Arena Africana 2:

Africa’s latent entrepreneurial class

Date: Thursday 10 November 2005
Time: 8:00 pm – 10:30 pm
Location: De Balie, Kleine-Gartmanplantsoen 10, Amsterdam
Reservations: 020-5535100


Keynote speaker: Lucia Akosua Quachey
Entrepreneur and co-founder of the African Federation of Women Entrepreneurs (AFWE); founding president of the Ghana Association of Women Entrepreneurs (GAWE)
Chairperson: Dr Gerti Hesseling
Chair of the Netherlands Development Assistance Research Council (RAWOO); former director of the African Studies Centre

Referent: Hans Boon
Vice President, ING Postbank. Within ING, Mr. Hans Boon is Vice President with overall responsibility for cooperation programs involving the development of Postal banks, Postal financial services, and postal networks. Migrant remittances and payments systems development have a specific focus in these projects.
Referent: Anver Versi
Editor at African Business. Winner of the 2005 Diageo Africa Business
Reporting Award for best publications and best journalist
Discussant: Felix Awunou
Entrepreneur living in the Netherlands, doing business in Africa


Issues to be addressed
When considering the structural conditions that are influencing and hampering the development of a healthy investment climate in Africa today, many levels of the market, policy and behaviour can be taken into account. Arena Africana part 2 will focus on the internal business dynamics in African countries and discuss the factors that affect the realities of doing business in Africa for different groups. What can be done to ensure that these realities will be influenced in favour of the 'developmental state'?

The dominance of the informal sector in most African economies, the position of women in society, the image of Africa itself and the high risk rate for direct foreign investments are all factors influencing the investment climate and the way in which businesses can grow and contribute to domestic African economies. When African economies graduate to be characterized predominantly by formal business, what happens to those that do not make the grade? Will women, for instance, necessarily lose out in what should be a positive process? Who will have access to the financial services that NGOs and commercial banks seem eager to provide?

The capacity of financial institutions to absorb capital that is generated by private enterprise is an important part of the picture, and one which is not complete without including the role of consumers. The growth of the market in cellular phones in Africa has had an impact on a social and even a socio-political scale, aside from generating an income for entrepreneurs and their employees. Africa's latent entrepreneurial class is part of a growing middle class of consumers. They too, as a social group, can contribute to the formation and strengthening of a 'developmental state'. But how? And how will commercial banks, the international community, civil-society organizations, micro-finance organizations like NGOs (both local and international) and other parties support this surging African middle-class?

Other questions
What are the challenges facing African entrepreneurs living in the Diaspora? How do cultural realities, like extended family relations, impact on the success and growth of private enterprise in Africa? And taking these realities into account, what would a viable strategy be to ensure the highest returns for private enterprise and to stimulate African development and achieve the millennium goals?

Facts vs. image
Contrary to the widespread image of Africa as a place of corruption, poverty and anarchy, and in spite of the high risks for direct foreign investment, the growth rate of African businesses is impressive. This is not only the case for micro-enterprises that are often financed by (international) NGO programmes. Large import-export venture-capital companies are also enjoying high returns on their investments and, in fact, the continent offers the highest returns in the world on direct foreign investment. The Ghana Stock Exchange regularly tops the list of the world's highest-performing stock markets, according to Carol Pineau, the director of the documentary film 'Africa Open for Business'. But though the facts about the African business climate are positive, the image – and this is what counts when trying to attract foreign investment – remains bleak.

Private-sector development
African businesses are thriving and the market, consumers and the African middle class are growing rapidly in response. The success of micro-enterprise at one end of the spectrum and large domestic companies providing access to modern technology, like cell phones and the Internet, at the other, shows an Africa that is usually not portrayed but that is obviously having a vital impact on the economic development of African countries. Private-sector development, including the development of the financial sector in delivering wider access to services like credit and loans, is an important aspect of joint international efforts to support African economic development.

The informal sector
The non-agricultural informal sector in Africa is huge, and its scale in primarily urban areas is often the result of migration from the countryside. Employment opportunities in the cities are insufficient to absorb this labour force, so the unemployed have to find other ways to earn a living. Women, in particular, generate income from the small, high-risk enterprises that dominate this sector. But however large its share may be in African economies, informal-sector activities are often seen to be contributing little to sustainable economic development and may actually be playing a considerable role in sustaining poverty.