Unleashing Africa’s Economic Opportunities

The World Economic Forum says that Africa has the potential to boost global growth, but in order for that to happen, it needs to get its ducks in a row with regards to, investing more in infrastructure, encouraging and supporting entrepreneurship, and investing in more higher learning institutions.

In a recent webinar, Dr. Oby Ezekwesili, Board member at Nexford University and Founder and President, Human Capital Africa (HCA), Omid Kassiri, Managing Partner for East Africa at McKinsey, Laila Macharia, Director at Aspen Institute’s Africa Initiative, and Fadl Al Tarzi, Nexford University’s CEO got together to discuss in an enlightening webinar how Africa’s shift to services will impact the skills people need to learn. Improved productivity and AI: whether that will create vs eliminate more jobs? How to unlock intra-continental trade and the opportunities that will create. And finally, unlocking $3 trillion of consumer spending that Africa actually needs.

The webinar kicked off with Omid Kassiri talking about reimagining economic growth in Africa and how to turn diversity into opportunity. He spoke candidly about how the decade before this last one, Africa had a pretty decent GDP growth of 5%. You would imagine that over this decade the upward growth would have continued, however the converse was true as Africa’s GDP shrunk to 3%.

Interestingly, what has remained consistent is the growth in employment, but what has not been consistent is the growth in productivity. Way too many dichotomies for many people’s likings. However, what needs to keep in mind is Africa is not one country and so it should be borne in mind that the continent is only as strong as its weakest link.

Africa is shifting towards service economies

For a great many decades in the past, African economies were mainly subsistence, with the greatest quota coming from agriculture. Now we are seeing a fundamental shift away from agriculture and towards services and its value add to the economy.

Omid commented on this trend by saying, “Many young people don't necessarily want to be in agriculture, they want to be in the services industry. However, from a productivity perspective, across almost every sector, we are seeing productivity on the African continent being much lower than any other parts of the world. But this will improve or surpass everywhere else as the working age of the population continues to see improvements. But from a trend perspective, while everywhere else starts to come down, Africa's working age population continues to grow.”

He went on to say that in most parts of the world, in most continents, we're seeing about 30% of produce coming from within the continent. In Africa, it's often less than 10%. So, it’s highly imperative to significantly increase intra-Africa trade and concentrate on locally manufactured goods. Across the continent, we have about 350-billion-dollar companies. But these are not well spread across the continent, South Africa accounts for the bulk of it, followed closely by Egypt, Nigeria, Morocco, which together account for about 60% to 70% of these billion-dollar companies.

“So why do we care about large companies,” Omid said. “It’s because they are, first of all an indicator of the ability of an economy to sustain growth of companies, but also these larger companies can spend the dollars on research and development and build skills and talent for their economies and ecosystem as a whole. So, building talent on the continent is key and education is core to an improvement in that area.”

Economic growth is all about scaling up!

In order for Africa to scale as an economic powerhouse, we need to move away from too many countries being fragmented and make sure that countries and their economies come together for the greater good, otherwise everyone will have to put in triple the effort that they need to put in when operating at scale into trying to do things across each of the countries.

And so, one of the best things that's come out of the continent in recent times is the ACFTA, the Africa Continental Free Trade Agreement, and the area that has emerged out of the ratification of that agreement by majority of the countries on the continent.

These are some of the thoughts on the economic future of Africa by Dr. Oby Ezekwesili. She believes that because everything that’s being discussed on the webinar about investment in Africa, everything discussed about increasing the talent pool, and being able to produce these things at scale, presents an opportunity. And that's what Africa needs to be doing right now. Cultivating current and future talent is key.

Dr. Macharia agreed with Dr. Oby and went one step further by saying that it's true that Africa is a large continent but is still a very small proportion of world trade, so it has a lot of work to do to catch up. It’s all about productivity and that can be linked to the levels of skills that employees can bring to the party. So as a businessperson, you really want to have a total addressable market that is substantial, so that it gives your business room to grow. Many companies at an early stage start to do this.

Coming back to education being key in improving the productivity and GDP of African countries, Fadl Al Tarzi made mention that less than 9% of Africans have a college degree compared to say, 30 or 35% in the US. But there are solutions, such as Nexford University that can help leapfrog this development and significantly increase access across the content without compromising on quality.

Education is key to economic success

Dr. Macharia expanded on this point of education being key to economic prosperity in Africa by saying that a big part of it, of course, is creating education that individuals want to invest in.

She says, “If you're able to see that investing in a degree or in training of any kind, will lead to a better job or better economic outcomes for yourself, you're more likely to see it as an investment and go into it. But we need to ask as educators if we are we designing curricula together with employers? Are we preparing students across the gamut of not just domain skills? Am I a good marketer? Am I a good businessperson, but also those career readiness skills and soft skills then make you an amazingly effective career person? I think doing those different things well will start to raise not just the enrollment, but the value of the education that we offer.

She went on to say that the last part of allowing education to make a difference in people’s lives and as a net result, in a company’s make up, is access to quality education, and she firmly believes that Nexford University has a big part to play in this. Because its online education, people are not having to travel a prolonged period, so it's affordable, and they're able to make that investment in a controlled way so that they can then see their career start to moving forward. Especially in the field of remote jobs.

Staying local, but going global

Fadl put to the panel the question of whether African’s need to get educated if there aren’t local opportunities asking what they thought about the viability of either starting businesses in the absence of local opportunities or thinking about remote jobs in particular. Basically, he asked, are remote jobs potentially a real solution to the employment challenges on the continent?

In response Dr. Oby maintained that access to remote jobs will be part of the solution, but not necessarily all of it. However, it will play a huge part of it, because technology is one of Africa's three game changers because it is offering the African child global level opportunities thanks to online universities. Thanks to that they're not sitting in the classroom that is built by brick and mortar, but rather being able to learn wherever they are in their African country.

“But there needs to be a mindset shift,” she says. “I still see a lot of children who think that going to an online university is inferior to going into a traditional university. In answer to that I say that traditional universities are having difficulty adapting to the new way of working or learning. Online learning institutions have the disruptive technologies required to put education into their hands in a very affordable way.

Fadl agreed with that saying that online education can level the playing field in many ways regardless of physical location. You’re now able to educate yourself, if you're in Nigeria and South Africa and Indonesia, and access the same quality of education as someone else sitting in Los Angeles and therefore be able to access remote opportunities as they continue to grow. But there is a need for digital transformation and the need for people to acquire essential digital skills. And if the education system is not responding to that, we are going to fall far behind.

Lots of jobs but not enough skills development

Today there are 1000s of vacancies online today with foreign employers in the US or the UK, however, these companies are struggling to fill them. Therefore, they are looking outside their countries and looking to India or in the Philippines for such talent.

But why are they not looking to Africa? It’s because Africa still has issues with the level of skills required to fill international posts. Especially if, for example, it’s very specialized skills that are wanted such as a game designer or an animator. And then because of the shortage, these people do get snapped up, so there's still a gap. So, it’s all about procuring in-demand skills. Both soft and hard skills.

But another shortfall is really around infrastructure, or the lack of it in Africa. Without relevant infrastructure such as high-speed internet, people can’t acquire skills online, and without skills, productivity drops or stagnates. If we don't improve the learning outcomes and improve skills procurement, we're just simply going to abandon too many children to fail in school systems that then will not help them, not the economy.

Online learning is part of the answer to Africa’s problems

In comparison with 5 years ago when African countries were only starting to find their feet when it comes to online education, we are seeing many more countries in Africa, including Nigeria, start accepting more online universities. A 2015 survey by Coursera, a prominent MOOCs platform, found that because of taking online higher education courses, an overwhelming 87% of African participants reported career benefits, with 33% mentioning tangible career benefits. So, what needs to happen is more African countries and their governments rubber stamping more online universities. But first we need to get over the question that is still being asked and that is are online degrees as acceptable as those from traditional universities?

In Omid’s expert opinion, it’s no longer about employers questioning the validity of online learning, but rather questioning what online learners can do as an employee.

“It's all about the skills you have,” says Omid. “So, for young people I'd say, yes, being thoughtful around online offline accreditation is particularly important. What is even more important is the five years after that, so focus on what kind of skills and experiences you’re learning, and if you are working. Entrepreneurship can be a door opener to employment as African entrepreneurs are growing, and phenomenally successful ones at that.”

AI is going to be a game changer

At the firm level, AI is already making a noticeably significant difference. It's raising productivity in the marketing department in the finance department, there's much less data entry. There's many solutions that are already raising productivity. Hence the fact that more learners are doing AI courses online. So, the education opportunities around that are also another area for economic growth in Africa. In fact, a study by TRT Afrika intimates that the study said whereas 83 million job positions would be declared obsolete due to AI, some 69 million new job opportunities will arise. People will have to adapt, or risk being thrown onto the obsolete scrap heap. So, adaptability is a vital skill to have.

So young Africans should embrace the world of AI. Because even though it will remove some jobs, in order to create the basis for the kind of productivity that it brings, it will also provide new opportunities. Look at it as a tool that can empower you to a midpoint, definitely many jobs will disappear, many more will be created, but the trend is moving towards higher valued jobs.

Should I stay or should I go?

Although there are a number of Africans leaving the continent due to lack of opportunities and therefore contributing to the GDP of other countries in Europe and also states in America, what is helping keep the economies of Africa going is that people are now able to work for global companies and not have to leave their country of birth.

Regarding this exciting trend, Dr. Macharia was quick to point out that the African Digital Media Institute realized in a survey that a third of the students in the class are already serving an overseas employer of some kind. So, university learners should think about working for overseas companies without leaving the country. Furthermore, she said, because African companies are growing so rapidly, you can now be an immigrant, but to another African country.

Fadl closed by saying, “There have never been as many opportunities for young Africans now as compared to 10 years ago, but collaboration and education is the key to opening doors.”

Watch the full webinar video below or on YouTube.