The emergence of homegrown African multinationals over the past decade is one of the great African success stories of the 21st century.
Companies like MTN, UBA, Shoprite, Oando, Ecobank, Dangote, Equity Bank, to name a few, have been shining examples of pan-African success; homegrown brands that are re-writing the African story, and helping transform and integrate the continent through their cross-border investments. Because of these companies, intra-Africa FDI – ‘Africans investing in Africa’ – has seen a spectacular growth, never before seen in the continent’s history. Without a doubt, these companies are champions of Africa’s emergence.
The AfroChampions Initiative wishes to support African emerging multinationals by advocating a set of game-change policy initiatives to encourage intra-African FDI in the next 5 years. One of the big proposed ideas is to create ‘african hubs’ that attract and enable African multinational companies and investors to flourish. This is the ‘Hub project’ that we are developing and that we are putting forward in our discussions with the committees in charge of defining the legal framework of the future African Continental Free Trade Area.
The key reforms needed for the AfroChampions Hub project, are focusing on visa free access for African investors, creation of special work permits for Africans operating around ‘African Reference Projects’ (ARPs) fiscal incentives to encourage intra-African investments from individuals and companies, facilitation of company setup and JV setup. We are also considering promoting on a regular basis a database of identified ARPs.
Following the official announcement on the side-lines of the African Union Summit in January 2017, the AfroChampions team has been reaching out to all relevant stakeholders, with a specific focus on African companies and African institutions and officials. It is indeed our view that only a stronger, more frequent and constructive dialogue between private and public decision-makers will allow for this ambitious project to become a reality. The Hub project requires commitment, expertise and ideas from both sides.
Q & A
An African multinational operating in a few countries has an incredible impact in terms of job creation, revenue generation, GDP contribution (for the biggest ones) and sometimes even on infrastructure development – some of these companies are driving public investments for roads, airports… So we need more of them to accelerate the development of our continent.
This is the rationale behind the AfroChampions Hub Project – marketing Africa-based investment opportunities to Africans to incentivize them to put money in the continent and not elsewhere. African investors will thus make money, while making a positive impact and initiating new ecosystems enabling younger entrepreneurs to emerge.
There is no example of a region which has been successfully developed only out of foreign investments. At some point, you need genuine industries, financial markets, economic hubs – and this is also the rationale behind the development of regional integrated markets like in the European Union or in Asia with the ASEAN.
We have to shift the paradigm in our continent from aid to trade, because over the long term aid and institutional donors cannot drive a lasting development of Africa.
Good news: times have changed, there are already a number of African corporate successes that we can be proud of, and you see an increased number of African and representatives of the diaspora considering our continent as the land of opportunity. We have to build these regional hubs, market the sectors, the projects that can be game changing, and facilitate intra-africa investments.
The AfroChampions Hub project will be a major addition to the various initiatives by the AU, RECs and AfDB towards a Pan-African integrated market.
The AfroChampions Hubs will actually be structured around regional value chains to promote certain local industries; and each hub should include special intra-Africa investment desks within national investment promotion agencies. These desks will be supported by the AfroChampions Hub project office (AHPO) with its due-diligence and facilitation services, funded by client fees and donor funds.. Investors and companies that wish to access Hub country privileges may apply directly to investment promotion agencies or route applications through the AHPO’s special Hub investor care desk will facilitate due-diligence, fast-track compliance and pre-approvals on behalf of IPAs which shall issue final approvals. Applications that go directly to IPAs will be forwarded to the AHPO for fast-track processing.
We think pan-African.
An integrated African market means that economic players have understood that they have an interest in working together. Today, this is not the case mainly because there are not enough synergies between regions: you have too many examples of neighboring countries investing in the same industries, many pretending to become energy net exporters even if it does not make sense, etc. The beauty of the AfroChampions Hub project is that it will help determine in which sectors African countries are the most efficient so that each one has a comparative advantage and builds its own ‘hub’ accordingly – and, as a result, a ‘unique selling point’ to connect and trade with counterparts.
We welcome men and women of goodwill, we want a diverse team!
Our primary objective is to ensure a productive dialogue between the public sector and the private sector – so we want to bring together Heads of State, ministers in charge of economy, industry, infrastructures, investment promotion and also investment promotion agencies.
To make this a success though, we also need a resonance chamber – we need supporters, we need the economic and business media to echo the initiative.
Northern Africa is a very important fulcrum in the AfroChampion agenda. So far we have received expression of interest from sub-Saharan heads of state – but as we said already, we think pan-African. The 2017 AU’s Heads of State Summit was a major milestone for the integration of Africa as the Kingdom of Morocco joined back the institution – and obviously, in our project, we have an interest in leveraging existing successful hubs, like Casa Finance City that seems focused on clean tech financing. This is just one example to confirm that, from Tangiers to Cape Town, we can further integrate Africa.
As we say the priority is to encourage intra-Africa FDI and African investors should benefit from special conditions. Still, with the various hubs we can build a ‘pedagogical’ map of Africa for those foreign investors who are interested in local opportunities but do not know where to start. In that respect our project can be of great help to them.
The objective is to drive investors’ interest towards truly game changing projects. The criteria that make sense in our view, are obviously project size and prospected impact – revenue generated, job creation, but also ability to accelerate cross border trade and result in the development of infrastructures useful to at least two countries. There will probably be two categories of African Reference Projects, regional ones and pan African ones. The description we provide certainly applies to big transport infrastructures or energy production initiatives. But it also applies to apps for services which could be scalable in a given region (thinking of Hello Tractor for instance, created in Nigeria, or I Cow in Kenya) – you can be small and impactful businesswise, there is no contradiction!
No doubt that Africa is ready for the next stage, judging from the reactions we receive on the project – we are lucky to be now supported by major players like Aliko Dangote, Founder of the Dangote Group, or Samba Bathily, founder of the ADS Group, and several former or current heads of state. The truth is that the AfroChampions initiative, while bringing a real regulatory change, is at the same time nothing but a way to support a movement that is already on-going. The young businessmen and women we know are always travelling between 3-4 neighbouring countries to reach out to clients and prospects. We see more discussions between French speaking and English speaking stakeholders. We do have venues where some of the reforms are discussed – thinking of the visa free petition for instance. We do have African reference projects, think of the Nigeria-Morocco gas pipeline. All these examples are very positive signals.
We have received support from former heads of state and heads of state currently in office. We are very grateful to His Excellency Pr. Alpha Condé, the President of the Republic of Guinea and President of the African Union in 2017 and to His Excellency Mr Olusegun Obasanjo, former President of the Federal Republic of Nigeria. Their encouragements mean a lot to us.
The reactions are very positive – we are officially supported by two personalities who carry a lot of weight in their area of influence, Aliko Dangote, founder and CEO of Dangote Group and Samba Bathily, Founder and CEO of ADS Group and the architect of the Akon Lighting Africa project. What they like, from what they tell us, is the fact that the project is addressing key issues by creating a forum enabling both private and public players to exchanges views.