Lessons from the World Economic Forum
South Africa recently hosted a meeting of the World Economic Forum (WEF) where a number of international speakers gave some insight into the current state of the international economic landscape. The role of Africa in this landscape was also given particular attention.
FAnews caught up with Jan Schoombee, Chief Commercial officer International MMI Holdings, to reflect on the Group’s experience at the meeting.
Real benefit
The fact that South Africa was given the opportunity to host this meeting provided a number of companies an opportunity to engage with each other and with international delegates on key issues that need to be discussed in order to improve business on the continent.
Schoombee points out that MMI is very interested to be involved in the debate around the challenges and opportunities on the African continent as discussed at The World Economic Forum Africa meeting as the group feels it has a vested interest in helping build the countries it is invested in to the benefit of its inhabitants.
“MMI Holdings, as a Regional Associate of the WEF, found real value in engaging with other government, business and social leaders from Africa and the world on how to accelerate economic and social development on the continent,” says Schoombee.
A meeting of brilliant minds
“We have brilliant minds and talent on the African continent. The WEF meeting was well attended by young leaders from the continent who actively participated in the debates and discussions. A real benefit from the meeting was learning from the success stories in Africa,” says Schoombee.
He adds that digital technology will now allow ways for the continent to overcome these challenges, and many entrepreneurs are responding with solutions in industries as widespread as healthcare and entertainment.
Success in Africa requires an ecosystem approach where multinationals, entrepreneurs and government work together to create an environment that will foster economic inclusion and growth.
Opportunity calls
For a long time, Africa has been seen as the new land of opportunity as there are many growth opportunities on the continent as its middle class grows.
Schoombee points out that when one looks at Africa, you realise that nowhere else in the world is there a region so vast, with so much untapped resources. There is also a large anticipated population and a fascinating economic growth story.
“We expect the African population to increase to above 4 billion, from its current 1billion. That means that in the coming decades, Africa will be the most populous continent in the world. Participating in this market should be exciting for any company,” says Schoombee.
Carpe Diem
While Africa does present significant growth opportunities, the continent is dichotomous by nature. Three of the world’s five biggest growth markets are African, yet the continent is bereft with poverty.
“A growing African economy is only the starting point. If we want to grow in Africa, we need to help Africa grow, in a socio-economical way as well. Companies expanding into the region should always focus on social return on investment along with actual return on investment,” says Schoombee.
Obviously products that cater for lower income earners will play a big part in this. While many feel that there is a visible absence of this in the South African market, Schoombee points out that there are many companies who are now starting to cater for this market on a wider basis.
“Moving out into the African continent, it’s important to understand that there is no one-size-fits-all. Due to Africa's diverse nature, it’s critical that companies analyse individual markets, and put time and effort into understanding client needs and developing relevant customer value propositions for the particular African markets that are targeted,” says Schoombee.
It is very important to note that financial inclusion policy initiatives are driving some of the changes in Africa and creating opportunities. Schoombee notes that in sub-Saharan Africa, it is estimated that only 24% of adults have a bank account, even though Africa's formal banking sector has grown strongly in recent years.
Looking at the future
Schoombee points out that according to the International Monetary Fund, Africa will have the world’s fast growing economy within the next five years.
“Now is the time for the insurance services sector, especially in South Africa, to take the leap and start growing the continent, which is good news for Africa, both economically and socially. Currently, insurance services amount to only 1% of Africa’s Gross Domestic Product (GDP), compared to 12 to 14% of GDP in South Africa. This, coupled with higher growth rates, gives us an opportunity to improve livelihoods and create long-term wealth for the people of this growing continent,” says Schoombee.
Editor’s Thoughts:
The fact that Schoombee expects a significant population growth over the next few years, coupled with the fact that three of the world’s five fastest growing markets come from the African market points to massive growth opportunities. Do you agree? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
Comments
Possibly the time of biggest growth on the continent was during the years of colonialism and, since the withdrawal of the various European nations (let's not forget that it was colonised by the French, Germans, Dutch, Portuguese etc. as well as the English) growth has been somewhat stagnant if not declining.
What has not declined is the population who have suffered warlords, dictators, lack of education and skills, disastrous economic policy, nepotism and corruption on a massive scale.
This would also seem to indicate that although the population of Africa may quadruple, without a huge shift in management (read 'good governance') the future is set to get bleaker for the burgeoning population, leading in turn to greater poverty and unrest.
Hardly a recipe for future investment. Report Abuse