The 2024 World Economic Forum (WEF) held its annual meeting from January 15 to 19 in Davos Switzerland and this year Africa took center stage outlining strategies for economic growth and development.
The event brought together nearly 3,000 leaders from government, business, and civil society representing over 125 countries. With 350 heads of state and government, ministers, central banks, business leaders, and young leaders, it aimed to promote dialogue and partnership in the face of pressing global challenges.
The theme echoed throughout the sessions was clear: Africa is poised for substantial economic progress, and key leaders and delegates convened to discuss how to unleash the continent’s vast potential.
Africa’s Rising Potential: A Call to Action
A moderator at Davos, Fifi Andrews, sparked a critical question: Is Africa really rising, or is the ‘sleeping giant’ yet to awaken? The discussions that followed highlighted Africa’s promise, potential, and the need for mutually beneficial partnerships.
Focusing on economic growth, African leaders unveiled the Private Sector Action Plan, a groundbreaking initiative between the World Economic Forum and the African Continental Free Trade Area (AfCFTA) Secretariat.
President Paul Kagame of Rwanda and President Nana Akufo-Addo of Ghana, along with the United Nations Development Fund, launched the Timbuktoo start-up fund, aiming to leverage Africa’s youth and dynamism.
The Timbuktoo Start-up Fund
The Timbuktoo Start-up Fund is a collaborative effort involving the UNDP, Rwanda, and seven other African nations. This initiative plans to invest $1 billion over 10 years into 1000 tech startups across Africa, making it the largest startup fund in the continent.
It aims to use $350 million of risk-tolerant capital to attract an additional $650 million from private investors. The goal of this initiative is to provide significant funding to accelerate the growth of the African startup ecosystem, creating 10 million job opportunities and positively impacting 100 million lives. The fund also plans to collaborate with local universities to support tech ventures.
Challenges Amidst Opportunities: Navigating Africa’s Path
While the promise of growth is evident, Africa faces its share of challenges. Emmanuel de Merod, Director of the DRC’s Virunga National Park, highlighted issues such as violence, extreme poverty, and environmental degradation in Eastern Congo, stemming from the scramble for resources. These challenges draw on the need for real-world solutions to Africa’s most pressing problems.
Kagame emphasized the importance of capacity building, stating, “We cannot address global inequality by mitigating crises as they happen. We need to involve developing countries from the beginning.”
Director General of the World Trade Organisation (WTO) Ngozi Okonjo-Iweala, highlighted the shift in global trading power towards the South. She emphasized,
“We’re interdependent, and we need to work together. We need to solve the problems of the global commons.”
AfCFTA: Unleashing Africa’s Potential
At the heart of Africa’s economic revival is the AfCFTA. The initiative, projected to host 1.7 billion people and oversee $6.7 trillion in consumer and business spending by 2030, serves as a catalyst for the continent’s potential. The Secretary-General of AfCFTA, Wamkele Mene, declared,
“Since the operationalisation of the AfCFTA, 47 countries have ratified the agreement. We have seen the start of trading in earnest and goods moving across borders.”
Vice-President of Nigeria, Kashim Shettima, emphasized the role of entrepreneurship, stating, “Africa holds the promise, but we need partnership. We can carry our poverty with dignity.”
Unlocking Capital for Growth
Mary Vilakazi, CEO-Designate of FirstRand Ltd, Africa’s largest lender by market value, speaking at Davos shed light on the frictional cost of trade in Africa, estimated at $5 billion a year. Vilakazi emphasized the need for banks to prioritize businesses that create jobs and build infrastructure, addressing structural and regulatory barriers to trade.
South Africa’s Minister of Finance, Enoch Godongwana, advocated for BRICS, emphasizing the reform of international, multilateral institutions to mobilize savings in the South for better development. He stated,
“Africa is the next global frontier because entrepreneurship is embedded into the psyche of the average African.”
Also, Deputy Prime Minister and Minister of Foreign Affairs of Ethiopia, Demeke Mekonnen Hassen, expressed the importance of a continental shoring up in peace, security, economy, and digitalization. Ethiopia’s recent entry into BRICS positions Africa to play a pivotal role internationally.
Commodity-Led Industrialization
Amidst the discussions at Davos 2024, a pivotal spotlight was directed towards Africa’s ambition for Commodity-Led Industrialization. The leaders explored how the continent’s abundant mineral resources could become catalysts for widespread industrial growth.
The panelists stressed the importance of significant private investments and the necessity for clear, consistent policies at national, regional, and continental levels.
Denys Denya Executive Vice President at Afreximbank highlighted the importance of significant private investments and the necessity for clear, consistent policies at national, regional, and continental levels.
He gave examples of successful initiatives, where value addition to commodities has been achieved such as the Africa Cocoa Initiative, a collaboration between Afreximbank and Côte D’Ivoire, Ghana, and Cameroon, aimed at increasing local processing of cocoa.
“At Afreximbank, we’ve witnessed success in value addition. The Africa Cocoa Initiative, for instance, increased cocoa processing locally. We’re expanding this initiative to other products like cashew, cotton, and more.” – Denys Denya
Africa’s Stance on AI and Electric Vehicles
Discussions on artificial intelligence (AI) and electric vehicles (EVs) drew attention to Africa’s position on these transformative technologies. While embracing the opportunities, leaders emphasized the need for collaboration, a realistic approach, and addressing challenges to ensure sustainable and inclusive development in these domains across the continent.
“Generative AI has the potential to revolutionize industries across the African continent. We are witnessing rapid acceleration, especially since the Covid-19 pandemic.” – *Kwame Ofori Appiah, Panel Moderator
African leaders stood that while AI offers opportunities for productivity gains and innovation, it’s crucial to address concerns related to security, privacy, and inclusion.
On the other hand, Africa is taking a practical approach to EVs. Instead of trying to become a massive global car manufacturer right away, they’re focusing on smaller steps. Eugene Mayne, CEO of Tristar Group stated,
“Africa is at a stage of industrialization where immediate aspirations to become a massive global car manufacturer may be ambitious. The focus should be on incremental steps, value addition, and addressing infrastructural challenges.”
Also, Sanjeev Gupta, Director of Finance at Africa Finance Corporation stressed the need for a sustainable approach to EVs. He said,
“For a successful electric vehicle industry in Africa, there needs to be a balance between setting realistic goals and creating a supportive ecosystem. Collaboration between governments and the private sector is crucial.”
At Davos 2024, Africa emerged not just as a continent facing challenges but as a dynamic force with immense potential. The call for partnerships, innovative solutions, and strategic collaborations echoed through the sessions, leaving a lasting imprint on the global economic landscape. Africa is not merely rising; it is asserting its role as a key player in shaping the future of global prosperity.
Contributor: Juliet Anine
