In 2021, the world over, people are continuing to hold hope as scientists across the globe continue to search for a solution to the global pandemic, COVID-19, which has forced economies to tumble and left more than one and half million people dead.
Economies across the world are implementing a variety of fiscal measures to tackle the pandemic that caused a public health emergency and to offer relief for businesses and the population at large.
In Africa, the economy that was projected to grow by 3.2 percent in 2020 is now expected to fall to –0.8 percent. While the containment measures keep people safe, the disruption caused by these strategies have left many industries, especially the financial industry and travel and tourism sectors, paralysed.
To address the many effects of the pandemic, Africa must re-strategize to not only cope with the situation, but also come out of the crisis stronger. It is in these efforts to support businesses to thrive in the wake of the pandemic, that Africa Women Innovation and Entrepreneurship Forum (AWIEF) hosted its 6th conference. The online conference held December 2 to 3, 2020, was themed ‘Reimagining business and rebuilding better.’
Also Read: Investing In Africa’s Education: How The Pandemic Has Changed The Dynamics Of Learning!
It attracted business leaders from across the globe. The leaders discussed a range of topics including: the role of technology in rebuilding the economy, regional food trade, entrepreneurship, and gender inclusion in building back better.
Key speakers included: H. E. Wamkele Mene, Secretary General of the African Continental Free Trade Area Secretariat, Landry Signé, Senior Director and Full Professor, Thunderbird School of Global Management and Keisha Lance Bottoms, Mayor of the City of Atlanta, among others.
We have a narrow window of opportunity to rethink and rebuild the continent after the pandemic. Leaders from different sectors shared their views on how Africa can come out of the crisis stronger.
Responsible and responsive leadership – Kunle Elebute, Chairman, KPMG Africa & Senior Partner, KPMG Nigeria
The biggest challenge in Africa when it comes to its economy is the large informal sector. Millions in this sector depend on daily income to satisfy their everyday needs. Thus, when the lockdown was put in place, these businesses and the people depending on them could not afford to be in lockdown for more than a few days.
Africa’s informal sector, which forms the bottom of the pyramid population, was vastly exposed to the effects of the pandemic ranging from inadequate access to healthcare and insurance, among other challenges. The pandemic thus clearly exposed the weaknesses of the continent when it came to providing the much-needed support to the informal sector to thrive prior to, as well as through, the pandemic.
Africa’s informal sector engages between 80-90 percent of people who often rely on trading simple goods and services to make a living. Sector data shows the number of people in the informal economy in Kenya stood at 14,865,900 in 2018, an increase from 9,327,100 in 2010. Thus, when the pandemic hit, millions of informal sector workers, already at risk of being excluded from basic services including access to healthcare, water and sanitation, were further exposed to extreme poverty and food insecurity.
To make the necessary change, the continent must redefine ‘responsible and responsive leadership’. For example, most of the continent’s pharmaceutical needs are imported from China or India and when COVID-19 hit, these countries were not able to meet their local needs as well as Africa’s. Moreover, Africa depends on exporting commodities to the first world, and bringing back manufactured goods, whereas, Africa could build local industries and trade within the region.
Additionally, many African businesses suffer due to lack of scale advantage, thus are not able to compete with global players. The only one showing some improvement in terms of scale is the telecom industry. Telecom is driving payments and banking services as in the case of Safaricom in East Africa. Consequently, African corporates must be resilient around scale and impact to be able to provide enough for the continent and export the surplus.
Also Read: From Jack Ma to Safaricom, coronavirus unites all peoples
There are several ways that Africa can rebuild, but real change will come by adopting the African Free Trade Zone Agreement, which will open the corridors allowing the continent to be less dependent on imports, especially food items.
Finally, governments need to look at social investment around human capital such as education and healthcare. Due to the inadequacy of our education systems, many young people find themselves travelling abroad for further education. However, many don’t return to build the continent finding jobs abroad leaving Africa deprived of their great contribution to build the economy.
Education, training and digitization – James Mwangi, Director Dalberg Group
The nature of work and the nature of relationships between workers and employers was already shifting and that shift has been massively accelerated in the past year. In the previous century, people left university with great academic qualifications in a particular field and found a ‘good’ employer. This was the beginning of a long-term commitment with the said employer. This norm was enjoyed by a tiny minority of the population. Largely, this was the norm around which Africa set its education systems and policies.
Today, this norm is being broken to accommodate the changing economic sector. With the rise of the gig and digital economies in the last decade, there has been a big change. More and more people especially the youth are moving into the informal sector and are also running multiple parallel arrangements to widen their incomes. Thus, there is need to think about skills training to support this population.
Also Read:Low income earners hardest hit by pandemic
The pandemic has shaken up the economy and some businesses will not come back the same way as they used to, such as travel, tourism and hospitality. Additionally, at the moment, many people are working from home. “What does that mean to businesses that depend on a thriving and dense CBD (central business district) that attracts highly paid professionals every day from their homes into the city and back to their homes?”
This is a period of rapid change and rapid turns. It calls for people to learn and master multiple skills and re-assemble skills in terms of the different tasks and opportunities in the marketplace. How do you turn your skills into a service that you can sell online? Answers to this question will enable you to prepare for the next job online or otherwise.
What people and institutions should think about is the credentials. Certainly, the traditional methods of teaching must change to accommodate people to acquire micro-credentials focusing on practical skills and not just the qualification papers. Thus, education should be modularized. That way, instead of four year-degree programs, learners can acquire credentials in stages, which can allow them access jobs that fit these skills and desires in a given period.
With many people moving online, small scale businesses should also rethink about embracing the digital world. While there is digital work, which makes a small portion of the overall work, the digitalization of all work will make businesses thrive in Africa in the future. For example, in the future, a homeowner in search of a carpenter or plumber will probably not find such service through road signages in the neighbourhood, but by browsing the internet to find the highest rated skilled person. Only businesses available online will thrive.
Trading blocs and Regulatory frameworks – James Mwangi
It looks like the pandemic will strengthen regional integration. Following the pandemic, every major corporate decision–maker is seen to evaluate the length of the supply chain between the production centres and the consumers. By reducing that length, companies will save on the amount of output to deliver their products and services. Moreover, we are learning that we should not put all our eggs in one basket. How ironic that the major producer of the PPE (personal protective equipment) was the epicentre of the pandemic! This of course, meant that the world was frustrated when it came to meeting the demand and supply of these necessities. For the first few months, health workers could not be protected as the demand could not be met on time. There is need for businesses to diversify and shorten the supply chain.
Africa remains the fastest growing market in the world, and a continent with a high labour force which is good business. The continent needs to open up so that businesses are able to push their products beyond the borders especially within Africa. It’s time Africa thought about creating factories that will meet the demands of its population. We would rather have a factory in Durban, supplying products across Africa, than importing such items from Denmark, for example.
Frictionless transactions – Aida Diarra, Senior VP and Head of Sub-Saharan Africa, VISA
In the recent past, financial innovation has become stronger and more resilient making the business sector flexible. The shift in consumer demands following the virus outbreak dictates real time and frictionless transactions.
Also Read: Digital payments rush sees Visa, MasterCard clamour for Africa
Prior to coronavirus, there was a shift in the consumer ask, where real time and frictionless transactions were in demand and new banks with fintech solutions came into play to meet these demands. Moreover, smartphones moved from being a mere luxury gadget to becoming more popular among the masses. Nevertheless, cash still remained very much prevalent in Africa.
With the prevailing virus, businesses as well as people have been forced to move online to meet some of their needs. Data shows that up to 71 percent of consumers went online for the first time during the pandemic. Following the demand for swift dealings and to encourage contactless transactions, M–pesa, an East African telecom, increased daily mobile money transfer limits from KShs70,000 to 150,000 (US$700-$1,500) in the initial days of coronavirus.
Retailers and merchants who were not available online had to quickly adjust or risk closing down. Given the conveniences provided by the digital world, most businesses will continue utilising digital tools and environment even after the pandemic.
One of the positive aspects of the pandemic is that it has enabled fast acceleration of e-commerce throughout the continent. Thus, digitalisation today is more than a luxury but a need that a business requires to remain resilient and more flexible. As a continent, governments must enable small businesses to get online faster. Additionally, these businesses should be supported to allow them to access online payments, acquire the necessary skills in e-commerce and support in safe transactions online.
Supporting these businesses through tax reliefs or relief funds, will enable them to continue operating. However, ensuring that the SMEs and MSMEs remain operational by offering long term support already mentioned, means they can ultimately drive economic growth beyond the pandemic.
Female participation – Aida Diarra
It is a common understanding that female participation is key to economic growth given the contribution of women to small businesses especially in Africa. Women make up to 26 percent of small entrepreneurs in Africa, which is one of the highest ratios if not the highest across the world.
Our survey found that what women are facing as they build their business is not fundamentally different from their male counterparts. However, the reality is that the challenges that women face are certainly compounded, sometimes to 10 times or more.
One is access to finance. There is need for all stakeholders to ensure that we make capital accessible to women. Additionally, access to tools to enable them to grow the business, and the need to have networking opportunities where they can access learning and innovation are lacking. There are so many different programs that are available and we all as part of the ecosystem should partner and scale to have the impact we need.
We know that when women earn money, most of the revenue goes to the community. So, there is this multiplier effect that is just extraordinary, and that is a compelling factor for each one of us to want to support them. When you look at the global data, if we do a better job at supporting women entrepreneurs, we are talking about something like 300 billion more that we are bringing to GDP across the continent by 2025. These are just some key pointers regarding the benefit of supporting women entrepreneurs. It is a common understanding that facilitating women participation in business should be a key priority for governments and the private sector across the continent.
Also Read: Why women are central to the Africa we want
“The more we listen, the better we will be” – Robyn de Villiers, BCW Africa
Going forward, there is great opportunity in the corporate reputation level. Organisations must focus on building and protecting their corporate brands through effective risk analysis, issues and crisis management, and everything that focuses on building a strong reputation for an organization. Moreover, there is a growing consumer base in Africa, and companies that focus on these areas will grow their businesses by winning the hearts and minds of the consumers.
When it comes to stakeholder needs, businesses need to realize that stakeholder expectations have changed and they are expecting to be more involved than they were prior to COVID-19.
As the situation continues to evolve, collaboration and communication has never been more important than it is now. What is coming to light is that companies need to work with their peers and competitors to respond to the pandemic as a unit rather than separate business entities. As it is now, no one business will be able to respond to the pandemic and its ripple effects on the business environment alone.
Additionally, organisations need to learn to listen better than they had done in the past. Stakeholders need to know and feel that businesses are listening carefully and understanding what consumer behaviour and desires are, and working to meet them where they are and where they want to be, rather than where businesses want them to be.
The digital world will thus allow businesses to listen to what is going on. Technology allows businesses to be more conscious of what is happening in the world. Companies must be deliberate to learn how to work and operate virtually, to connect and respond to consumer needs while ensuring that the business keeps running.
Localisation: how to reach the heart and minds of consumers – Robyn de Villiers
It is critically important for businesses to find out what locals need and how they want it. Locals are very important when it comes to getting the marketing campaign right. It is about understanding the local culture, beliefs, connectivity and insights. By so doing, you reach the hearts and minds of the consumers.
As Africans, we all need to have greater faith that we create good things, and we don’t have to wait for some exciting products to come from outside the continent. We actually create great things and we can easily use e–commerce and digital tools to sell our products anywhere in the world and to each other. With the rise of initiatives such as #buyAfricabuildAfrica, the continent could become more sustainable through its products. We have the opportunity to do it right now and things are looking quite exciting.
