Africa: Land of opportunity

Africa is on the up, with abundant opportunities across its 55 countries for dynamic investors, diaspora and expats.

Africa is on the up, with abundant opportunities across its 55 countries for dynamic investors, diaspora and expats.Whether it was South Africa officially being welcomed into the BRICS group of newly emerged economies in 2012, or country after country, year on year, rising through the ranks of the annual World Bank series of Doing Business surveys, there’s no doubt that, in recent years – and particularly since the 2006 global economic crisis – perceptions of Africa outside its huge and diverse continent have been undergoing radical change.Along with surveys like global professional services firm EY’s annual Africa Attractiveness Index, Re:locate has been following Africa’s rise, and the mobility opportunities associated with it, for a number of years. While this period has been one of significant economic upheaval and volatility globally, we’ve witnessed consistently positive trends for Africa for both growth and business sentiment.The extent of positivity around inward investment to Africa, with its relatively young, fast-urbanising and increasingly educated almost-900 million population, saw the 500 global business leaders who responded to EY’s Africa Attractiveness Survey 2014: Executing Growth report rank it the second most attractive investment destination after the USA.What is more, 73 per cent of investors already there are confident of Africa’s attractiveness as an investment destination, compared with 39 per cent who have yet to invest. This suggests that, for companies on the ground, the reality is matching the ‘Africa rising’ rhetoric.Where are the hotspots?Data from EY’s Africa Attractiveness Survey 2014 continues to show a twin-track growth story. North Africa has experienced further declines in the number of committed foreign investment projects this year, owing to a combination of continued political uncertainty and a general shift in investment focus from extractive to consumer markets.The Sub-Saharan region continues to drive growth on the continent, posting average annual GDP increases of around 4.7 per cent, according to World Bank data. The bank expects growth of 5.3 per cent this year and 5.5 per cent in 2016, supported by strong demand (domestically and internationally) and investment.Although yet to usurp the most attractive – and established – South African business destinations of Johannesburg and Cape Town (first and second respectively), Sub-Saharan Africa is home to the third- and fourth-ranked centres, Nairobi (Kenya) and Lagos (Nigeria). These rising stars emblemise the shift of the growth axis in Africa from north and south to east and west (see Africa: a rising tide, in the Summer 2013 issue of Re:locate magazine), indicating the spread of growth and opportunities throughout the wider continent.Technology, retail and finance key sectorsA further indicator of the continent’s dynamic and changing economies is how the traditional foreign investment focus on the extractive industries and agriculture is today being pulled into the technology, media and telecoms (TMT), retail and consumer products (RCP) and financial services sectors, aided by widespread mobile network saturation.These three sectors, ranked first, second and third respectively, now account for more than half of foreign direct investment (FDI) projects among respondents to the EY survey.This year’s EY dataset is not only notable for the number of retail and consumer product FDI projects overtaking those in the financial services sectors, but also for the relatively few mining and metals FDI projects. This sector has long been associated with investment in the continent, but exited the top ten for the first time in the survey’s history, giving some insight into the shifts currently taking place.Recognising the extent of retail growth opportunities in Sub-Saharan Africa, international management consultancy A T Kearney this year launched the Africa Retail Development Index. This ranks the countries with the most compelling opportunities for development by time pressure, market saturation, country risk and market size.On this basket of measures, the top five most attractive retail opportunities are in Rwanda, Nigeria, Namibia, Tanzania and Gabon. Here, large fast-moving consumer goods companies like Coca-Cola, Unilever, Nestlé and Diageo, are already present in the markets, tailoring products to domestic consumers.Talent challengesFrom the perspective of global mobility and talent management, these economic shifts into new sectors present opportunities, as well as challenges. While generally the continent of Africa has the strength of numbers among its young population to fill the vacancies, the shift to new sectors and the rate of change, as well as historic underinvestment in human capital, mean that skills mismatches exist.These provide opportunities for both returning diaspora and expatriate workers, as well as for concerted and sustained employer recruitment and training programmes for high-potential graduates.The insightful and high-level panel discussion at April’s BOC Emerging Markets HR Conference in London – chaired by Dr Sujaya Banerjee, with Ola Ehinmoro, vice president of group talent management at Lafarge SA, Chidinma Lawanson, head of human capital management at Nigeria’s Diamond Bank, Frances Mensah Williams, CEO of Interims for Development, Kate Dikgale-Freeman, vice chairperson of the South Africa Board for People Practices, and Sarah Fitzgerald, MD of Executives in Africa – discussed the challenges and approaches their companies employed to ensure that opportunities for growth were being maximised.At Diamond Bank, Chidinma Lawanson revealed, part of the talent development strategy is a prestigious and intensive graduate training and onboarding programme.This introduces new recruits to the bank’s values, customer focus and interpersonal skills standards.Ola Ehinmoro, of Lafarge SA, also spoke of the challenges, financial and cultural, for returning diaspora, and of rotating high-potential leaders from newly emerging countries into development roles in emerged European destinations. Without careful management, including discussions around reasons for assignments, such programmes could meet with resistance, given homecountry opportunities and salary discrepancies.Noting how these talent management initiatives were paying dividends, Sarah Fitzgerald commented on how, in recent years, African nationals had been more likely to make it on to recruiters’ shortlists for senior and board level roles than previously.Relocation’s roleAs the shift to retail, fast-moving consumer goods and technology continues, it’s likely that assignees from these emerging sectors will join those from established sectors, like the diplomatic corps, technicians and professionals in NGOs and energy and extractive industries.Findings from the 2014 Brookfield Global Relocation Trends survey suggest that, for those among its current client base, assignee volume to the region remains relatively small – for the moment, at least. “Although there is a great deal of talk about Africa in general as an emerging continent, only South Africa shows a marked change, up from 15th position in 2013 to a joint fourth position in this year’s report,” the authors note.Kenya (19) features alongside South Africa and Angola (14) as one of three African countries in the top 20 emerging countries for international assignments.Crown Relocations is one of a number of relocation specialist and destination service providers which have relatively recently entered markets on the Africancontinent to service mobile workers’ and their employers’ needs. Explaining why, Crown’s David Hollins said, “More businesses than ever are expanding into Africa, as they recognise its huge potential. An ever-growing population makes Africa a sizeable and very appealing market for retailers of many goods and services. Crown has seen such high demand in African nations that it expanded into the continent in 2009.”With the diversity of assignment types and durations proliferating, getting the right support is even more vital. Brookfield’s Global Relocation Trends survey reveals that, for its 159 respondents, between them representing eight million employees, five of the world’s top 20 most challenging destinations are in Africa (South Africa, Egypt, Nigeria, Angola and Mozambique).Cartus’s 2013 study Talent Management and the Changing Assignee Profile also shows that employers are grappling with low interest and high levels of resistance to African destinations, particularly Nigeria. Here, concerns around schooling, security and housing, as well as career, are prevalent.“Of course, there are challenges associated with a move to Africa,” says David Hollins. “Security, in particular, remains a big concern. In some areas, democracy is still in its infancy, and outbreaks of civil unrest are likely to continue over the coming years.“Government corruption is common, and areas such as Nigeria often experience violent outbursts of protest. Likewise, basic infrastructure problems can hamper development, including poor road and rail networks, which can limit public travel.”Mr Hollins adds, “Many of these challenges can be overcome with basic precautions and care, however. Africa remains a continent that figures strongly in the marketing plans of businesses across the world. A move there can be incredibly rewarding for the employees of these businesses, provided proper preparation precedes any relocation.”With the wider trend to push to localise on longer-term contracts, and talent and career advancement taking higher priority for assignments, having a clear employer brand, as well as assignees with an adaptable global mindset and purpose for being there, will be vital in ensuring that opportunities for all are realised in this dynamic and diverse continent.

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