Most international businesses are still not very aware of Africa’s investment opportunities. Information costs are high: Africa is fragmented into many different countries, and even in aggregate the continent is a fairly small economy. For several decades, investor ignorance did not matter: with few exceptions Africa’s economies were too badly run for there to be many opportunities for firms of integrity. But there has been a sea change—Africa is on the move. There will be ups and downs, but investors from the countries of the Organisation for Economic Co-operation and Development (OECD) who remain set in their ways may be missing a giant business opportunity if they fail to pay attention to the changes afoot.

The situation in Africa quietly began to change during the period 1995–2005. Profound macroeconomic reforms tamed inflation and opened economies to international trade. More patchily, the regulatory environment facing international business also improved. Public ratings, such as the World Bank’s Doing Business surveys, enabled African governments to benchmark their performance and began to put pressure on those that were recalcitrant. As the global commodity boom built to its 2008 crescendo, many African countries were well positioned to harness the spike in their export revenues for growth beyond the resource extraction sector itself.

That upturn in national growth rates was mirrored in the increased profitability of companies operating in Africa. Indeed, three distinct sources of data indicate that returns on investment are higher there than in other regions. One was a comprehensive study of the publicly traded companies operating in Africa for the period 2002–07, mostly in the manufacturing and services sectors. It found that these companies’ average return on capital was around two-thirds higher than that of comparable companies in China, India, Indonesia, and Vietnam. Another source, on the foreign direct investment of US companies, showed that they were getting a higher return on their African investments than on those in other regions. Finally, analysis of a series of surveys of several thousand manufacturing firms around the developing world found that, at the margin, capital investment had a higher return in Africa.¹

This was the scene in the years leading up to the global crisis. Although its origins had nothing to do with the continent, the crisis did not bypass Africa. Its effect was to collapse commodity prices—for example, the price of oil initially tumbled by more than $100 a barrel. More subtly, the international appetite for risk collapsed, and since Africa is still generally viewed as the riskiest region, investors got scared; for example, international banks curtailed letters of credit to African exporters far more drastically than to those in other regions.

These effects were severe. However, with a few exceptions—inevitable in a region with so many countries—Africa weathered the economic storms well. Led by its two largest economies, South Africa and Nigeria, most countries had built prudent fiscal positions: in a remarkable break with its past, Nigeria had freed itself from debt and built up over $70 billion of foreign-exchange reserves. Further, the adverse impact of the crisis through commodity prices lasted less than a year for Africa. Globally, commodity prices rapidly bounced back and seem to have stabilized around levels markedly higher than those in the decades before the boom, underwritten by growing Asian economies and their corresponding need for commodities.

Revenues from commodity exports have been augmented not just by high prices but also by the resource discoveries that high prices have triggered. Yet the recent discoveries are merely the beginning: the scale of what is likely to happen is not widely appreciated. As I show in The Plundered Planet, Africa is the last major region on Earth that remains largely unexplored. In the long-explored countries of the OECD, the average square kilometer of territory still has beneath it around $114,000 of known subsoil assets, despite two centuries of intense extraction. In contrast, the average square kilometer of sub-Saharan Africa has a mere $23,000 of known sub-soil assets. It is highly unlikely that this massive difference is due to a corresponding difference in what is actually there. Rather, the difference in known assets is likely to indicate an offsetting difference in what is awaiting discovery.

It is reasonable to suppose that what is actually under the soil in the average square kilometer of Africa is at least as valuable as what is known still to be available in the OECD. An implication is that once these untapped resources have been discovered, Africa’s commodity exports will be around five times their present level. In turn, this has three profound implications. One is that many of the countries in which resources are discovered will be those that currently are not significant resource exporters: the economic map of Africa will change quite drastically as new opportunities open. A second is that such a radically higher level of commodity exports across the region will support correspondingly larger economies. The final implication is that in the process of getting to this much higher level, Africa will have a prolonged phase of rapid growth.

Now for the reality check. During the commodity booms of the 1970s, Africa also had a wave of resource discoveries. With a few exceptions, most notably Botswana, these opportunities were not harnessed for transformative growth. Indeed, the more common experience was an ugly and costly political contest for control of the revenues. If history repeats itself, the forthcoming much larger wave of resource discoveries in Africa will leave a legacy of scarred landscapes and scarred lives.

Yet the contrast between Nigeria’s dysfunctional management of its first oil boom of 1973–83 and its brilliant management of the second boom of 2003–08 cautions against the gloomy cynicism that until recently bedeviled investor thinking about Africa. The road to economic transformation is undoubtedly likely to be a bumpy one, but many African societies have learned both from their own histories and from the prosperity of other once-poor countries. Unlike the externally dictated structural-adjustment programs of the 1980s, the key struggles over economic policy will be internal to African societies. They will not all be won, but nor will they all be lost: some societies will decisively adopt progrowth economic strategies.

To date, Africa has lacked the spectacular regional role models of economic success that so benefited Asia. But it is now starting to get them. Even in Rwanda, a landlocked, crowded country lacking in natural resources, a leadership committed to economic transformation has been able to sustain a growth rate of 10 percent. In some of the countries with more favorable fundamentals, even faster growth rates will be sustained. Such successes will have a profound influence on the neighbors, just as occurred in Asia.

As in Asia, I doubt that there will be a close correspondence between the struggles for democracy and the struggles for economic transformation. The struggles for democracy do indeed have an important economic dimension: many African rulers have accumulated excessive personal power and abused it to sacrifice the common good of national prosperity for narrow sectional self-interest. But more recently, some African leaders, such as President Museveni of Uganda, President Kagame of Rwanda, and Prime Minister Meles of Ethiopia, have built strong credentials for a commitment to the economic transformation of their societies while being somewhat hesitant democrats. Some of Africa’s coming economic successes will be in societies that have won the struggle for accountable democratic government. But others will be in societies in which autocratic leaders have become ambitious for national goals rather than merely for power and privilege; expect some African repetitions of Malaysia’s experience.

The financial crisis, which?threw the spotlight on MBA?programmes and graduates,?combined with the management needs of a new breed of industries, mean that business schools are now trying to recruit a different type of student to their MBA programmes. This is particularly true at top US business schools Harvard, Wharton and Stanford. Where these schools lead, others follow.

Diversity is the watchword, and the number of women, entrepreneurs, military personnel, environmentalists and not-for-profit managers being accepted is evidence of the type of students who will join this year’s incoming class, the class of 2013.

PARIS — BNP Paribas, the largest French lender, announced a sharp decline in third-quarter profit Thursday and said it was writing off 60 percent of the value of all the Greek debt it holds, a belated acknowledgment that the loans are largely unrecoverable.

The bank, based in Paris, said it was setting aside about €2.1 billion, or $2.9 billion, of the value of its Greek sovereign debt. It is writing down about €116 million of exposure to Greek corporate bonds.

The bank said it had also moved to address its exposure to embattled euro zone government debt in the latest quarter, selling €1.9 billion of Greek sovereign debt, €8.2 billion of Italian debt and €2.5 billion of Spanish debt.

He said during a conference call that the bank’s exposure to Greece was now small enough that a default would be manageable.

BNP Paribas said its third-quarter profit fell 72 percent from a year earlier, to €541 million. If results were adjusted to exclude the Greek write-down, the bank would have had a net profit of almost €2 billion, up more than 2 percent. Revenue, at €10.0 billion, was down 7.6 percent from a year earlier.

‘‘Over all, they’ve done a good job of demonstrating that there is enough earnings power there to take a big hit,’’ Jon Peace, a banking analyst with Nomura International in London, said.

Under a July 21 aid package between Greece and the European Union, banks had been prepared to write down the value of their Greek sovereign loans by 21 percent. But that deal, always seen in the market as insufficiently reflective of reality, was never implemented.

Many large banks went on to write down half or more of their exposure, and when a new Greek aid deal was announced on Oct. 27, its call for a 50 percent ‘‘haircut’’ on the loans merely codified what a number of banks had already put into practice.

Some French banks, including BNP Paribas and Société Générale, had come under criticism for not moving more aggressively to mark down their loans, and their stock prices suffered heavily.

Shares of BNP Paribas closed up 7.5 percent Thursday in Paris, while Société Générale’s shares were 5.8 percent higher.

Analysts said Société Générale, which is to report its own results Tuesday, would probably also announce a larger write-off on its Greek debt, but noted that the bank’s absolute exposure to the country was considerably smaller than BNP’s.

Christophe Nijdam, a banking analyst at Alphavalue in Paris, said BNP was marking down its Greek debt ‘‘because they wanted to be on the safe side. We don’t know what’s going to happen with Greece.’’

‘‘And I guess they don’t want to be criticized anymore,’’ he added.

Mr. Nijdam said European banks had ended up with the worst of all possible worlds with the Greek bailout deal of Oct. 27, because though they were under renewed pressure to write down their sovereign debt exposure, political leaders had so far not followed through with promised reinforcements to the European Financial Stability Facility, the supposed ‘‘bazooka’’ for safeguarding the euro zone.

The bank said its Tier 1 capital ratio, a measure of financial strength, rose to 11.9 percent from 11.4 percent a year earlier. Banks in the euro zone are being required to raise their ratio to 9 percent to protect against exposure to the debt of countries at risk.

Compliance with new capital rules will nonetheless come at a cost. BNP said compliance would cause gross operating income to decline by €750 million and generate an additional €1.2 billion in costs and losses.

French banks, which have pledged to shrink their balance sheets by 10 percent, have until Dec. 15 to announce their recapitalization plans. Like its peers, BNP is cutting businesses requiring dollar-based financing. It said it had cut such financing by $20 billion in the third quarter and would cut an additional $20 billion in the fourth quarter, leaving it with a remaining target of $20 billion for 2012.

‘‘The plan to reduce funding needs in dollars and the Group’s placement capacities helped it minimize the impact of the crisis that occurred in the monetary and financial markets this summer,’’ Mr. Prot said in the statement.

He told BFM radio that the bank would be announcing job cuts around Nov. 15, with reductions focused largely on the corporate and investment bank and on a global level. He did not otherwise detail the bank’s plans. Mr. Nijdam predicted the job cuts in the unit would be ‘‘in the hundreds, rather than in the thousands.’’

That business suffered in the latest quarter, BNP said, hurt by ‘‘plummeting equity markets, stepped up concerns over the sovereign debt crisis in a number of European countries, limited liquidity and extremely high volatility.’’ The unit’s revenue fell to €1.7 billion, down almost 40 percent from a year earlier.

source deal book

Reuters) – Europe’s banks expect to be told to raise more capital under a Franco-German effort to solve the euro zone debt crisis after the state rescue of Franco-Belgian lender Dexia SA.

Dexia agreed to the nationalization of its Belgian retail bank and secured 90 billion euros ($121 billion) in state guarantees, in a rescue that raises pressure on other euro zone countries to strengthen their banks.

German Chancellor Angela Merkel and French President Nicolas Sarkozy said on Sunday they would tackle Greece’s woes and agree how to recapitalize the regions’ banks by the end of the month, but they declined to reveal details of their plan.

“We expect the EU to come up with a minimum core Tier One (capital) level under certain stress scenarios and a higher one without any stress. Then banks will be asked to reach this level in a short period of time,” said a senior banker in Germany.

Banks were not involved in talks yet with governments on likely capital needs, several bankers said, although options were being considered in case they need to act quickly.

But they were concerned at just how much more capital they will be called on to find, after many urged Europe’s leaders to follow the “bazooka” approach of former U.S. Treasury Secretary Hank Paulson, who told banks they must raise capital.

British Prime Minister David Cameron told his euro zone peers to adopt a “big bazooka” solution.

“with the IMF’s 200 billion euros,” said Alastair Ryan, analyst at UBS. This could involve euro zone governments owning 40 percent of the sector if such a sum was to come from the state, he estimated.If capital is to have any chance of stabilizing the banks, it will need to be large: we would start

Under Dexia’s rescue plan, Belgium is to pay 4 billion euros to buy Dexia Bank Belgium, which has 6,000 staff and deposits totaling 80 billion euros from 4 million customers, and secured guarantees from France, Belgium and Luxembourg to underpin a 95 billion-euro loan portfolio that the bank is to now run down.

As part of the bank’s break-up, Dexia is also in talks to sell its Luxembourg arm to members of Qatar’s royal family. The Qatari investors also bought Belgian bank KBC’s private bank on Monday.

Dexia shares resumed trading and after briefly crashing as much as 36 percent, pared losses to close down 4.7 percent at 0.81 euros, valuing the bank at 1.6 billion euros.

SIGNIFICANT LOSSES

Dexia has a global credit risk exposure of $700 billion –more than twice Greece’s GDP — and its rescue has stoked investors’ concerns about where other troublespots may lie.

The lender faced significant losses on its Greek government debt holdings, but, more significantly, was shut out of wholesale funding markets, which it was highly reliant on to finance its long-term loans to municipal borrowers.

European banks have faced a significant deterioration in access to wholesale funding markets, which is likely to continue to drag on bank earnings, said Huw van Steenis, analyst at Morgan Stanley.

The European Central Bank last week stepped up its liquidity support, but may need to provide two to three-year funding support to help with the 1.7 trillion of bank funding due to be rolled over from 2012 to 2014, van Steenis said.

There remain disagreements on how euro zone countries will fund any rescue effort, however. Paris wants to tap the euro zone’s 440 billion euro European Financial Stability Facility rescue fund for any recapitalization of the banks, while Berlin is insisting the fund should be used as a last resort.

This is in contrast to China, where a unit of the state’s wealth fund on Monday started to buy more shares in big banks as a sign of support for the sector

PAINFULLY DILUTIVE

Europe’s banks are wary of making further cash calls on their shareholders, as low share prices would make it painfully dilutive for existing investors, and private sector investors appear reluctant to ride to the rescue while the sovereign debt crisis persists.

Capital could be raised through the issuance of preference shares or other hybrid structures, possibly similar to those used by French banks in 2008, which may not need to be used but would act as a buffer to reassure investors.

France’s banks are seen as among those most in need of capital and weekend reports said BNP Paribas SA and Societe Generale might agree to capital injections as part of a wider plan.

French banks denied they needed capital, however, saying market fears were a result of the health of a few countries rather than the banks. “Certain states must regain the trust of investors … a potential strengthening of European banks’ capital would not be a response to this issue,” the French Banking Federation said.

Unicredit SpA and other lenders in Italy, Spain, Portugal and Germany are also seen at risk of needing capital.

But Deutsche Bank AG is fighting against any blanket recapitalization, saying it has decent capital levels and sound profitability. “We will try to convince the government that not every bank needs fresh capital,” a senior source at the bank said.

But another banker said there was a growing feeling many banks may be included: “The well-managed German banks and French ones should just say yes, let’s all do it together.”

The STOXX Europe 600 banking sector index closed up 2.3 percent, but has tumbled by a quarter since the end of June as euro zone leaders failed to get to grips with the sovereign debt crisis.

The burden of bailing out Dexia led Moody’s to warn Belgium that its government bond ratings may fall, but the ratings agency said it should have no impact on France’s AAA rating. Standard & Poor’s confirmed the ratings of Belgium and France.

Brussels: The European Union yesterday proposed a financial-transactions tax that would take effect in 2014 and raise about $78 billion (Dh286.45 billion) a year. The plan would set minimum tax rates for financial transactions throughout the 27-nation EU, the European Commission, the bloc’s Brussels-based executive, said in a statement.

Yesterday’s proposal would apply a tax of 0.1 per cent on trading of stocks and bonds, with a 0.01 per cent rate for derivatives contracts. European governments are split over the merits of a transactions tax, with the British Treasury saying that such a levy would need to apply globally and “there are a number of practical issues that need to be worked through”.

EU tax proposals require unanimous support of the bloc’s 27 members. The tax is aimed at banks, investment firms, insurance companies, pension funds, stockbrokers and hedge funds, among other types of financial firms, the EU said.

Spot foreign-exchange trades would not be covered by the tax, while currency derivative contracts are included. “The tax would aim at covering 85 per cent of the transactions that take place between financial institutions,” according to the statement. The EU is seeking to insulate households and small businesses from the levy, and says banks could charge “not excessive” fees such as a €10 (Dh49.7) fee on a €10,000 stock purchase. The tax would “ensure that the financial sector makes a fair contribution at a time of fiscal consolidation,” the commission said in the statement.

EU member states will discuss the proposal before the commission presents the plan to the Group of 20 nations at a November summit. An impact assessment accompanying the proposal says that the plan would have a ‘long-run’ negative impact of 0.5 per cent of gross domestic product.

The tax would affect market behaviour and financial-industry business models, such as high-frequency and automated trading, the EU said.

“It is time for the financial sector to make a contribution back to society,” European Commission President Jose Barroso told the European Parliament in announcing the proposal in Strasbourg, France.

Stephen Machin, managing director at Alvarez and Marsal Taxand UK, called the proposal ‘a populist measure’ and said it “will put EU financial centres at a disadvantage” to competitors.

“If this tax is introduced” in Britain, “then significant volumes of transaction activity will move” to other regions. British business secretary Vince Cable earlier yesterday said taxation is a “national competence issue” and EU proposals for a levy on financial transactions cannot be forced on Britain.

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 The Bank’s sharpened focus in listening to civil society organizations (CSOs) is proving to be a timely response to a generation of CSOs that are well informed and ready to discuss concrete solutions to their development needs.

This was evident in a recent frank discussion between CSOs from 18 African countries and World Bank Vice President for the Africa Region Obiageli Ezekwesili via video conference in April. The CSOs pointed to a number of salient issues on which they seek the Bank’s direct intervention and support:

• More constructive dialogue and open data in their respective countries
  
• Resources to support CSOs and non-state actors
  
• Youth unemployment, job creation and integration of youth needs into government policies
  
• Agriculture, especially small and family-owned farms
  
• Effective monitoring of resources in the face of corruption and waste

In addition to these issues, the CSOs raised concerns about fragile and conflict affected states, seeking to know how the Bank supports these countries and how invested the Bank is in conflict resolution and peace building. The CSOs also raised concerns about safe drinking water and sanitation in rural and urban areas. Noting that resources were limited, the CSOs asked the Bank to integrate such needs into respective project budgets.

Intra-Africa trade was another major concern, which the CSOs said was stymied by external forces, such as the aggressive marketing practices of some foreign companies. They also expressed concern about the lack of vibrant in-country trade in many African countries.

Ezekwesili, who was true to her pledge to listen to the CSOs, assured them that “based on its central theme and policy of open access, the Bank is an open forum today, and this will deepen our partnership with you in your countries.”

Informing the CSOs that the new Africa strategy, Africa’s Future and the World Bank’s Support to it, which was shaped by input from CSOs, earned the endorsement of the Bank’s Board of Executive Directors, Ezekwesili said she was very proud to let the board know that CSOs in Africa helped in the preparation of the strategy.

Before the dialogue CSOs shared their experiences in a three-hour workshop with two initiatives “Contract Watch” and “External Implementation Status and Results Reports Plus (E-ISR Plus).” These initiatives, led by the World Bank Africa Region in collaboration with WBI have been working intensively with civil society.

“Contract Watch uses monitoring of Bank contracts as an entry point for building broad coalitions and constituencies for reform around the demand side of good governance, while testing the efficacy of the supply side,” said Sahr Kpundeh, Africa Region’s CSO and Governance and Anticorruption in Projects focal point. He also said that parts of the Implementation and Status Results Reports (ISRs), the main reporting tool for progress and results in active Bank projects, were made public. CSOs were encouraged to provide feedback on the progress of projects and whether the Bank’s perception of a project’s performance matches what the consumer community perceived.

When discussing “Contract Watch,” Ezekwesili told the CSOs that the Bank built a contract monitoring approach by harnessing and concretizing what CSOs were already doing.
“It is not just watching the Bank’s work, but also public expenditure in your countries,” she said.

Emphasizing that Africa’s time is now, Ezekwesili said there were opportunities in infrastructure, agriculture, and Information and Communication Technology (ICT).
“Our role is to facilitate the process of translating these opportunities to growth,” she explained.

Evidently well-informed, participants raised a broad range of questions, with great specificity, and in some instances suggested solutions. These included one suggestion that the Bank focus more on impact of programs, especially in construction and infrastructure. They also asked that the Bank help make some countries’ Public Private Partnership Act implementable, as well as give some guarantees on making respective African governments work with CSOs.

During the discussion, Ezekwesili assured CSOs that Africa’s youth are very important to the Bank’s work.

She also urged CSOs to be part of the coalition for reforms in each of their countries.

“When you don’t take steps in ensuring economic reforms and reforms don’t happen, the poorest suffer most,” she said, adding that “transparency is mandatory.”

The vice president concluded by reiterating that the Bank is changing with the times, and in the last year has pushed the envelope in its engagement with CSOs. She also reassured them that the Bank does listen to them and added, “The Africa Strategy was written by you—so yes, we will continue to listen to you.”

Africa’s greatest challenge is to ensure the benefits of growth are spread more equally so the revolutions in the north of the continent do not spread, says Donald Kaberuka, president of the African Development Bank.

North African economieswill drag down overall growth across the continent to 3.7 per cent this year, from 4.2 per cent in 2010, according to forecasts from the bank. But sub-Saharan Africa will grow 5.6 per cent in 2011, rising to 6.2 per cent next year, with more than 10 countries growing faster than 7 per cent.

“Our challenge in Africa is one of inequalities. Growth seems to benefit a few people .?.?. North Africa’s economies were growing, but they were not inclusive enough and therefore not sustainable,” Mr Kaberuka told the Financial Times after the bank’s annual meeting.

African governments had balanced their books, he said. Now they needed to ensure higher levels of investment in education and agriculture, and provide the climate for small and medium-sized enterprises to thrive. Vietnam, Cape Verde and, to an extent, Ghana provided models, he said.

“The big dangers to the African recovery now are the international economy, number two, the food pricesand number three, socio-political revolts. The economy provides the raw material and the politics the trigger,” Mr Kaberuka said

The event was the Chief Executives’ Officers’ Dialogue which is a regular feature of the AfDB’s Annual Meetings each year. This year’s subject was African Entrepreneurs: Promoting Shared Growth and Prosperity?

The participants were Robert Gumede, Executive Chairman of South Africa’s information technology giant Gijima Group; Aziz Mebarek, Executive Director of Tuninvest-Africinvest Group in Tunisia; Jubril Adewale Tinubu, chief executive officer of perhaps Africa’s best-known oil company, Oando of Nigeria; Catherine Samba-Panza, Administrator-Director of insurance group Societe Gras Savoye in the Central African Republic, and Euvin Naidoo, Director of Credit Portfolio Management-PBB Africa, part of the Standard Bank of South Africa.

The debate was chaired by AfDB’s president, Donald Kaberuka, and moderated by well-know African TV personality, Lerato Mbele, from CNBC Africa.

All entrepreneurs around the world face obstacles in achieving their business plans, but specific challenges face creative business people in Africa.

One obstacle can be excessive regulation, which can lead to delays and extra costs to businesses. Even registering a company and obtaining various licences before setting up shop can take months, or sometimes years.

Other challenges include governance issues, the lack of a sound legal and regulatory framework. Business can also find it hard to get finance. Neither the banking sector nor capital markets in many countries is large and sophisticated enough to finance major projects or export activity.

Then there is the political stability issue; investors – particularly foreigners – worry whether their capital is safe, despite Africa’s improved record overall. Recent and unexpected high-profile events in places such as North Africa and Côte d’Ivoire can make business people jittery.

But on the plus side Africa is a huge market and opportunity. It has almost 150 million monied consumers and a further 400 million people with some limited spending power. They represent untapped demand for consumer products.

And the panellists are living proof that Africans can succeed despite the obstacles and can even become a billionaire starting with nothing.

On entrepreneurs, the panel agreed Africa need them for sustained economic growth. Mr Tinubu said: “Entrepreneurs manage risk, create jobs and innovate”. Mr Gumede added that they invested in human development and created sustainable jobs. Mr Kaberuka said they were “wealth creators and innovators”.

While entrepreneurs everywhere complain about getting finance to back their ideas, African innovators probably have a harder time getting funds. Mr Gumede agreed, saying financial institutions were very pessimistic, especially in South Africa. To get started, he said, he had to use his own resources. “I was never supported by any financial institution” he said.

Mr Tinubu echoed Mr Gumede’s comment – he had to rely on private contributions at the beginning, as did Mrs Samba-Panza.

And even when banks do give you a loan, the price of failure is high in Africa, said Mr Tinubu. “Donald Trump has said he has gone bankrupt five times. Banks in Africa never allow you to fail. If you do, you will never get a loan again”.

It is not just banks that create obstacles. Over-regulation in Africa can kill a business at birth, although in some countries, things are improving. Mrs Samba-Panza said: “It took me many months to get permission to open a company”. Now, she said, the system had relaxed and it was easier to get started. Since the changes, she said, “In the past two years, twice the number of women have started businesses”.

But whatever the banking system or country, entrepreneurs will always have to persevere, said Mr Naidoo: “There is no silver bullet, in terms of getting capital”.

However, governments can play an encouraging role on the regulatory front, he continued. Entrepreneurs need the rule of law, property rights and labour law.

Mr Gumede remained sceptical of government when it came to business. He is based in South Africa and Ms Mbele had earlier described the country as “heavily regulated”. Mr Gumede commented: “Our government doesn’t seem to have faith in business”.

Mr Tinibu agreed: “Government is a big problem in Africa, a big obstacle”.

Another stumbling block to success in Africa is poor infrastructure. Ms Mbele commented that bad infrastructure can add 40 percent to the costs of businesses. Mr Tinibu said a basic test was whether it was as easy to cross a border as it was in Europe. “Governments on both sides should fix the roads at the border rather than the one leading to the president’s house”, he said.

Infrastructure problems included energy shortages. Mr Mebarek said: “In Nigeria, you cannot rent a flat unless you have your own generator. The lights go out at five o’clock”. Mrs Samba-Panza agreed: “Infrastructure is an impediment for African entrepreneurs”.

Despite the various obstacles, the panel agreed it was worth fighting the battle, because Africa is a big consumer market.

Mr Kaberuka said in Africa, there were “120 million people roughly classified as middle class”.

On whether there was a worthwhile market in Africa, Mr Tinibu said: “There is no doubt about it”. There was a shortage of all sorts of products to meet the demand. “There is nothing in Africa that is in excess supply”.

Mr Mebarek said the key to tapping into the market is to bring down the price of lots of everyday goods by manufacturing locally rather than importing. His company had successfully done so.

However, Mr Gumede said labour could be a problem in parts of Africa, despite high unemployment, and to succeed in local manufacturing, there had to be a “harmonious environment”.