Sustainable Africa: Investment, Innovation and the Future of Global Trade
December 14, 2022
One of the great economic challenges across Africa and the Global South has been how to leverage natural resources and human capital toward widespread industrialization, entrepreneurship, and job creation. We engaged leaders from Africa, and African and U.S.-based companies in a discussion about the potential for the continent to deliver significant value across emerging sectors of the global economy and help scale these innovations around the world.
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Speakers included:
- Tom Alweendo, Minister of Mines and Energy, The Republic of Namibia
- Eyong Ebai, General Manager, Sub-Saharan Africa, GE Healthcare
- Kevin Garrow, Managing Director, Head, Natural & Renewable Resources Americas, Standard Chartered
- Theresa Henshaw, Deputy CEO, UBA America
- Teresa Hutson, Vice President, Technology & Corporate Responsibility, Microsoft
- Nathalie Louat, Global Director of Trade & Supply Chain Finance, International Finance Corporation (IFC)
- Mike Rosenberg, Co-Founder & CEO, Circadian
- William Salas, Ph.D., Co-Founder & Chief Strategy Officer, Regrow Ag
- Richard Voorberg, President, North America, Siemens Energy
Bloomberg participants:
- Ana Monteiro, Economy Editor, Bloomberg
- Jennifer Zabasajja, Correspondent & Anchor, Bloomberg
Event highlights:
Opening Remarks
Hon. Tom Alweendo, Minister of Mines and Energy, The Republic of Namibia addressed the need for equitable partnerships between African nations and investors. While economically small, the continent is rich in resources, mining the gold, uranium, copper and diamonds that are part of daily lives, globally. Yet, the products made from those minerals are not manufactured there. At the same time, investors need assurances that host countries have the laws and infrastructure that can sustain initiatives, without disruption. He noted that the entire continent contributes less than 4% of the world’s emissions, adding, “The fact that Africa is most at risk from the climate crisis should not be used against us.”
Industry: Unleashing African Innovation
Overcoming energy grid connection issues to make the green transition is vital, said Richard Voorberg, President, North America, Siemens Energy. “Generation is the new, sexy side” of the business but policies are needed, starting with permitting that allows for energy distribution across political boundaries, an issue that is also extensive in North America. “Infrastructure is a problem, globally, and we have to focus on that, otherwise, we’re going to end up with really good renewable resources that can’t connect to the market, and that’s a dangerous place to be.” Also needed is policy that will reduce supply chain issues, such as reducing duty fees, and incentivizing young people to become electricians and solar installers.
On unlocking the land’s potential in a responsible way, William Salas, Ph.D., Co-Founder & Chief Strategy Officer, Regrow Ag said agriculture is at the center of climate change. Africa’s vast differences in climate and soil chemistry present a range of opportunities for improving resiliency and climate benefits. “Sixty-percent of arable land there is degraded, so, there are opportunities to use scientific innovation and data innovations to connect outcomes for adaptation, reversal of degradation, sequestering carbon and improving nutrient cycling, that can be funded through blended finance.”
Governments can help facilitate economic empowerment by recognizing that it’s demand-driven, said Mike Rosenberg, Co-Founder & CEO, Circadian. He advocated for instigating a conversation with organizations, like the World Bank, that moves from rural power access to economic growth and business empowerment. “The main cost base for most commercial and industrial is electricity. They can reduce that if they move away from diesel to renewable energy.” He called for the development of subsidies for deployment or financing of renewable energies and noted increased interest in carbon credits. “The CO2 displacement is very real here. You’re not just replacing hydro, you’re replacing very dirty diesel from inefficient generators.”
Inclusion: Advancing Sustainable Economic Growth
Eyong Ebai, General Manager, Sub-Saharan Africa, GE Healthcare, which provides large-scale radiology equipment, said that the related digital solutions mean that where they install equipment, they can offer clinical applications training to the operators through tablets. When it comes to systems repair, they are handling 40-45% of it remotely, with a goal of getting to 80%, “just by dialing in, versus someone driving to a facility somewhere in the middle of Nairobi. The whole healthcare infrastructure development can only happen if it’s digitized.” In addition, being able to connect digitized patient records equates to better overall healthcare.
When it comes to healthcare access and much-needed digitization, part of the problem is infrastructure, said Teresa Hutson, Vice President, Technology & Corporate Responsibility, Microsoft, noting that only 40% of Africa is online. “From Microsoft’s perspective, it’s very important to get more of Africa online, and we’ve announced today that we’re extending our Airband initiative to cover a hundred million people in Africa by the end of 2025. It’s so foundational to all of this conversation. Across the world, where we see digital infrastructure in place, it does increase economic opportunity.”
Investment: Financing the Future of Africa
Nathalie Louat, Global Director of Trade & Supply Chain Finance, International Finance Corporation (IFC), spoke about a recently-released IFC report analyzing trade deficiencies and foreign investment in Africa. “What we found is only 25% of trade transactions are being financed. In the global market, that number is 60-80%, so there’s already a major gap there.” They also discovered that 25% of transactions presented to financial institutions are declined, mostly related to SMEs, importers and exporters, and the cost of trading in Africa is 2-4%, compared to less than 1% in the developing world.
Kevin Garrow, Managing Director, Head, Natural & Renewable Resources America, Standard Chartered, said they are working a lot with the underserved, including women and small-scale farmers. “We have sizable bricks and mortar on the ground, across the continent, but we are also looking at digital investments and digitalization. That’s a big push.” That includes assisting the agricultural industry with mobile payments, financial literacy, working with the government and NGOs, and access for the underserved. “Africa’s time is really now,” he said, calling the pandemic an opportunity to reset things, especially supply chains and partnerships. “There remain tremendous opportunities, but we have to change perceptions, especially working with our U.S. client base.”
Theresa Henshaw, Deputy CEO, UBA America, spoke about bringing more investment to Africa, from the perspective of the only Sub-Saharan bank in North America. SMEs are funded regardless of cost to the bank. Attracting investments requires more structure, ridding of corruption and more transparency. “The continent itself needs sustainability, and we need it to be scalable.” Further needed are public/private collaborations, for transparency that inspires investor confidence, investments that are sustainable, and financial literacy.
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