manufacturing to countries like Ethiopia, Cameroon and South Africa which have strong capabilities in areas like leather crafting.

I worked on a retail project a few years ago, working with a client who had quality issues with its product lines but wanted to figure out a way to tap in the U.S. retail market. Established brands bringing their expertise on details like this could help deal with issues like this. At the same time, there are already a burgeoning number of African fashion shops that put out really high quality material. Having access to end-process manufacturing that matched their products could help them reach scale in Africa and the rest of the world.

As an aside, I finally watched Jidenna’s Classic Man music video. Does anyone know if Ikire Jones made the white blazer Jidenna wears in the film?

As a further aside, Angola made the list for the Global Retail Development Index. I’m sure a lot of folks immediately thought about Luanda’s high cost of living. The New Yorker has a piece in its June 1 issue on the inequality of Angola’s oil boom. The author cold have spent more time on the U.S.-Russia proxy war. Over the decades that Angola was in civil war, how U.S. support did Jonas Savimbi and UNITA get? What more detail can we get about the Heritage Foundation, Grover Norquist and Jack Abramoff supporting Savimbi? How was President dos Santos able to maintain control in the face of a U.S.-supported rebel group? How did all of that contribute to Angola’s current political and economic environment? Just a few questions the author could have explored.

Back to fashion. The Quartz Africa piece mentions McKinsey’s Lions on the move report that came out in 2010. The authors forecasted spending power in Sub-Saharan Africa reaching $1.4 trillion by 2020. Perhaps a halfway-point check-in on how the continent is doing relative to that forecast is in the works?

This African fashion conversation is very exciting and I look forward to seeing where it goes. As of late, President Muhammad Buhari’s swagger has had me thinking about taking Traditional Wear Fridays to the next level and pulling out the Fugu.

Photo credit: Daily Mail | Nigeria

President Obama’s Business in Africa Advisory Council Held First Meeting This Week

Last year, Commerce Secretary Penny Pritzker stood up the President’s Doing Business in Africa Advisory Council, a group of small, medium and large US businesses currently engaged in business on the continent and tasked with helping shape U.S. policy for business engagement with the continent. 

The makeup of the council is very interesting. You’ve got people ranging from Dominic Barton, head of McKinsey, to Kevon Makell, head of a renewable energy consultancy based in Charlotte, to Karen Daniel, CFO at Black and Veatch. 

If you’re as slow as I am at washing dishes, that two hours will give you enough time to watch this two-part recording of the advisory council’s first meeting on April 8. 

Part 1

Part 2 

Three things caught my attention during the meeting:

  1. Mr. Barton challenged the Council to think big, specifically in positioning the US to double its share global trade with the continent in five years. In 2013, our share was down to 7 percent from 13 percent in 2001. Compare that with China which has gone from 3 percent to 14 percent in the same window. 
  2. Wal-Mart was very clear in communicating that African countries not meeting its logistical needs amongst others should not expect partnerships equal to what countries that did meet their needs would experience. 
  3. The various US agencies that have significant engagement on the continent don’t really know what tools they have respectively for engagement on the continent. This includes OPIC, USAID, the State Department, and the U.S. Ex-Im Bank. Their representatives seemed to agree on the need for better coordination. 

One of the recommendations that stood out was a US-Africa Infrastructure Center which would equip US infrastructure developers to more effectively compete for deals on the continent. This struck me as a platform that could be helpful in tracking progress in closing the gap on the World Bank’s projection of $93B per year for 10 years investment in infrastructure across the continent

Further, the platform could serve as a helpful marketing tool in showing the effectiveness of US infrastructure developers in terms of time to completion, total project cost, lifespan of finished projects before maintenance, among other metrics.  Then again, it may be a better move to invest in the work already done by the African Development Bank, World Bank, and other stakeholders in setting up a platform focused on infrastructure development. 

The council meets next in September or October. I look forward to tracking their progress. Hopefully, I would have figured out how to be helpful to their work in some way by then. 

Africa’s Agricultural Potential – What’s the Cost?

At what cost will Africa realize the economic potential of its agricultural industry? According to McKinsey & Company, about 60 percent of the world’s uncultivated arable land is on the African continent. A few months ago, NPR did a piece on how Brazil has leveraged science to establish the country as a breadbasket. While listening to the piece, I thought about the model Brazil presents for African countries. Initially excited, I then thought about the potential costs of producing genetically manufactured (GM) foods.

Embrapa, Brazil’s government-run agricultural research institute, has done significant research to find ways for various types of crops to grow in the country since the 1970s. This research has led to enormous economic output. According to the Economist, Brazil drove the value of its crops from $23 billion in 1996 to $108 billion in 2006. Furthermore, the country is only using 12.5 percent of its 400 million hectares of uncultivated arable land. The Economist article qualifies these figures with the caution that Brazil drove agricultural growth systematically, and that growth on the African continent will not come quickly. Brazil spent years improving its soil, in concert with seed development. These developments led to new farming techniques that have enabled farmers to significantly increase their yields.

One can imagine the implications of Brazil’s agricultural growth for the African continent. McKinsey and Company projects that by 2040, African countries can increase the collective value of their agricultural output from $280 billion to $880 billion. To do this, countries will have to bring more land into cultivation, increase crop yields, and replace low-value crops with high-value crops like fruits and vegetables. Furthermore, if African countries are not able to implement these key drivers faster than Brazil has, 2040 will not be the year that the continent realizes $880 billion in agricultural output. The celerity with which African countries have driven the boom of the mobile phone industry makes me hopeful that it will be able to implement agricultural growth at a faster pace.

My tension lies in Brazil being second only to the United States in utilization of GM crops. Proponents of GM foods point to the necessity of these crops in establishing food security and production levels for generations to come. Critics argue against GM crops due to their potential danger to humans, and the threat they pose to other plants. A number of African countries are already producing GM crops, and scientists in Brazil continue to develop new plant technologies and farming techniques. Scientists, farmers, and policy makers are going to have to commit to thoroughly vetting the costs and benefits of employing GM crops in pursuit of a robust agricultural industry on the African continent. The economic potential of agriculture on the continent is quite impressive and will be an obstacle to objective cost-benefit analysis of policy options. Decision makers must champion thorough research and holistic conversations in shaping the premise on which countries drive agricultural development efforts. Without this hard analysis, the realization of Africa’s agricultural potential could come at a significant cost to the continent’s one-billion people.