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Success in Africa – Five questions for Jonathan Berman

A must-read for anyone interested in Africa (obviously, given the title)
Here below are a few questions and responses from Jonathan Berman, author of “Success in Africa“.

It’s an excellent read. Below gives you a few insights into what it covers. 

1) Is there a central argument or point to your book? If so, what is it?   

Africa is forging a growth economy that is both sustained and widespread. It’s doing so not so much because of natural resources, or aid, or the Chinese. (though these are all topics mentioned in the book) Rather it is doing so because of internal drivers like better education, communication and governance. Africa is succeeding because Africans, and especially the African companies, are making it succeed.

2) Why is Africa so misunderstood as an investment opportunity and what can African countries do to correct this?  

As we come into 2014, there are probably as many people over-estimating the opportunity as under-estimating it. For about a decade, great businesses in Africa fought an uphill battle to get global corporations and investors to see the emerging growth story. In some corners, and especially in the US, that’s still the case. In other areas of the world, like China and the UK, many are aware of Africa’s rapid growth. Here, the real risk is that companies and investors will anticipate that returns will come quickly or without a substantial alteration of their business model. Both views are misguided.

The fix to both misperceptions is the same. If you want to know what succeeds in Africa, talk to people succeeding there. 

I find it remarkable how few successful African CEOs are on the global business stage. These are daring, capable business leaders pursuing opportunities on a scale unseen since the likes of Rockefeller and Carnegie. Speaking with them (or reading their views in Success in Africa and elsewhere), you can learn a lot about what it takes to win in Africa, and around the world.

3) In researching the book, which companies and CEOs impressed you the most, and why?  

In the book as in my work, I sought out business leaders who were running productive, innovative enterprises capable of competing on a global scale (even if some are start-ups today). I avoided rent-seekers or companies that grow solely by virtue of ties to government. 

I was also drawn to companies that are delivering social wealth in one form or another – not because they are a charity, but because that is the path to commercial success in Africa over the long term.

4) If we asked you to pick three countries in Africa where you thought there were significant business opportunities for investors, which would you pick, and why?   

The specific countries today will be different than tomorrow, but the fundamentals will be the same.   Sound macoeconomic policy of course, but beyond that countries that are pursuing a sound education policy and supporting those minds with strong infrastructure planning. 

Finally, size matters. There are a lot of small countries getting their internal policies right, but if regional integration is not achieved, most corporations and investors will bypass them.  

5) You met and interviewed dozens of CEOs of African companies. Were there any particular characteristics of good CEOs in Africa, any trends that stood out? 

Success in Africa describes five traits common among the business leaders succeeding in frontier markets around the world, including Africa. I’ll focus on just the first of there, an appetite for uncertainty. 

Most business leaders can manage risk, because it has known probabilities. It’s an actuarial calculation. Uncertainty is different, in that you cannot foresee the conditions in which you’ll be operating.  

That takes a special kind of business leader, usually an entrepreneur or a someone who has an entrepreneur’s spirit, even if she is leading a company centuries old. Neville Isdell at Coke and Jeff Immelt at GE both have that spirit (and both cut their teeth in frontier markets before becoming CEO). 

James Mwangi at Kenya’s Equity Bank and Funke Opeke at Nigeria’s MainOne do as well. All these men and women have more than a tolerance for uncertainty; they have an appetite for it. That’s one of the traits that marks winners across Africa.

Jonathan Berman is a senior fellow at Columbia University’s Vale Center and senior advisor to Dalberg, a strategic advisory firm focused on frontier markets with ten offices worldwide.  He previously served as partner and director of Dalberg’s corporate practice. Follow him at: @jonathan_berman or take a look here.