Building inclusive economies

    Can Africa bridge the development divide?

    As Africa rises, lift all boats

    Judith Rodin, President of The Rockefeller Foundation

    For most of the last century, The Rockefeller Foundation has been working with partners in Africa on health, education, agriculture, and economic development.

    We have seen multiple challenges and crises, both man-made and natural. But we have also seen incredible resilience in communities, innovation and ingenuity in African youth, and entrepreneurial spirit in business leaders. And so, coming off of the first ever Africa Forum on Inclusive Economies, hosted by The Rockefeller Foundation, the African Development Bank, and the United Nations Economic Commission for Africa, we were pleased to see that the rhetoric about Africa’s future is finally matching what we are seeing on the ground.

    "This rapid success also gives rise to a range of new questions – in particular, how do we ensure this growth is shared broadly, rather than benefiting a select few? We know from watching it happen in other places that this is not a guarantee."

    Judith Rodin

    The conversation is no longer about how far Africa has yet to go, but rather how we can close the gaps that remain. Africa is now home to half of the world’s 20 fastest growing economies. The information communication technology sector is growing exponentially, and more businesses are investing in Africa and its people.

    But this rapid success also gives rise to a range of new questions – in particular, how do we ensure this growth is shared broadly, rather than benefiting a select few? We know from watching it happen in other places that this is not a guarantee. We need purposeful policies and deliberate plans to ensure that African countries are creating inclusive economies – one that ensures everyone, especially those with the greatest barriers to improving their well-being, has access to economic opportunities, chief among them: a job.

    Broad-based employment is a critical component to building this kind of economy. The Rockefeller Foundation’s Digital Jobs Africa (DJA) initiative aims to catalyse new, sustainable employment opportunities and skills training for African youth, with a focus on job creation and retention in the rapidly growing information communication technology (ICT) sector. Our goal is to positively impact one million lives in six African countries, and ultimately generate life-changing new social and economic opportunities for entire families, communities and nations.

    DJA contributes to advancing more inclusive economies in the countries where we work in two ways. One, it helps to build favourable business environments that will lead to the creation of new digital jobs in diverse sectors, including business process outsourcing, online work, and other sectors like retail and hospitality. Second, to ensure job creation is not for the sake of growth alone, we work to engage the private sector to intentionally hire high-potential but disadvantaged youth.

    We are focused especially on accelerating growth of “impact sourcing”, which employs people who lack opportunities for sustainable employment, often in low income areas. In return, businesses can expect a range of benefits. For example, this approach has already led to success for industry leaders such as Deloitte, in the form of lower costs, a sustainable recruiting model, and lowered attrition, all without sacrificing quality.

    But the biggest success stories are the youth themselves. Vanessa Kanyi, for example, is an exceptional young woman whose job with our grantee, Samasource, helped her pay tuition and eventually graduate from Nairobi University. She later went on to help run an entire call centre in Uganda.

    Each piece – securing livelihoods for low income individuals and households, generating economic growth – is a building block to creating a more inclusive economy that benefits everyone. We were heartened that President Uhuru Kenyatta mentioned DJA at the Inclusive Economies forum in Kenya as one of the crucial keys to growth and increased inclusion in Kenya and elsewhere on the continent.

    Still, we know that DJA, and efforts like it, can only be meaningful as part of a larger, concerted effort to make inclusive economies a top priority at this critical juncture in Africa’s development. The private sector, especially, must continue to lead the way. For example, our partner Microsoft is already using their procurement process to influence their suppliers to do impact sourcing as well.

    We remain committed to that kind of collaboration, ensuring that the Africa Forum is only the beginning of this conversation – and that, as Africa continues to navigate the challenges and opportunities of the 21st century, more of its political, civic and business leaders take care to ensure that the rising tide of economic growth truly lifts all boats.

    Seizing missed opportunities for industrialisation

    Dr Carlos Lopes, Executive secretary of the UN Economic Commission for Africa

    Africa is experiencing a period of high economic growth, yet structural transformation is lagging behind.

    Low productivity in the agricultural sector has constrained industrial production and competitiveness in many countries due to an inadequate or irregular supply of raw materials. This, in turn, has constrained the growth of manufacturing based on agro-products or processing. A vast natural resource sector with poor links to manufacturing highlights missed opportunities for commodity-based industrialisation.

    "An active industrial policy is a key component of such a developmental framework. Relying on market forces to manage industrialisation is misguided."

    Dr Carlos Lopes

    In 2013, average growth was 4 percent, triggered by high global commodity prices and sustained by surging African domestic demand and improved economic governance. However, the share of manufacturing in GDP has remained very low and, more worrying still, stable across the continent, moving from 9.5 percent of GDP in 2001 to 9.6 percent in 2012. It is astonishing that during a period of growth, Africa’s share of global value-added manufacturing has remained flat for over a decade, amounting to just 1.5 percent in 2013. No surprise then that stagnant industrialisation and sluggish manufacturing growth did not translate into decent jobs for the continent’s young, growing labour force and educated middle class.

    There are many missed opportunities here. Not only does Africa lack adequate infrastructure, it has limited industrial capacity and capabilities, inadequate entrepreneurship and institutional support, as well as chronic energy supply deficits. Energy infrastructure is particularly critical for industrialisation, and to satisfy the growing demand fuelled by urbanisation. New forms of partnership are required to match African domestic investment of $50bn in electricity, water, roads and information communications technology infrastructure. Closing the infrastructure deficit is vital. Improving infrastructure would, inevitably, increase intra-regional, and international trade, reduce the cost of doing business and enhance Africa’s competitiveness regionally and globally.

    The priorities for the continent’s industrialisation are clear. Africa should use its own natural resource endowment as a basis for industrial transformation. It should develop an adequate infrastructure system, including energy and transportation. It should also increase research and development, adopting green technology and promoting the private sector. These transformative policies need to be complemented by an education system aligned with Africa’s ambitions. Skills development in research and development and technological innovation are as important as raw materials, when matched with policies enhancing domestic investment. Alternative sources of financing and greater reliance on domestic resource mobilisation make a strong case for African regional industrial integration to reap benefits of greater economies of scale.

    A conducive and more coherent policy environment is one of the foundations of structural transformation. African inclusive and sustainable growth calls for strong policy coordination. By moving up within and across sectors, African countries can raise real incomes, generate decent jobs and the fiscal space required to boost funding for social development programs. East Asian experiences have shown that smart protectionism is a tangible value proposition with long-term benefits. Transformation does not automatically lead to inclusiveness in the absence of a clear role for developmental states.

    An active industrial policy is a key component of such a developmental framework. Relying on market forces to manage industrialisation is misguided. Correcting persistent market failures – such as lack of investment in socially beneficial activities, difficulties in coordinating parallel investments in linked industries, and inadequate provision of enabling public goods, is absolutely essential. There is a need to foster learning for all economic agents throughout society. The state must bear the ultimate responsibility in this crucial process.

    African industrial policy is being intensely revisited. The overwhelming belief in the supremacy of market forces is fading away. The role of industrial policy and institutional direction are increasingly being recognised by policymakers and industrial stakeholders. The state has re-emerged as a facilitator for dynamic sources of growth through appropriate policy instruments and interventions to correct market failures and complement market successes.

    Windfalls from high commodity prices and commodity-led growth have hitherto failed to lift millions of Africans out of poverty. Africa needs to use an industrial mix composed of smart protection, subsidised credit, and publicly supported research and development with technology and innovation policies to get manufacturing sectors off the ground. This is true for all the same reasons that it was true for other nations that have industrialised successfully. Africa’s economic future will be determined by how it designs and implements effective policies to promote its industrialisation.

    Closing the gap

    Adrienne Klasa, This Is Africa

    Participants attending this year’s annual gathering of the World Economic Forum, more commonly known as Davos after the Swiss ski resort in which it takes place, found themselves surrounded by voices of dissent.

    One of the main grievances was a perceived global trend towards greater disparity between the haves and have nots - a trend which Davos, with its exclusive membership amongst the global elite, is sometimes seen to exemplify.

    "It has been pointed out that 7 out of 10 of the fastest growing economies are in Africa, but if you flip that over 6 out of 10 of the most unequal countries are also in Africa."

    Gabriel Negatu

    According to these critics, “extreme economic inequality is out of control and getting worse” while “80 billionaires have the same amount of wealth as the bottom half of the planet”.
    Others argued that “if you increase the income share of the poorest, you get a multiplying effects that you do not get if you increase the income share of the richest”.

    This was not a chorus of protesters confined to the margins, however. The voices quoted above belong to Winnie Byanyima, the executive director of Oxfam and one of the Davos co-chairs, and Christine Largarde, the managing director of the International Monetary Fund (IMF).

    Far from being omitted from discussions taking place in Davos, global inequality was one of the core topics on the agenda. Incongruencies of setting aside, the fact that this conversation took place in the rarefied atmosphere of Davos shows that, after years on the margins, fears over the consequences of inequality have become a mainstream business and policy concern.

    Groups such as the Occupy Movement - an activist campaign that swept across cities from New York to Hong Kong beginning in 2011 in reaction to bank bailouts following the financial crisis - and figures such as French economist Thomas Piketty through his book Capital in the Twenty-First Century, have brought inequality issues to the fore of cultural debate. Both highlight mounting evidence that existing economic frameworks are failing to deliver a fair deal to the majority of people.

    In a major study on global living spanning almost 200 years published in October 2014, the Organisation for Economic Cooperation and Development (OECD) found that income inequality is at the same level today as it was in 1820.

    Writing on the World Economic Forum’s blog, Oxfam’s Ms Byanyima argues that rising inequality is one of “the defining challenges for 2015. This is the year when we will have to set a course for action for a sustainable and just world.”


    Against this backdrop, Africa is seeking to forge its economic fortunes in the 21st century. By all accounts, the continent has had a good decade. Once considered synonymous with chronic underdevelopment and economic failure, optimism about Africa’s economic prospects is on the rise.

    Now home to many of the world’s fastest growing economies, enviable demographics and a more stable political environment, governments and business from Beijing to Washington are eyeing Africa’s progress.

    The World Bank is predicting average growth in excess of 5 percent across Africa in 2015 – growth which has proven resilient in the face of the global downturn in the wake of the 2008 crisis. This strong showing has fuelled an investment boom, with foreign direct investment in 2013 hitting a record $57bn.

    A young population - more than 60 percent of sub-Saharan Africa’s population is under 25 – and a middle class estimated to equal that of India and China in size are strong draws for an increasingly diversified investor base. Sectors from retail to telecommunications and financial services are booming, with household names such as Walmart, IBM and General Electric all making major investments. Other sectors such as agriculture are coming on stream, with the World Bank estimating it to be a potential $1tn opportunity by 2030.

    At the same time, the continent’s resource potential is also on the rise, with major new discoveries of hydrocarbon and mineral deposits occurring in countries ranging from Tanzania and Mozambique in east Africa, to Sierra Leone, Guinea and Ghana in the west.

    Despite these positives, the continent also finds itself at the centre of the global inequality debate, a place where competing narratives of opportunity and risk collide at a time of rapid change.

    On the one hand there is the narrative of “Africa rising”, destined to take its rightful place amongst other emerging regions such as Asia and Latin America. On this account, it has the potential to rival the industrialised world in the course of this century.

    Challenging this optimistic view are concerns about a lack of meaningful structural transformation in many of Africa’s fast-growing economies, as well as mounting evidence that rapid GDP growth is doing little to drive social inclusion. Left unchecked, some argue, these deeply rooted issues could undermine and even reverse the economic gains made since the turn of the century, weaken democratic institutions, and risk political and social upheaval.


    Many economies on the continent are marked by a stark contrast between impressive GDP growth and stagnant socioeconomic development.

    “It has been pointed out that 7 out of 10 of the fastest growing economies are in Africa, but if you flip that over 6 out of 10 of the most unequal countries are also in Africa,” says Gabriel Negatu, a director at the African Development Bank.

    Nigeria, Africa’s largest economy and biggest oil producer, exemplifies this paradox.

    Despite averaging annual growth of 7 percent between 2004 and 2010, the country’s poverty rate has actually increased in recent years. It is estimated that as much as 60 percent of Nigeria’s 150 million population now lives in extreme poverty – at a time when the country’s elite is estimated to have spent $6.5bn on private jets.

    While the ratio of poor people relative to the continent’s growing population has fallen from 57 to 46.8 percent between 2002 and 2011, the absolute number of poor people living in sub-Saharan Africa has increased from 400.2 to 415.4 million over the same period. In mineral-rich Mozambique and Guinea, the poverty ratio has gone up substantially.

    Evidence of this divergence is widely visible. Oil rich Angola averaged 11.1 percent growth between 2001-2010, yet 43.4 percent of the population live on less than $1.25 per day. South Africa, regarded as the most developed and diversified economy in the region, saw an increase in youth unemployment from 48 percent to 52 percent between 2005 and 2010.

    While it represents a considerable market opportunity, Africa’s emerging middle class remains fragile. Research by the African Development Bank suggests that as much as 80 percent of those counted among the continent’s 310 million strong middle class are part of a ‘floating class’ living on less than $4 per day. They remain highly vulnerable to external shocks, such as an increase in food prices.

    “Inclusiveness is a real challenge because the fact is: the level of poverty is not declining. And whilst we are very proud of the growth pattern, with Africa taking in 5 or 6 percent, it is just not enough. It is not enough to even keep up with population growth,” says Frank Braeken, chief investment officer of Amatheon Agri Holding and the former head of Unilever’s African operations.


    A major obstacle to more inclusive growth is a lack of structural change in many economies. Growth in Africa has historically been closely linked to natural resource extraction, often at the expense of more productive sectors such as manufacturing and agriculture.

    “I think [this trend] is very distinctive to Africa, and it is because African growth is being underpinned by resource extraction. It is not the only thing that is going on, but it is the thing that is driving growth,” says Paul Collier, co-director of the Centre for the Study of African Economies at Oxford University.

    “Basically, it generates very few jobs directly. Harnessing resource-generated growth for broader development objectives - it can be done, but it is not automatic.”

    There is some diversity of opinion as to the degree to which extractives are driving growth across Africa. A study by the Mckinsey Global Institute suggests that resources contributed just 32 percent to growth between 2000-2008. Regardless, the need for more economic diversification is clear.

    “Over 5 percent growth on average for the last decade has not created enough decent jobs. We are confronted with a sort of slow structural transformation,” says Mario Pezzini, Director of the OECD Development Centre.

    Resource rich countries, which include key economies such as Nigeria and South Africa, face a particularly acute challenge. Here, he argues “you have further polarisation of society and growing inequality that are related to the specific quality of growth”. Twenty countries in sub-Saharan Africa fall into this category.

    “I think an obvious direction for work is the one that has been indicated by the African Union, and the United Nations Economic Commission for Africa. They are insisting strongly on what they call productive transformation, which means diversification of the economy, improving productivity in the economy. This calls into play what in many cases we call industrial policy,” Mr Pezzini asserts.

    Some point to Ethiopia, in east Africa, where there are signs that growth and development may actually be converging. The country’s economy has seen double digit growth rates for much of the last decade, and on the back of industrial policy aimed at boosting the manufacturing sector, is showing signs of diversification.

    “Ethiopia has done a series of actions that are very interesting, attracting foreign investments that are going into some sectors including clothing and other activities,” says Mr Pezzini.

    The government has established a number of special industrial zones aimed at kick-starting the manufacturing sector. The first of these, Bole Lemi in the capital Addis Ababa, is aimed at Asian markets and has attracted a number of companies. Another zone, the Ethio-China Light Manufacturing Special Economic Zone in Lebu, on the outskirts of the city, aims to eventually employ 100,000 workers. Some major Western brands, including the clothing firm H&M, have also established a presence in Ethiopia.

    “I would say it deserves to be looked at more closely, to understand how this has been done... it is an interesting way that could create a type of growth that is more inclusive.” says Mr Pezzini.

    “In a certain sense little has been done [in terms of industrialisation] in Africa up to now. There is a strong will and a strong convergence of view, but for the moment it is just the beginning of a trend.”

    This sentiment is echoed by Mamadou Biteye, managing director for Africa at The Rockefeller Foundation.

    “It is important to recognise that some governments are trying, and we do have incredible positive examples. I think the biggest problem is: how do you take these successful practises to the scale that will be transformative?”


    Other countries looking to Ethiopia as an example will do so with a sense of urgency. Current levels of inequality are already putting a strain on many economies on the continent. At worst, economic disenfranchisement can stoke social and political unrest.

    The Arab Spring, which began with the self-immolation of Mohamed Bouazizi in Tunisia in late 2010, has partly been linked to a lack of economic and political opportunity for citizens in the Maghreb. The subsequent revolutions in Tunisia, Libya and Egypt stoked fears of a ‘sub-Saharan African Spring’.

    “Violent conflicts are on a downward curve; but on the other hand, and this is not necessarily a bad sign, the protests are increasing. That is not only for Africa” but globally, says Mr Pezzini.

    The causes that bring people to the streets are closely linked to economic dissatisfaction. According to the OECD, demands for increased salaries accounted for 26 percent of public protests across the continent in 2013, while high unemployment and unpaid wages accounted for 11 percent.

    In some cases, this dissatisfaction can exacerbate more volatile situations. Nigeria, for example, has witnessed the rise of a violent Islamist insurgency known as Boko Haram in the country’s economically and politically marginalised northeast.

    Meanwhile, in east Africa, Al Qaeda-affiliated militant Islamist group Al Shabaab is actively recruiting and carrying out attacks in Kenya and Tanzania. Where as Somalia, where the group is based, has lacked an effective central government since 1991, both Kenya and Tanzania are considered relatively stable and have rapidly growing economies. However, this strong performance may be part of the problem.

    “Even though the Kenyan and Tanzanian economies are performing very well, there is clearly a group of people who have not been benefiting from that economic growth. It is among the economically marginalised– the unemployed or underemployed – that Al Shabaab or affiliated groups are finding it easier to recruit,” says Sarah Collier, Africa analyst at risk consultancy Maplecroft.

    The gap between the Kenyan elite and the average citizen is illustrated by the fact that in 2013 Kenyan MPs voted to raise their salaries to $120,000 (they have since been forced to back down to $75,000 due to public outcry). By contrast, the average Kenyan earns around $1800 per year.

    According to the OECD’s Mr Pezzini, it is often the frustrated expectations of the new middle classes – those who have recently left poverty but remain vulnerable to sliding back – that can spark unrest.

    “These people are confronted with a frustration: they have reasonable expectations, but then they do not find jobs and then their improvement is vulnerable. Expectation plus vulnerability makes for a strong tension,” he warns.

    High youth unemployment is particularly worrisome from a security perspective. Longer term, under educated and under skilled youth will damage the work forces of tomorrow. Short term, however, the disaffection of many young people is often linked to their vulnerability to recruitment to extremist causes, including Al Shabaab and Boko Haram.

    “What leaders or governments have to offer, it has to be better or at least equal to what these organisations offer to these young people,” says The Rockefeller Foundation’s Mr Biteye. “If we do not do it, we are sitting on a bomb which, if it explodes, is going to cost us many years, and many percentage points in terms of growth.”

    How Africa’s growing business community and its governments respond to the pressures of inequality could have profound implications for the continent’s economic, social and political prospects in the 21st century. While the issue is global, arguably the stakes are highest in Africa, where the majority of the region’s 1.1 billion people have yet to touch the prosperity accumulating in their countries.

    from macro to micro

    Elsie Kanza, Senior director, head of Africa, World Economic Forum

    Africa has made major strides towards overcoming significant political, macroeconomic and social challenges in the last two decades. The continent is more politically stable and, with elections now commonplace, is widely acknowledged to be receiving a democratic dividend.

    The regional economic outlook is also positive, with growth outpacing the global average since 2001. Low government debt levels, rising domestic resource mobilisation and low inflation rates characterise its macroeconomic environment.

    "Africa must accelerate the competitiveness, productivity and efficiency of its markets"

    Elsie Kanza

    According to the UN Human Development Index, 15 countries have attained medium to very high human development. Consumerism is also picking up. In 2008, McKinsey estimated that African consumers spent $860bn on goods and services - more than India or Russia.

    There has been a fourfold increase in external financial flows since 2000. Although resource-rich countries remain the main destination for foreign direct investment, the share directed to manufacturing and services is increasing - largely attributable to improvements in the business environment. According to the World Bank, between 2013 and 2014 sub-Saharan Africa realised the largest number of business regulatory reforms globally.

    Yet these successes have failed to translate into structural transformation. Africa’s leaders are now faced with the urgent need to pursue bold microeconomic reforms to realise the continent’s potential.

    At the 25th World Economic Forum on Africa this June, we will be calling on our regional and global leaders to rethink Africa’s roadmap for the 21st century in three ways.

    First, the continent must better mobilise, efficiently use and safeguard its resources to meet the enormous demands that it faces. Land and energy stand out.

    Africa has 60 percent of the world’s uncultivated arable land, but is a net importer of food - at a cost of $35bn a year. Only 5 percent of land is irrigated, and fertiliser use is well below other emerging regions such as Asia. In energy, about 30 percent of global oil and gas discoveries in the last five years were in sub-Saharan Africa, yet only one third of Africans have access to electricity.

    Second, Africa must accelerate the competitiveness, productivity and efficiency of its markets. According to the African Development Bank, the informal sector accounts for about 55 percent of sub-Saharan Africa’s GDP and 80 percent of its labour force. Harnessing the latent capacity of this sector could dramatically improve people’s well-being and overall investment.

    An industrial revolution is touted as a means of bringing about structural transformation and high economic growth. However, between 1995 and 2011 the annual per capita growth in the services sector averaged 2.6 percent, compared to 1.7 percent in industry and less than 1 percent in agriculture.

    Intra-African trade - which remains the lowest globally at less than 15 percent - offers another opportunity for inclusive growth. According to the World Bank, the biggest burden for logistics and transport is paperwork, inspections and customs procedures, suggesting that even with existing infrastructure, there would be significant gains from boosting local and regional value chains.

    Third, Africa needs to be more creative in developing solutions that are suited to its unique environment. Solutions to transform Africa’s majority rural population will differ vastly from solutions applied to its fast-urbanising cities.

    Creative thinking and technology are providing new opportunities to serve African needs with quality, affordable solutions. Cape Town in South Africa, for example, has undertaken more than 460 socially transforming projects in collaboration with its citizens.

    The key to unlocking Africa’s creativity is education. With an estimated 30 million children in sub-Saharan Africa out of school, only 5 percent of students completing tertiary education, and African researchers producing only 1 percent of the world’s research, the path ahead is arduous. More must be done. Some learning innovations are bearing fruit, such as the Bridge Academies in Kenya and the African Leadership Academy in South Africa.

    Online learning is also taking off. Home to just below half the global population of unique mobile phone subscribers, mobile telephony is creating a new interface for learning.

    Last but not least, the continent needs to strengthen its resilience to risks. According to the World Economic Forum’s 2015 Global Risk Report, the three risks Africa is least prepared for are unemployment or underemployment, food crises and the spread of infectious diseases. Ensuring that any gains made are not eroded overnight by crises must be an integral component of any future growth strategy. As a Ghanaian proverb reminds us, even the lion, the king of the forest, protects himself against flies.

    Is doing good the new doing well?

    Tom Stevenson

    The Millennium Development Goals (MDGs), a set of broad objectives adopted by the United Nations in 2000, have set the tone for global development since the turn of the century.

    They encompass much of the development spectrum – from poverty reduction and gender equality, to healthcare, education and environmental sustainability – but make a critical omission: the role of the private sector in achieving these targets.

    Much has changed in the 15 years since the MDGs were introduced. Over the past decade and a half, the private sector has come to be widely recognised as a crucial stakeholder in efforts to build more inclusive economies and to foster sustainable, shared development.

    "Ultimately our job has to be to drastically reduce the costs of doing good to companies, because it is only with a commercially viable approach that there can be sustainable improvements in the long term."

    Kristian Moeller

    When UN Secretary-General Ban Ki-moon announced a high level panel to advise on the post-2015 global development framework, it included private sector representation in the form of Unilever CEO Paul Polman and Betty Maina, head of the Kenya Association of Manufacturers. Two out of 27 may not seem like much, but the move is reflective of an important shift in global development.

    With a post-MDG agenda taking shape – the goals expire in 2015 – business looks set to take a more prominent position.

    It is a shift that comes at a critical time for developing regions, particularly sub-Saharan Africa. After more than a decade of sustained, high GDP growth, optimism is building about the region’s economic potential. With local and international investment at unprecedented levels, striking a balance between the bottom line and development will be critical.

    As international businesses turn to regions such as Africa in search of higher growth rates and returns than developed economies, the rules of investing are changing. Far from being contradictory notions, some companies are adapting to the idea that doing well and doing good can go hand in hand. In places such as sub-Saharan Africa, there may not be an alternative.

    For Tove Stuhr Sjøblom, senior vice president for sub-Saharan Africa at Statoil, Norway’s biggest oil company, the shift towards a more central role for businesses in development is clear.

    “We have been in Africa for more than 20 years and our operations there are very important to us,” Ms Sjøblom says, pointing out that operations in Angola represent the largest source of production for Statoil outside of Norway.

    “But we are now often asked whether our operations are good for the country they are in as well as being good for us.”

    Statoil is part of a wider trend, which is seeing increased emphasis on sustainability and long-term development as part of core business strategy. Ideas such as inclusive business models, for example – where the bottom line and having a development impact are complementary objectives – are gaining traction.

    “You cannot afford to navigate by the quarterly profits report,” says Paul Collier, co-director of the Centre for the Study of African Economies at Oxford University. “Short term does not work. The road to bankruptcy is paved by the short term, by the quarterly profit schools.”

    Firms are increasingly recognising this. Particularly where longer-term investments are involved, a more stable society leads to a more stable business environment. Inequality is now understood to breed social instability and dampen growth. As a result, many businesses feel that severe inequality must be worked against by companies alongside governments and NGOs.

    “We do this in multiple ways, but the main two are generating revenue for the countries in Africa we operate in, and then by encouraging transparency which is very important to us because it is important that the public can see the benefits,” says Ms Sjøblom.

    This is not always easy. Some companies describe themselves as humbled by the task of ensuring their operations contribute positively to the lives of the populations that surround them – particularly in some of the less than liberal political environments on the continent.

    “It is very hard for industry to take the position of going in and telling governments to have certain standards, and I would say we even should not be doing that if we could,” Ms Sjøblom says. “What would trigger us to have a moral right to go in and dictate to a government? In the end countries have political structures with their role and we have a role as well.”

    “Our approach is we try to set an example by publishing what we pay to governments and working for increased transparency to enable the public to hold officials to account.”

    Reporting mechanisms, initially driven by civil society activists, are now becoming mainstream for companies, especially in the extractives sector. Metrics such as the Extractive Industries Transparency Initiative (EITI) scheme, as well as new regulatory requirements for US-listed companies to report on payments under the Dodd Frank Act, are increasingly making open reporting standard practice.

    Taking context into account

    Better reporting is, of course, only one piece of the puzzle. Doing good is also a matter of having a solid understanding of the country you are investing in – and the contributions your particular business can make in that context.

    “One challenge is, firstly, having a clear idea of what you can do: a construction company, for example, can literally build bridges but a consumer goods company has to work through its brands. Not all the institutions involved in this debate are comfortable with that yet,” says Dougie Brew, external affairs director for Africa at Unilever, the world’s third largest consumer goods company. Unilever has committed to sourcing 100 percent of agricultural raw material sustainably by 2020.

    “The fact is that the prices of many consumer goods in Africa are simply still far too high and we have to find ways to lower them to better serve all communities,” he says. “Typically those beginning to move off the bottom of the pyramid are badly served.”

    According to Mr Brew, companies have to first look at what the real social issues are. In Nigeria, for example, oral hygiene is a major problem, and is a common reason for children to miss school. As a result, Unilever has looked at products to promote clean teeth.

    International firms are also often accused of still being fundamentally extractive in their approach to Africa, taking large profits and employing relatively few local people. This echoes critiques of the economic models that drove the colonial project on the continent. Mr Brew feels this is an oversimplification, and that to understand the full value of a company’s contribution one needs to look all the way down the value chain.

    “When you look at products like soap, soup, or stock cubes, you see that the jobs created in packaging, distribution, delivery and so on are substantial, much more substantial than direct employment,” he says. “For young people that is where the jobs come – in local service companies, advertising and marketing.”

    Reporting on bottom lines

    Though the picture painted by companies is one of a coordinated shift towards a new way of approaching business strategy in Africa, there are those who doubt the ability of a sector built around profit maximisation to also act as arbitrator of public interest.

    “The corporate social responsibility agenda is basically a reflection of the weakening of the regulatory capacity of the state. The state said: well, we cannot regulate you, but please be nice,” argues Thandika Mkandawire, the London School of Economics’ chair in African development.

    “Historically inclusion has been part of social policy...What we are talking about in Africa is almost a voluntary process for the private sector – this has never happened. So I do not think it will happen in Africa.”

    There will always be a direct economic cost to companies who invest in “doing good”, concedes Kristian Moeller, CEO of Global GAP, an international organisation that promotes sustainable farming through voluntary certification standards. The key to offsetting these costs is by recognising and accounting for them in order to ensure real change.

    “Ultimately our job has to be to drastically reduce the costs of doing good to companies, because it is only with a commercially viable approach that there can be sustainable improvements in the long term,” he asserts.

    He is also a firm proponent of building measurable achievements into any new development agenda for Africa. His solution, known as the Declaration of Abu Dhabi, is derived from experience in agricultural development. Its aim is to create a market framework that recognises the economic value of doing good in a way that people can clearly see.

    The way to do this? A harmonised, open source reporting system that would transparently promote “doing good”.

    This solution speaks to another kind of bottom line, according to Mr Moeller: “If you lose out by doing good, then you do not do it”. He hopes the declaration can act as the basis for a standardised system of metrics, and a consistent language that can be understood by all.

    So far, 34 signatories have joined the initiative, including big names such as Nestlé, Unilever, as well as the United Arab Emirates, and the International Trade Centre.

    “It is easy to talk about how things are changing, but this is about showing it and securing it. Now the task is to implement this,” he says.

    International business is beginning to recognise the extent of its responsibility in developing countries, and has a chance to prove it can be a major part of this agenda. However, integrating social value alongside bottom lines is a long term project, and one that involves fundamentally altering the ways we think about company value.

    “The market is not constructed towards doing good and sustainability – there is, after all, quarterly reporting,” Mr Moeller says. “What needs to happen is to change the paradigm of approach in order to create economic value for those doing good."

    A healthy population is a healthy market

    Allan Pamba, Vice president, East Africa and Government Affairs, GlaxoSmithKline

    Good health underpins prosperity at an individual and societal level. Countries thrive if their people are well – a healthy population is a healthy workforce, which is needed to develop a robust economy.

    Crowds of young people navigating the near-static morning traffic in Kenya’s capital Nairobi as they head to find work are a clear sign that this potential exists in Africa. But too often, they will return home with no wage. Unlocking human potential – through investment in health, education and employment – should, over time, build economic capacity and strengthen communities across the continent.

    "The private sector needs to support inclusive growth in Africa by being more flexible and long-sighted. This requires companies to reach those at the bottom of the pyramid."

    Allan Pamba

    Of course this potential is fragile, as the Ebola outbreak in west Africa illustrates. As well as claiming thousands of lives, Ebola has broken communities and stopped people going about their business. It has effectively shut down economies and underlined how critical strong healthcare systems are.

    Although huge strides have been made across Africa in improving health delivery, the infrastructure remains under-resourced. Not only does this compromise capacity to manage preventable diseases such as malaria, but also leaves it vulnerable to the parallel threat from diseases such as cancer and diabetes – which is accelerating as lifestyles change.

    With long-term investment Africa could further strengthen its healthcare infrastructure so it is better able to anticipate, prevent and manage healthcare needs. This would help preserve human capital, consolidate economic gains and enable more people to share in rising prosperity.

    Governments lead the charge in investing in and developing health systems that are accessible, safe and deliver the services people need without plunging patients into financial hardship. There are some great examples of countries implementing this approach – such as Rwanda’s inclusive health system. But the private sector has a crucial role to play too.

    Large pharmaceutical companies like GSK can contribute in a tangible way to enabling people to live healthier lives. By doing what business does best – in our case, developing medicines and vaccines and improving access to them – we can use our innovation, resources and reach to create prosperity, provide employment and deliver the goods and services that people want and need.

    Fulfilling this requires us to be radical and challenge existing models. To help reach more patients in Africa, we have switched our focus from price to volume, capping prices of our patented products in least developed countries (LDCs) at no more than 25 percent of those in developed countries. This has helped our business to grow and contribute to the healthcare ecosystem. In LDCs, one-fifth of our profits are reinvested into training frontline health workers in those areas. This will hopefully act as a catalyst for much-needed investment in health systems from other quarters.

    GSK is building on this approach to help deliver inclusive development. Investments in local manufacture through new factories will help ensure a sustainable source of affordable medicines and employment – and enhance regional self-sufficiency. Supporting scientific research into non-communicable diseases and academic chairs in areas such as engineering should strengthen Africa’s knowledge base.

    Investing in healthcare does not have to be limited to the healthcare industry. Given that all sectors can benefit from a healthier population, it makes sense for other industries to participate in improving access. We are already seeing this among organisations including Vodafone and Barclays. It is not only multinationals, though. There is a swathe of smaller, informal enterprises across Africa ready to play their part.

    Africa has witnessed the potential of the private sector in action – bringing jobs and pockets of wealth. But business has not always got it right, with the formal private sector relatively fragmented and concentrated in particular economies. There are steps governments can take to mitigate this: strengthening economic blocs, such as the East African Community, and driving stronger intra-African trade. This will help lock wealth into the continent. Bold investments in high demand vocational skills will allow Africa to capitalise on its demographic dividend.

    For its part, the private sector needs to support inclusive growth in Africa by being more flexible and long-sighted. This requires companies to reach those at the bottom of the pyramid and grow with them overtime – as we are trying to do through our volume model. It also requires business to collaborate with other companies, NGOs and governments to bring investments and innovations that are relevant to the strengths and needs of particular communities.

    This is not without its challenges and risks. But creating a blueprint for business that is responsive and interconnected could secure healthier lives, livelihoods and markets; and help generate investment in healthcare that strengthens economic gains, and allows more people to share in them. This is an ambition worth pursuing – not only in Africa, but further afield too.

    For inclusive rural development, farms come first

    Kanayo F. Nwanze, President of the International Fund for Agricultural Development

    Thinking about the future of agriculture in Africa fills me with both pride and trepidation. I am proud that Africa is home to some of the world’s fastest growing economies, and that the region has seen foreign domestic investment triple over the last decade.

    However, I am concerned that agriculture’s potential to drive inclusive development is being forgotten. Agriculture is our number one ally in the fight against poverty and hunger. Its development must be a top priority.

    "Agriculture is our number one ally in the fight against poverty and hunger. Its development must be a top priority."

    Kanayo F. Nwanze

    Sadly, levels of hunger and poverty in sub-Saharan Africa remain consistently higher than those in other regions of the developing world. In Latin America, the extreme poverty rate has fallen by 50 percent since 1999. In east Asia, it has dropped by 63 percent. However, overall sub-Saharan Africa’s poverty rate fell by just 17 percent in the same period.

    More recently, of course, we have seen the tragic Ebola outbreak claim thousands of lives in west Africa. Those populations have already suffered decades of civil conflict and failed development. The epidemic may well be compounded by a regional food crisis, as trade is disrupted and fields are abandoned by farmers due to fear of infection - or because there are no farmers left.

    Today, two thirds of Africans earn their living from agriculture or fisheries, yet the continent imports $35bn worth of food every year. Why? This is food that can and should be grown in Africa, by Africans. This is money that should be flowing in to support African businesses, not outwards.

    There is no excuse for these contradictions, because Africa’s agricultural potential is immense. The continent has the world’s largest share of uncultivated land, where rain fed crops could grow in abundance. More importantly, current farming systems are performing very poorly, well below their potential productivity levels. These could be doubled or quadrupled with help from yield enhancing inputs and conducive policies – in short, through sustainable intensification. Africa also has the youngest population in the world, with approximately 10 million young adults entering the workforce each year.

    The International Fund for Agricultural Development (IFAD), together with Farming First, wants to see Africa’s agricultural promise fulfilled.

    Only around 5 percent of cultivated land in Africa is irrigated, compared with 41 percent in Asia. At the same time, farmers in Africa apply only 10 to 13kg of fertiliser per hectare of cultivated land. This compares to more than 100kg in south Asia – even though roughly 75 percent of African soils lack the nutrients needed to grow healthy crops.

    Irrigation alone could boost the continent’s agricultural output by 50 percent, and efficient use of fertiliser has been proven to triple yields. Imagine the future Africa could have if the appropriate investments and policies were in place to realise just these two interventions.

    Of course, that would require a colossal commitment on the part of governments to building the appropriate infrastructure. How can we get fertiliser to farmers when just 16 percent of the roads are paved, and more than one third of sub-Saharan Africa’s rural population lives five hours from the nearest market town of 5000 people? Upgrading the road systems would cost an estimated $38bn. On the other hand, it would increase yearly trade by as much as $250bn. This is the future that we should make every effort to reach.

    In addition, two major sectors of society – women and young people – must be empowered in order for African agriculture to take off.

    Given the central role of women in agriculture, as well as in ensuring household nutrition and wellbeing, their empowerment is a vital component of rural transformation. Africa’s overall GDP could grow by an estimated 11 percent if nutrition levels were improved. If women farmers had the same access to training and resources that men do, the number of malnourished people could be reduced significantly.

    Meanwhile, Africans aged 14 to 25 comprise a vast workforce of 200 million. With youth unemployment and underemployment rates as high as 35 percent, however, much of that capacity to contribute to society is going to waste. Developing the whole agricultural value chain – from production to processing, marketing and consumption – is key to creating jobs, wealth and a hopeful future for this new generation.

    To realise Africa’s potential, we need to dramatically change the way we look at agriculture. Smallholder farming is a significant economic activity, a business enterprise that feeds people and generates wealth. It is a dignified profession and needs to be treated as such, and not just as an activity of the rural poor.

    We must take collective action to ensure that Africa’s future includes a vibrant and productive rural economy, which begins on the farm. Only then can we hope to see a continent that is prosperous and free of hunger.

    Redefining policy boundaries

    Adrienne Klasa, This Is Africa

    In 2009, Ethiopia’s then prime minister Meles Zenawi got upon stage at the G20 meeting of major economies to make a core demand: that African nations be given the space to experiment with economic policy with less interference from Western donors.

    “I do not know whether I need to explain why sovereign African nations should plead to be given policy space,” Mr Meles said. “The simple answer is that they are not so sovereign when it comes to economic policymaking.”

    “[African] countries are faced with a very well-coordinated and solid policy orthodoxy [from donors]...they either adhere to it and get the money, or chart their own course and face the risk of the drying up of external assistance.”

    "When it comes to making Africa's economies more inclusive, the private sector may hold the purse strings, but policy holds the key to creating the right environment."

    Since that appeal, the global economic and policy environments have changed dramatically. The 2008-2009 financial crisis triggered a global recession which has shaken the credibility of the very collection of orthodox economic policies – known as the Washington Consensus – that Mr Meles was railing against. Major emerging markets, led by the likes of China, Brazil and India, have become influential players in reshaping the global economy.

    The Brics country grouping – Brazil, Russia, India, China and South Africa – is in the process of establishing the New Development Bank, intended as an alternative to the historically dominant World Bank and International Monetary Fund (IMF). Headquartered in Shanghai, its principal aim is to foster closer economic integration amongst the Brics members.

    The emergence of alternative policy frameworks could spell good news for African governments, many of which face the daunting task of restructuring their economies to focus not only on fast growth, but also the quality of that growth to ensure it provides more economic opportunities for their populations. With the age of neoliberal economic orthodoxy seemingly drawing to a close, governments may now have more freedom to intentionally shape policy around these objectives.

    While Africa is home to many of the world’s fastest growing economies, it holds a similar distinction for the most unequal societies.

    “We need to think more carefully in terms of the quality of jobs, the quality of growth and the kinds of policies that need to be put in place in order to ensure inclusion,” says Gabriel Negatu, a director at the African Development Bank (AfDB).

    The Washington Consensus is a varied concept, but at its core it emphasises fiscal discipline, deregulation, and privatisation as the means for countries to develop. In Africa, this approach manifested itself in the now widely discredited structural adjustment policies tied to state loans pursued by international financial institutions throughout the 1980s and 1990s.

    As a result, developing countries were pushed to privatise state-owned assets, shrink the role of government, and roll back centrally planned economic and industrial policies. Now, the ideology underpinning these assumptions is coming back into question.

    “The thing that has happened in the past ten years is the loss of leverage of the international institutions, at least the IMF and World Bank. Countries have their own resources now, there is the China factor...and the intellectual demise of The Washington Consensus,” Professor Thandika Mkandawire, African development chair at the London School of Economics (LSE), tells This Is Africa.

    “This is a very good thing.”


    Given the size of the tasks at hand if an agenda of inclusivity is to become a reality - including the need to fill an estimated $3tn dollar infrastructure gap, modernizing agriculture for millions of farmers, and curbing $1.4tn in annual capital flight from the continent, to name a few – collaboration across sectors and geographies will be essential.

    After many years of largely discredited policy initiatives aimed at driving development across the continent, talk of the role of government in consolidating Africa’s recent economic success remains potentially contentious. Critics attribute the continent’s development failures in recent decades to decisions made by governments, and contend that development in Africa must be driven by business. But while the private sector may hold the purse strings and looks set to play an influential role, some believe there is no escaping the role of public institutions in creating the right environment.

    “I think that the whole debate about inclusive societies and inclusive economies is about the role of government. I think at the core of the role of government is creating inclusiveness [and] I do believe in big government in that sense,” says Frank Braeken, chief investment officer at Amatheon Agri Holding, a sub-Saharan Africa focused agribusiness and farming company.

    This debate is not unique to Africa. In the US as well as Europe, the size and role of government in public life is an open, and often controversial, topic. In the US especially, this is the fundamental question that divides politics.

    In Africa, the last time there was a serious debate about the role of government in supporting wealth creation was in the 1970s, when inequality also spiked driven by another commodities boom. Despite some attempts led by the World Bank to create a consensus around the need to address inequality on a policy level, the issue quickly fell off the agenda.

    There is always the risk of this repeating. However, the contemporary political context differs in important ways. Unlike the 1970s, the majority of countries in Africa have made the transition to some form of democratic rule. While often fraught with deficiencies, democratic institutions have contributed towards a more stable political and macroeconomic environment on the continent. They have also, usually in limited ways, raised the level of government accountability in many countries. The trick now is to make them developmental, according to Mr Mkandawire.

    “Governance in Africa has improved - not in the sense of World Bank indicators, but in the sense that for most governments in Africa today their main source of legitimacy is economic performance,” he says.

    This stands in contrast, he argues, to the 1960s and 1970s, when legitimacy was based on nation-building in the post-colonial era. The nextstep is ensuring that a development agenda premised on greater equality becomes a domestic - not a donor driven - strategy.

    “It needs to be internally driven,” says Mr Mkandawire. “If not, I fear that in Africa it is going to become another international, NGO debate.”

    The beginnings of success stories?

    If economic legacies are increasingly important, governments’ decisions in the coming years could prove pivotal. With the commodities super cycle slowing down, translating wealth into dividends for citizens is the next big challenge – and a process that has proved far from automatic.

    “Social inclusion, productive employment and sustainable development are not straightforward by products of economic growth policies,”Geraldine Fraser-Moleketi, the African Development Bank’s special envoy for gender, points out.

    “Policymakers need to intentionally shape and channel market forces into context specific interventions that may lead to large positive welfare impacts.”

    In most of the continent’s new democracies, economic policy has tended to remain quite cautious, with policymakers either unwilling or unable to experiment. Reacting against their authoritarian predecessors who stood against structural adjustment, economic agenda-setters “went whole hog for structural adjustment,” Mr Mkandawire argues.

    “They did not care so much about the macroeconomic - they took the dominant discourse on macroeconomics. Now you are seeing some kinds of change as governments become less orthodox,” he says.

    One mechanism a number of important economies are pursuing in order to capture policy space are national planning commissions. From Kenya to Nigeria, Uganda and South Africa, many of the region’s biggest players are using commissions to plan development policy over multi-year periods and coordinate between government ministries and agencies.

    According to Ms Fraser-Moleketi, these are important forums for countries “to develop models and have the space to shape a direction going forward”.

    South Africa is considered a forerunner in this regard. Despite experiencing recent economic pressure due to labour unrest and plunging prices in its essential mining sector, it has a long history of examining development priorities

    “South Africa is the exception that proves the rule, due to its unique history. This kind of discussion took place within the African National Congress [South Africa’s ruling party] and within all sorts of forums ten years ago, asking: how do we get out of this?” Amatheon Agri Holding’s Mr Braeken says, referring to the legacy of economic segregation the country inherited after the fall of apartheid in 1994.

    “I do believe South Africa is absolutely the model to follow in this.”

    While South Africa may be a benchmark when it comes to planning, the country has struggled when it comes to the all important question of execution. There is no shortage of solid development plans in South Africa - implementing them has proven more difficult.

    Other examples of government policy taking a leading role in driving economic transformation include Ethiopia and Rwanda. Starting from a low baseline, both have experienced fast-paced growth over 8 percent over the past decade. However, in contrast to other fast growing African countries, both have achieved substantial falls in poverty rates, while changing the structures of their economies.

    Both countries exhibit a particular leadership style which,under the right circumstances, can act as a catalyst for meaningful development, argues Paul Collier, co-director of the Centre for the Study of African Economies at Oxford University.

    “A generation has sacrificed in order to build a better future, and it has worked [in places like China]. Not many African countries have got that narrative. Ethiopia has, and Rwanda has.”

    Ethiopia’s example has sparked particular interest. The country is not a hydrocarbon or mineral exporter, but has managed to break into light manufacturing – mostly in textiles and leather goods.

    However, while these early successes offer interesting case studies, there are questions as to how replicable they are. Both countries have unique histories. In Rwanda’s case, its development trajectory has been defined by recovery from the 1994 genocide that devastated the country. In Ethiopia’s, the country was never colonised, and maintained a strong non-aligned position throughout the latter half of the 20th century – often placing it at odds with Western donors. Neither are considered full democracies.

    “These two cases, Rwanda and Ethiopia, they are quite interesting cases because they are somewhat authoritarian. But quite strangely they are independent, which makes the model almost immediately non-replicable on the pan-African scale,” Mr Mkandawire of the London School of Economics explains.

    “In the case of Ethiopia, there was also an ideological dimension. Prime Minister Meles was very obsessed with the idea of creating a development state, looking to Asia.”

    The examples of Ethiopia and Rwanda raise the familiar question of whether democracy is a necessary prerequisite for successful development. The experience of some of Asia’s miracle economies, including South Korea and China, suggest it is not. In Africa, the picture is a mixed one.

    Mauritius, for example, ranks as one of the continent’s more successful economies – as does Botswana, whose remarkably stable government has intervened strongly in industrial policies. Both are democratic.

    The LSE’s Mr Mkandawire argues that, for governments struggling to adopt an effective economic transformation agenda, “it is more an ideational problem in that most new democracies do not think that they can do anything. They will just follow the market”.

    Creating a conducive policy environment for economic inclusion is a multi-faceted challenge for African countries, and one that will require serious investment of political and financial resources to bring about. What seems clear is that across geographies and sectors, there is a growing consensus that inclusive – not just rapid – growth will need to be prioritised going forward. Governments and policymakers will have a central role to play in bringing this to fruition.

    “Development is about people, economics are about people, and if Africa wants to grow it has to grow with the entire population,” says Julius Kipng’etich chief operating officer of Kenya based Equity Bank, which focuses on commercial lending to low income consumers across east Africa.

    “It is a question of how you design the model that brings everybody on board, and the first thing that must happen is that governments must design economic policies that bring people on board, as many as possible.”

    Final Word: Mamadou Biteye

    Managing director for Africa, The Rockefeller Foundation

    Interview by Adrienne Klasa

    For Mamadou Biteye, the story of stark disparities in Africa is not new. “The issue of inequality has been there for a long time,” The Rockefeller Foundation’s managing director for Africa tells This Is Africa.

    But with inequality – both globally and on the continent – reaching new heights, the time for serious conversations about concrete solutions is urgent.

    In Africa, the narrative of the continent’s rise, premised on strong GDP growth, increased stability and favourable demographics, stands in sharp contrast to the daily realities encountered by the majority of its growing population of 1.1 billion. “While this growth is praised everywhere, statistics tell us also that the gap is widening, poverty is increasing,” Mr Biteye notes.

    "Circumstances are really bringing to the fore the question of inequality and the need to change this by building more inclusive economies."

    Mamadou Biteye

    “These circumstances are really bringing to the fore the question of inequality and the need to change this by building more inclusive economies.”

    Tackling inequality is a challenging task. Mr Biteye points to global trade rules as one venue where African countries have been disadvantaged. “We know...that because of subsidies that skew the market, or other policies in rich countries, this has the impact of making developing countries even poorer.”

    Stemming illicit financial flows, particularly those diverted from natural resource revenues, is another key issue. “Right now we are saying this growth is driven by extractives,” he explains, but “some research shows that less than 30 percent of the proceeds remain in the countries.” Illicit flows are estimated to drain about $1.4tn per year from the region.

    While corruption plays a role in draining public coffers, so does the lack of capacity in many of Africa’s governments to negotiate fair deals with companies. If properly managed, “extractive projects have the ability to generate the income that would allow these countries to invest in social protection, in education, in health, in other key sectors that contribute to building more inclusive societies,” he asserts.

    However, extractives can only be one part of the solution. Developing the region’s human capital will also be essential “so we can really move from primary products exporting countries, develop our industries, transform commodities and add value,” he says.

    Reforming education systems to be more in line with the demands of modern businesses will be an essential component - both in terms of preparing workers for a more industrialised economy, as well as tackling chronically high unemployment. Evidence points to the fact that the quality of education is deteriorating. The result is that students “will soon be adults who will not be well educated, who have skills that do not match needs”.

    For The Rockefeller Foundation, talking about the issues surrounding inclusive economies is the first step. Last December, the Foundation convened the Africa Forum on Inclusive Economies, in partnership with the UN Economic Commission for Africa (UNECA) and the African Development Bank (AfDB). Held in Nairobi, Kenya, it brought together stakeholders from the public and private sectors, as well as civil society.

    Mr Biteye explains that the gathering is part of a long-term vision, and hopes it will act as a platform to move from “consensus on the issue to real action: what are the tools...that governments need, private sector needs, all stakeholders and actors need, in order to make inclusive economies a reality?”

    The Foundation and its partners are now taking the next step towards concrete solutions. Metrics are being developed to track progress on inclusiveness by UNECA. The result is the African Social Development Index(ASDI), slated for launch in March 2015. Rockefeller, for its part, has established an accelerator fund. Partners so far include Microsoft.

    As the project takes off, Mr Biteye hopes more will come onboard. “Our vision is that this fund is going to support research, but it is also going to support the piloting of good ideas, surfacing inclusive business models,” he explains. In addition to providing seed capital and mentoring to startups, the fund will also look at de-risking pilot programmes targeting inclusiveness at multinationals.

    For Mr Biteye, this project points to the role foundations such as Rockefeller can play in the effort to build inclusive economies: “The vision is really this fund, because this is also the role of philanthropy: providing the risk capital.”

    About this is Africa

    This is Africa, a service from the Financial Times, examines African business and politics in a global context. It aims to challenge international preconceptions about the continent and to identify the opportunities and the risks in this dynamic business environment.

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    About The Rockefeller Foundation

    For more than 100 years, The Rockefeller Foundation’s mission has been to promote the well-being of humanity throughout the world. Today, we pursue this mission through dual goals: advancing inclusive economies that expand opportunities for more broadly shared prosperity, and building resilience by enabling people, communities and institutions to be prepared for, withstand, and emerge stronger from shocks and chronic stresses.