London 20 January 2020. I’m on the road and I had a very exciting week. It began with the UK-African Summit in London organised by the British Government. The Europeans started cranking up their interest on the continent. After Germany’s conference in November 2019, the UK was – to my knowledge - the second country to host such an event in their capital city, followed immediately by France. The African presidents, finance and commerce ministers will have little time for local politics as their travel schedules will be filled with conferences to showcase their countries and sell the investment opportunities. The UK – Africa Investment Summit started with Prime Minister Boris Johnson’s speech. It outlined the spirit of co-operation and collaboration. We need you as much as you need us. The UK brilliantly sold their financial markets with the launch of two government bonds being listed on the LSE and highlighted the strength of the London Stock Exchange. Did you know that 112 African companies are listed on the LSE with a market cap of £125 billion?
Even though it was a large ticket event with many heads of state and big industry represented, there was a platform for sustainable SMEs and younger entrepreneurs.
What did I take away from the Summit?
Zambia was one of the countries that was not officially represented. It is a global platform and I believe that it makes sense to be at such events to showcase the abilities and potential of the country and its industries. I was happy to bump into Betty Wilkinson from FSD and Monica Musonda from Java Foods there.
The UK does reach out to the whole continent politically as well as for investment and trade. London is one of the biggest hubs for Africa abroad and it does not seem that Brexit will dent that, perhaps the contrary is true. CDC made a timely announcement that they will invest 1billion pounds this year and next year, no doubt a welcome boost for investment on the continent.
Generally, the main complaints of businesses that invest in Africa are red-tape and uncertainty of laws and taxation. With some concerted effort to tackle these ills, countries could move up the ladder in ease of doing business and attract more FDI. This is not news but what a shame that not more countries work on this as a priority.
Rwanda is still the investment darling of the West. The story resonates and the government follows-up with positive action especially when it comes to good governance. They build trust and trust builds a belief in and positive perception of the country. Again, something to look at and learn from. I will come back to “trust” later but for now it is transformational and can create the necessary goodwill to businesses and other interested parties who are active in the region. International players want to see more Rwandas and there would be more development and investment money available for them.
The mood was very upbeat in London and I would be amazed if the case was different in Berlin or in Paris.
Moving from the backdrop of Canary Wharf that is constantly expanding and growing, to the imposing alpine mountains of Davos to the World Economic Forum, an event of epic proportions. Yes, my carbon footprint was appalling but I’m compensating with my investment decisions and the WEF put in a series of measures to offset the carbon and environmental footprint of its participants as well.
I consider Davos as one of my homes. My skis are parked there, and I spent most of my winter holidays in the snowy mountains of Davos. I did not recognise the town. Imagine a convention centre brought into the high street. Every shop, bar, restaurant, public space and even apartments restyled into pop-up venues. The goods and interiors moved out and the event planners transformed the spaces for industry, NGOs, interest groups, block-chainers, universities or countries and provinces (mainly from Asia and Eastern Europe). There are a series of “by invitation only” events and as the week progressed, we ended-up being invited to more and more of these. No, I did not meet Trump or Greta, but everyone was relieved once Trump left as security was less tight and the internet speeds improved on people’s smart phones. I had discussions with Governors of Banks, CEOs of Fortune 500 companies, exchanged a few words with billionaires, deans of universities, geeks, investors, entrepreneurs, heads of large charities, European and African royalty and many more. There are no boundaries. Everyone is there for two reasons, to promote their cause and to expand their network.
I was invited to share my Zambian / sub-Sahara Africa thoughts on Energy Transformation with a presentation, followed by panel discussion and I attended a second panel on the Circular Economy. Thanks to the drilling from the 30Thirty team before my travels, both presentations and the panel went very well. It was great to put the Zambian perspective across, which is difficult for the uninitiated to understand the energy situation when one is sitting comfortably in a heated well-lit room, while it’s minus ten degrees Celsius outside. Being on a panel with academics, investors, advisors and top CEOs among others was a great experience. The view of a Zambian impact investor fascinated many people.
My take-aways from Davos
ESG, Environmental Social Governance, is in everyone’s thoughts. It’s not only a catchphrase anymore but receiving serious consideration from Industry. The ones that dipped in their toes, like Facebook who used pop-up furniture made from old chopping boards, vegan milk was on offer at Palantir and Coca Cola produced 300 bottles that contain 25% plastic harvested from the oceans will most likely need to step-up next year. The death knell has sounded for the coal industry with no finance flowing their way and it looks like the oil industry will be next. Banks providing credit lines to Arctic and deep-sea drilling are having to rethink their actions because they are seen by shareholders as enablers. And those enablers may very well be next in line to come under fire; Credit Suisse for example is feeling the backlash already for its investments in fossil fuels. The same will happen to larger accountancy firms, law firms, partners in the delivery chain, off-takers and others unless they have an active ESG policy and enforce it.
ESG is not only about the E. Mining, wind parks, tourism, factories, agri businesses are facing questions from their stakeholders about their social impact. How do you involve the community? Show us the results of your actions? Getting this right may become the largest risk management tool for big industry in the future. The G is probably already more ingrained in companies’ behaviour. Without proper governance, which is not an optional extra anymore, there can be no trust, and this brings me to the next take-away.
Trust. I cannot count how many times I have seen and heard this word in the days spent in Davos, the UK-Africa summit before and in my post-Davos meetings. There was not a single panellist, key-note speaker, round-table participant who did not use the word. Is it the blockchain industry, which was omnipresent in Davos, that is pushing Trust on the agenda or is it just the mantra of the moment? My take on it is that we are seeing a transformational shift. Everyone has millions of data points about themselves in the Cloud and we are afraid of how it’s used and what we can do to protect ourselves. There have been horror stories in the food sector from Salmonella in eggs or whether Apple uses metals that were sourced from mines that use child labour? All these have contributed in making Trust such a hot topic. Blockchain seems to provide certain answers on many of these questions. It can lead to accountability, traceability and provides providence of source. Food, bank accounts, transmittances, title deeds, public services and many other applications could massively benefit from blockchain technology. We give away so much personal information to unknown sources and purposes and trust others, whoever they may be, to do the right thing in safeguarding it. On the whole it creates massive new industries and opportunities. I believe that trust is not pushed by the blockchain industry but that it does create one solution which brings back to us that much needed confidence and assurance.
Africa was represented at the Forum but more so at side events rather than on the big stage. I attended the first Africa Roundtable at WEF that brought Swiss and African industries and thought leaders together. Trust was a topic here as well. The overseas investors and companies want to understand who they are dealing with, are they receiving the correct information, or will the laws, regulations and taxation remain the same down the line. I did hear of opportunities but this time we heard more about the perceived threats, about people not putting all their eggs in one basket and if then rather a quail’s egg, taking their time and not being rushed into decisions. It’s important to hear from investors on the continent and to see what their triggers are. Other Africa events were more one-dimensional. A promotion of an individual country, which is good to see since we do need to attract more FDI. South Africa, Botswana and Ghana were the most prominent.
Africa House 2021 is on the agenda. A venue in Davos that brings investors and the promoters together. It will be business-driven and not a country show. Many countries and regions have these pavilions, Canada, India, Turkey among others. Some proved very popular, Caspian Week stand, consisted of countries around the Caspian Sea except Iran, had people queuing up to get in. With good events, quality speakers and an open and welcoming atmosphere, it is easy to see how Africa House could become a showcase for the scope that the Continent offers. Let’s hope that we can raise the funds necessary to realise this aim.
To conclude. I see us on the brink of a transformational decade. There is a shift in ways companies are adopting ESG topics. There are conscious approaches to the environment through CO2 or plastic reduction, attention to deforestation or risks from large man-made and natural disasters. The social adaptation to a new reality where topics such as diversity, inclusion, child labour or consumer protection become a part of the business plan as well as governance issues that become ingrained on board and executive levels. Shareholder or stakeholder? Who will be ending up on top? Talking and listening to the large companies at the events, they want to push for the shareholder but seem to be under a lot of pressure from the stakeholders who give them currently a massive run for their money. Yes, the shareholder can vote to leave one sector and invest in another, but the stakeholder has taken up a policing function, which keeps or leads the company - and by the way in many cases also the shareholder - on the straight and narrow path. I can’t see this pressure fading in the near future.
And what does that mean for Africa? It’s totally up to the continent or rather its individual countries to decide how they engage on that front. There is a clear paradigm shift happening but that is where the opportunity lies. To attract investors, it’s up to the willing to establish the trust agenda and shift to a visionary future that benefits both stakeholders and shareholders.
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