Africa on the Rise

The African continent has recently undergone an incredible transformation, and nowhere more so than on the cover of The Economist magazine. In May 2000, Africa was “hopeless.” In the space of a decade-and-a-half, it was “rising.” The plotline of the world’s largest continent has been flipped on its head.

To make sense of the shift in outlook, we turn to two Africa experts at the Lauder Institute – Executive Director Mauro Guillén and Director of the Lauder Summer Program in Africa Keren Weitzberg. Their takes add nuance to the narrative of Africa’s ascent and shed light on what the Institute has in store for the next generation of business leaders in and from Africa.

From Hopeless to Golden

Many experts agree: Sub-Saharan Africa used to be a very difficult part of the world. Guillén dates the trouble to the 1970s, to a combination of a tumultuous post-colonial period, political turmoil, and civil wars that persisted through the end of the Cold War. To the list of deleterious factors affecting Africa, Weitzberg adds broader changes in the world economy, a drop in commodities prices in the mid-70s, and structural adjustment programs implemented in the 80s and 90s that had destructive effects on African economies.

Weitzberg questions the Economist’s broad-brush characterization of the entire continent as “hopeless.” In fact, a sense of hope had already begun to bubble up in the 1990s – heralding a period from the mid-1990s to the global financial crisis in 2007 or 2008 that Guillén calls “the golden years” for Sub-Saharan Africa. An improved political climate and the end of civil wars created the conditions needed to attract more investment from firms in Europe, America and Asia – especially China and India. “Africa started to grow very quickly, right to the point where half of the faster growing economies in the world are in Sub-Saharan Africa,” he says.

The draws for investors are two-fold: natural resources and a burgeoning consumer market. “We’re seeing the beginnings of a middle class emerge in Africa,” says Guillén, “meaning that there are increasing numbers of families who have enough purchasing power to buy branded goods and automobiles and to go on vacation. They want financial services, mortgages, and so on and so forth. We see the beginnings of a very dynamic process that eventually could make Sub-Saharan African economies very large markets. We’re in the initial stages of that.”

Turnaround Versus Turning Back

Weitzberg agrees that “we’ve seen a big turnaround,” but her training as a historian leads her to question the narrative of an unprecedented economic upswing. While she recognizes that there has been “gradual improvement in African economics,” she cites “reasons to be skeptical of the growth.” For one, she questions if it is indeed new.

“The kind of improvement we’re seeing now in economic growth might be a return to the norm,” she says, pointing out that African economies were growing in the 60s and 70s. “This is more of a question mark, but it might be that the 70s and 80s and 90s were an anomalous period when many factors led to the decline in African economies.” The answer to that question should carry weight for business people looking to capitalize on Africa’s economic growth. If that growth is bound to continue – barring the turmoil of the postcolonial period – investors may proceed with greater confidence. Her other concern is not for those doing business in Africa, but for those who live there. “I do worry that problems with inequity aren’t being resolved in many cases, as is the case here in the US. While we’re seeing growth, it’s not necessarily growth that’s been equally shared.” Nor is it growth that is necessarily sustainable.

Too Big to Ignore

Young entrepreneurs in search of the next big thing – the next big market, the next technological advance – are looking to Africa as fertile ground. Countries such as Nigeria, Uganda, Ethiopia, Kenya and Tanzania are growing at a rapid pace. “Over the last fifty years the population has grown,” Guillén explains. “Now Africa has the third largest population in the world in terms of size. Africa is bigger than South Asia. Within 10 years, Africa will be bigger in terms of population than East Asia – bigger than China, South Korea, Japan, and Taiwan combined. Thirty years from now Africa will be the most populated part of the world. It will become bigger than South Asia. You can no longer ignore Africa.”

An academic who has dedicated her studies to Africa, Weitzberg feels Africa has never been worth ignoring. “One of my concerns about some of these narratives about ‘Africa rising’ and even more specifically the language of ‘Africa as the new frontier’ is it kind of ignores that Africa has always been a part of the world economy,” she says. “The assumption that up until recently Africa has just been marginal to the world economy and to world history, and it’s only now that we need to be paying attention to it, I think is extremely dubious. That would be my generous way of putting it.”

Even in her skepticism of the narrative of sudden transformation, Weitzberg appreciates that there are positive aspects to the fact that “business people in the west are now taking Africa more seriously and recognizing the vitality of African economies.” The fact that historians like Weitzberg have been paying attention to the continent all along makes the work of doing business on the continent more likely and more meaningful for her students at the Lauder Institute – making their business relationships more than transactional, ensuring that interactions are, in Guillén’s words, “a two-way street.”

A New Frontier in Global Business Education

Guillén has no doubt about the plusses of focusing on Africa; in that vein, he has led the charge for a big investment in a new Program of Concentration on Africa at the Lauder Institute – the first graduate program of its kind at an American business school.

The reasons are plain. “Africa is the next frontier in the global economy,” Guillén says. “You can no longer just turn your back on it. Business schools historically have paid little to no attention to Africa. We’re offering classes. We’re offering weeklong immersions. We’re offering a summer immersion. We’re offering a program. We want to be ahead of the curve and educate people now, prepare people for doing business in Africa now, for when the economy really takes off.”