“A pessimist sees the difficulty in every opportunity; an optimist sees an opportunity in every difficulty. —Winston S. Churchill. In terms of economic development and prosperity, Africa has its share of challenges, but the continent stands out for the breadth and breadth of opportunities that await it. A number of significant successes have already occurred, led by an emerging and recurring class of talented senior executives.
Despite being the second most populous continent behind Asia, Africa’s 54 countries lag significantly on a wide range of economic growth measures. According to International Monetary Fundthe region accounts for only 2.84% of global GDP in nominal terms and is the second smallest continental economy in the world after Oceania.
Its GDP per capita is the worst of all continents (Oceania’s is 29 times larger, North America’s 28 times larger, and Europe’s 16 times larger). In purchasing power parity, Africa is the third smallest continental economy after Oceania and South America, accounting for just 4.97% of global wealth.
The region’s main socio-economic challenges include poverty, unemployment, underdevelopment of infrastructure and political instability. Poor access to health services and education is also common, and gender inequalities are widespread across the continent.
These challenges are complex and interconnected, and none of them have easy solutions. However, there are many organizations and, by association, many African leaders working to address these issues and improve the lives of the African population.
The benefits and potential that Africa represents are often misunderstood, overlooked, or both. The greatest challenges facing the continent also represent the greatest opportunities. Africa represents an extremely massive opportunity in a number of areas, including private equity and venture capital (VC), consumer goods, agriculture and agritech, cleantech, fintech, payments, e-commerce, life sciences and medical technologies, as well as ICT (especially with regard to data centers).
Demographically, the figures don’t lie: 17 of 20 countries with the highest population growth are in Africa. The continent has the youngest population, by far with a median age of just 18.8 years (Europe’s median age is more than double, at 44.4, and North America’s is not much younger, at 38.4 years).
What do these numbers mean? Essentially, Africa’s population of 1.4 billion is growing rapidly (expected to reach 4 billion by 2100), is extremely young and increasingly urban – the perfect burgeoning consumer demographic for a whole series new businesses.
New businesses that will be of particular value include digitized services and products that save time and transcend distance. Internet access is rapidly improving, with more affordable and faster plans, the thriving startup ecosystem is transforming the way Africans consume, buy and pay, and the region is committed to developing the largest market unique in the world, called the African Continental Free Trade Zone.
It could be argued that rather than an agrarian or industrial revolution, it is a technological revolution that will transform the fortunes of the African population. Arguably, this new era is already underway, driven by payments innovation, which has been a key growth driver for Africa. 67% of all mobile money transaction volume worldwide comes from Africa; The second best region is South Asia, with just 15%.
Africa is also still in the very early stages of e-commerce: only 12% of Africans have made a purchase online. “Africa’s Internet economy represents one of the largest overlooked investment opportunities of the last decade, with the potential for profound development impact,” a recent report said. International Finance Corporation and Google report on the subject.
An increasing share of investment growth continues to come from abroad, particularly the United States and Europe. In the venture capital space, they will be particularly attracted by the differentiated exposure that Africa presents, and if large international pension funds start investing, even if only in the form of 1-2% of their balance sheets, things could accelerate extremely quickly.
From a leadership talent perspective, NGS Global has worked with a wide range of clients who have hired key leaders in the Sub-Saharan Africa region, indicating considerable leadership transformation across the continent, led by to display some main trends in African executive talent.
- The rise of the African executive: There is a growing pool of talented African executives taking on leadership roles in companies and organizations across the continent. These leaders bring a unique perspective and skill set, and help drive Africa’s economic growth and development. There is also a strong desire by clients to hire local executives where they had previously hired expatriates – hiring Africans for jobs in Africa.
- The brain drain is reversed: In the past, many talented African executives left the continent to pursue opportunities, mainly in Europe and North America. However, the brain drain is reversing, as increasing numbers of diaspora executives return to Africa to run businesses and organizations. This is due to a number of factors, including the continent’s economic growth, growing opportunities for businesswomen and the improving quality of life in many African countries. It is worth noting that although this trend is not currently the case in South Africa, it is occurring in many other important sub-Saharan African countries.
- The importance of diversity and inclusion: Companies and organizations in Africa are increasingly recognizing the importance of diversity and inclusion within their executives. Indeed, a diverse workforce can bring a wider range of perspectives and ideas, which can lead to better decision-making and innovation.
- Use of technology: Technology is playing an increasingly important role in the recruitment and retention of executive talent in Africa. Businesses and organizations use technology to source candidates, assess skills, and track employee engagement.
- The need for training and development: African companies and organizations are increasingly investing in training and development programs for their leaders. Indeed, they recognize that the skills and knowledge required to be an effective executive are constantly evolving.
These are just some of the key executive talent trends in Africa. The continent is experiencing rapid economic and social changes, and these changes are having a significant impact on the demand and supply of executives. African businesses and organizations that can adapt to these changes will be well-positioned for success in the years to come.
Below is a sample of recent research that NGS Global has carried out on the continent in collaboration with some of our local and offshore clients. Each of these positions was filled by an African executive and not by an expatriate. These internships illustrate the above points about the region’s businesses and by association, African leaders, who have addressed the continent’s challenges and are creating opportunities that positively impact the lives of their fellow Africans.
- US-based private equity firm, financial services – Director of Operations (Africa role covering sub-Saharan Africa)
- Listed food/consumer products company in East Africa – Group Managing Director and Commercial Director (Kenya)
- Listed financial services company in East Africa – Director General (Uganda); Director General (Kenya); and Group Head of Marketing and Communications (Kenya).
- Leading food manufacturer in Africa – Sales Director (Kenya, Zambia, Tanzania).