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25% Chinese Companies in Africa Make Their Initial Investment Within A Year

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A new report has shown that China is Africa’s largest economic partner, with 10,000 of Chinese firms operating in Africa – four times the previous estimate.

The new report by McKinsey Africa finds that its involvement is bigger and more multifaceted than previous studies suggest.

Through a study conducted across eight countries that together make up about two thirds of sub-Saharan Africa’s GDP, the report finds that about 90% of these are private firms, of all sizes and operating in diverse sectors, with about a third in manufacturing.

These firms are bringing capital investment, management know-how and entrepreneurial energy to the continent, and in so doing, are helping to accelerate the progress of Africa’s economies.

Across trade, investment, infrastructure, financing and aid, China is a top-five partner to Africa – no other country matches this level of engagement. The China-Africa relationship has ramped up over the past decade with trade growing at around 20% per annum.

FDI has grown even faster – at an annual growth rate of 40%. China’s financial flows to Africa are 15% larger than official figures suggest when nontraditional flows are included. China is also a large and fast-growing source of aid and the largest source of infrastructure financing, supporting many of Africa’s most ambitious infrastructure developments in recent years.

Chinese Firms Are Market-Driven and Investing For The Long-Term
Operating across many sectors of the African economy, in addition to manufacturing, a quarter is in services and a fifth in trade and in construction and real estate.

Chinese firms already handle 12% of Africa’s industrial production – valued at US$500bn a year in total.

In infrastructure, Chinese firms’ dominance is even more pronounced, having cornered nearly 50% market share of Africa’s international engineering, procurement and construction (EPC) market.

Chinese firms are making healthy profits. Nearly a quarter of the 1,000 firms surveyed said they covered their initial investment within a year or less. A third recorded profit margins of over 20%.

These firms are agile and quick to respond to new opportunities. They are primarily focused on serving the needs of Africa’s fast-growing markets rather than on exports. Chinese firms have made investments that represent a long-term commitment to Africa. Of the Chinese firms surveyed, 74% said that they are optimistic about their future in Africa.

Clear Benefits, But Challenges Must Be Addressed
The report points to three main economic benefits to Africa from Chinese investment and business activity:

Job Creation and Skills Development:
Of the 1,000 firms surveyed, 89% of the employees are local. The research suggests that Chinese firms employ several million Africans. Nearly two thirds of Chinese firms provide skills training to their workers.

Transfer of Knowledge and New Technology:
Chinese firms are modernising African markets by introducing new products and technologies. Some 48% introduced a new product or service and 36% have introduced a new technology in the last three years.

Financing and Development of Infrastructure:
When asked what they value most from their Chinese partners, for some 50 African public-sector leaders, low-cost financing and improved infrastructure topped the list. They cited Chinese firms’ efficient cost-structures and speedy delivery as major value-adds.

While on balance, China’s burgeoning partnership with Africa is a positive for Africa’s economies, governments and workers, there are areas that need significant improvement:

Local Sourcing:
By value, only 47% of Chinese firms’ sourcing was from local African firms, which is lost opportunity for these firms to benefit from Chinese investment.

Local Managers:
Too few locals are in managerial positions – only 44% today.

Pain Points for Both Sides:

Chinese firms cite personal safety and corruption in some countries as their top concerns. For African leaders, language and cultural barriers are pain points. There have been instances of labour and environmental violations by Chinese firms.

Maximising the impact of the partnership
Kartik Jayaram, a senior partner and co-author of the report said, “Chinese engagement with Africa is set to accelerate – by 2025 Chinese firms could be earning revenues worth $440bn, from $180bn today.

Additional industries could be in play for Chinese investment, including technology, housing, agriculture, financial services and transport and logistics. However, to unlock the full potential of the China-Africa partnership, we have identified 10 recommendations for Chinese and African governments as well as the private sector. To highlight two key ones – African governments should have a China strategy and the Chinese government should open financing and provide guidance to Chinese firms.”

Few African countries have a clear strategy and engagement plan for China. Governments should develop such strategies, linked to national plans and priorities. They should also cultivate capabilities in their bureaucracies to support these strategies.

Opening Chinese government financing and providing guidance on responsible business practices to Chinese private sector firms in Africa would accelerate sustainable investment.

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ATCON, Instinct Wave Launch 5th TERF, Industry Awards

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The Association of Telecom Companies of Nigeria (ATCON) and InstinctWave have launched this year’s edition of Telecoms Executives and Regulator Forum (TERF) and the maiden edition of Nigeria Tech Innovation & Telecom Awards (NTITA).

The forum, scheduled to hold on the 10th of November at the Lagos Oriental Hotel is the biggest and the most important forums for regulators and policy makers in Nigeria ICT sector. The Awards, NTITA holds at the same venue on the 11th of November.

In its fifth year, TERF has not failed to attract high-level participants from regulatory authorities and technology stakeholders; TERF is an excellent platform for discussion on common policy and regulatory issues in the telecom and technology sector.

The forum will provide stakeholders with the understanding and knowledge of current policies, regulatory best practices, information on emerging issues and chart the way forward in proving an enabling and sustainable environment for the growth of the most important sector in Africa.

In the same vein, Nigeria Tech Innovation & Telecom Awards promises to be a memorable one and the gala night will excite the industry in a fashionable manner.

The reputable awards under the umbrella of ATCON and powered by InstinctWave, Africa leading B2B event organizer promises to showcase vibrancy in the sector.

Winners will be announced to an audience of Nigeria’s most influential ICT and business decision-makers at a sumptuous evening of fine dining and entertainment.

Mr Olusola Teniola, president of ATCON said the forum will discuss and share best practise on moving the industry forward while the awards, has been designed to re-define how excellence in the ever growing ICT services in Nigeria is recognised.

“If we keep honouring innovation and excellence we will be surprised that there will be an unprecedented growth not only in this sector, but generally.

According to Mr Akin Naphtal, CEO, InstinctWave, the Forum and Awards will bring together industry experts that have contributed excellently to the growth of ICT sector.

“If you are an award winner, there is no better place to gain an endorsement of your success and highlight your company’s achievements, he added.

The night will also provide an exceptional opportunity for stakeholders to network, entertain clients, and reinforce relationships with partners and reward staff with exceptional performances.

NTITA has an independent panel of industry experts as judges, will recognize organizational performances, products and services, innovations, executives and management teams, women in ICT, and successful deployed CSR Initiatives.

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ACT Foundation Partners Cancer Aware to Screen Over 300 Women

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By Peter Oluka
In line with our vision to mitigate against the spread of cancer in Nigeria, Nigerian’s grant-making non-profit organization, Aspire Coronation Trust (ACT) Foundation has partnered with one of its grantees, Cancer Aware to sensitize residents of Mushin Local Government Area of Lagos on breast cancer.

The sensitization exercise which held recently enabled over 300 residents of the community to be educated on the symptoms of breast cancer as well as the opportunity to be screened by medical officers.

Commenting on the exercise, Ndifreke Okwuegbunam, head, Programs, ACT Foundation, highlighted on the importance of breast cancer screening for women. She said “Breast cancer is one of the most common cancers that affect women all over the world. We are aware of the invaluable role women play not only in our homes but in our society at large. And so today we have come to support our grantee, Cancer Aware to bring information about this deadly disease to the women of Mushin Community”.

Mrs. Okwuegbunam also noted that asides the health sector, ACT Foundation is also passionate about entrepreneurship, environment and leadership, as these key sectors will help provide a holistic approach in creating a better world for all.

Speaking at the event, Hon. Emmanuel Bamigboye, the executive chairman, Mushin Local Government Area (LGA), expressed his appreciation to ACT Foundation and Cancer Aware for supporting the government in safeguarding the health of people in Mushin LGA. He called on all women to avail themselves of the opportunity to get screened and protect themselves.

Also speaking about the initiative, Tolu Falowo, executive director, Cancer Aware, expressed her gratitude to ACT Foundation for supporting this laudable project of sensitizing as well as screening residents of Mushin community on breast cancer. She also thanked the Mushin Local Government for the support they provided in making the day a reality.

She said “Cancer Aware is committed to fighting against the spread of breast cancer in Nigeria, this we do through sensitization and screenings because we understand the importance of early detection. We cannot do this alone and so we are calling on the government as well as corporations and well-meaning Nigerians to join us to eradicate the prevalence of breast cancer in Nigerian women.

The sensitization exercise which gathered over 300 women entailed checking of vital signs education on breast cancer, symptoms, care and screening by trained personnel. Attendants also used the opportunity to asked trained medical personnel questions about this menace that is eating deeply into our society.

Cancer Aware is one of the 22 Non-Profit Organisations that benefitted from the 2017 ACT Foundation grant.

Aspire Coronation Trust Foundation is a grant making non-profit established to support local, national and regional non-profits working to address challenges and associated vulnerabilities in the African continent.

(L-r): Olumide Emeralds, monitoring and evaluation officer; Alexandra Bazuaye, communication officer, both from ACT Foundation, and Project Team Lead, Cancer Aware at the breast cancer sensitization exercise in Mushin recently.

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John Momoh To Deliver Keynote at 2nd Fate Alumni Conference

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By Peter Oluka
Fate Foundation; the premier not-for-profit organization promoting business and entrepreneurial development in Nigeria, said it has perfected all arrangement for the second Annual Alumni Conference holding in Lagos next week.

The Annual Alumni Conference (AAC) is a platform for Fate Alumni and other Micro, Small and Medium Enterprise entrepreneurs to learn from entrepreneurial leaders and influencers sharing knowledge about key topical areas to grow and thrive as entrepreneurs while also giving them an opportunity to network and connect with one another.

John Momoh, the founder and executive chairman, Channels Television Networks, is confirmed to deliver the Keynote address on the theme: Unlocking the Growth potential of MSMEs through Partnerships and Innovation, to build on the success of the inaugural edition and foster a sense of community and tradition.

The Syndicate Sessions will feature distinguished speakers such as the Founder and Chief Executive Officer, House of Tara, Tara Durotoye, Partner, Risk Consulting Practice, KPMG, Tomi Adepoju, Founder, Chicken Republic, DejiAkinyanju, Chief Executive Officer, Mall for Africa, Tope Folayan, Co-Founder & Director, AACE Foods, NdidiNwuneli, and Principal Consultant, ADSRAT Branding Management Consortium, Charles O’Tudor. Others eminent speakers include Founder and Chief Responsible Officer, Ruff ‘n’ Tumble, Adenike Ogunlesi,Chief Executive Officer, Food Chain Limited, FoluAfricanfarmerMogaji, and Chief Executive Officer, Brandzone Consulting LLC, ChizorMalize and Lead Consultant, Thistle Praxis, Ini Abimbola.

Speaking on the Alumni Conference, Executive Director, Fate Foundation, Adenike Adeyemi, said, “Following the success of the maiden edition of the conference last year, we secured a larger space this edition so even more entrepreneurs can benefit from our line-up of experienced entrepreneurial leaders and industry experts who will be speaking at the conference.

“This year’s syndicate sessions will focus on Access to Markets; Brand Management; Agribusiness and Sustainability. New to the conference this year is the Consulting Bar; an extension of the monthly Fate Consulting Clinic, where our alumni business men and women can have one-on-one access to expert advisory support for a period of 30 minutes each”.

She added that, “Given the success of our free monthly Consulting Clinic sessions, we have invited specific institutions that provide and/or are relevant to MSMEs advisory in the following need areas: Legal; Tax; Finance; Human Resources (HR); Digital Marketing Strategy; Communications; Sustainability; Financial Software and Credit Rating”.

Fate Foundation was instituted in 2000 by Founder & Pioneer Managing Director, Guaranty Trust Bank, Fola Adeola,with a mission to foster wealth creation by promoting business and entrepreneurial development among Nigerians.

Since its inception, Fate Foundation has graduated over 5,200 entrepreneurs from its Aspiring, Emerging and Special Entrepreneurs’ Programmes and trained over 40,000 Nigerians in its short entrepreneurship Certificate courses.

Fate Foundation has also enabled over 72,000 Nigerian youths on the path to entrepreneurship. About 65% of its Alumni are actively running their businesses and most are beneficiaries of Fate’s Business and Alumni Support Services.

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