Berlin-Africa Economic Forum on Innovation 2014: BUILDING INNOVATION ECOSYSTEMS: OPPORTUNITIES FOR PARTNERSHIPS BETWEEN AFRICA AND GERMANY

1. BUILDING INNOVATION ECOSYSTEMS:
OPPORTUNITIES FOR PARTNERSHIPS BETWEEN AFRICA AND GERMANY
BERLIN AFRICA ECONOMIC FORUM ON INNOVATION
19 Nov 2014, Berlin

2. WHAT WE SHOULD AIM TO ACHIEVE TODAY
A forward thinking agenda aimed at:
⁄Highlighting dynamic new opportunities arising out of Africa
⁄Establishing how Germany can help Africa unlock its true potential
2

3. 3
AFRICA, A FAST-GROWING AND DIVERSIFYING ECONOMY…
Economic resilience:
7 out of the world’s 10 fastest growing economies are in Sub Saharan Africa
GDP GROWTH, UNWEIGHT ANNUAL AVERAGE, %
2.
3.
4.
5.
6.
1970s
1980s
1990s
2000s
2011-15
Asian Countries
African Countries
Excluding countries with less than 10m population , and Iraq and Afghanistan
2001-2010
Angola
11.1
China
10.5
Myanmar
10.5
Nigeria
8.9
Ethiopia
8.4
Kazakhstan
8.2
Chad
7.9
Mozambique
7.9
Cambodia
7.7
Rwanda
7.6
WORLD’S TEN FASTEST-GROWING ECONOMIES*
(Annual average GDP growth, %)
2011-2015
China
9.5
India
8.2
Ethopia
8.1
Mozambique
7.7
Tanzania
7.2
Vietnam
7.2
Congo
7.0
Ghana
7.0
Zambia
6.9
Nigeria
6.8
Source: The Economist, IMF

4. 4
AFRICA, A FAST-GROWING AND DIVERSIFYING ECONOMY…
Economic resilience:
Even after the global recession in 2009, Sub Saharan Africa remains one of the fastest growing regions
Source: MF (2013). World Economic Outlook: Tensions andtransition
-9.
-4.5
0.
4.5
9.
13.5
2005
2005
2007
2008
2009
2010
2011
2012
2013
2014
Developing Asia
Independent States
Sub-Saharan Africa
Middle East and North Africa
Central and Eastern Europe
Euro Asia

5. 5
AFRICA, A FAST-GROWING AND DIVERSIFYING ECONOMY…
Cost of doing business in Africa is reducing
Source: The world Bank Group (2014) World Development Indicators
1. Cost of business start-up procedures (%of GNI per capital)
-9.6
4.3
18.2
32.2
46.1
60.
2003
2013
-9.6
4.3
18.2
32.2
46.1
60.
2003
2. Time requiredto start a business (days)
2013

6. 6
AFRICA, A FAST-GROWING AND DIVERSIFYING ECONOMY…
Creative industries are flourishing
2NDLARGEST FILMINDUSTRY IN THE WORLD
$ 200-300 MN
IN REVENUE PER YEAR
2NDLARGEST EMPLOYER
AFTER AGRICULTURE
Nollywood, Nigeria’s film industry, is a sector to watch.

7. 7
AFRICA, A FAST-GROWING AND DIVERSIFYING ECONOMY…
OIL & NATURAL GAS PRODUCTION
Africa will account for 10% of global oil and 9% of natural gas production in 2035**
Source: BP Energy Outlook 2035
A fast growing middle class and a youthful workforce, with 50% of population below
19 years
GROWINGWORKFORCE
STEADY GROWTH IN
WORLD
TRADE
Trade between Western Africa and Asia is forecast to increase by 14% annually*
Source: International Trade Centre (ITC)
120% GROWTH
OIL RESERVES
From 57 billion barrels in 1980 to 124 billion barrels in 2012. ***
Source: US EIA

8. 8
AFRICA’S CURRENT ECONOMIC LANDSCAPE…
Angola as an example
Rapidly evolving banking sector / Increasingly liberalized & privatized / Asset growth from $3 billion in 2003 –to more than $57 billion in 2011
Annual growth in excess of 7% for the next 2 years (6.8% in KW in real terms or 7.1% in USD)
ANNUAL
GROWTH
GNDP
Gross National Disposable Income grew by 27% between 2007 2012
Source: World Bank
CONSTRUCTION
BOOM
A construction boom that is creating jobs and wealth
HOUSEHOLD
GROWTH
Household Consumption expenditure/GDP grew 35.7% from 2007 to 2013
Source: IMF WDI

9. Luanda then and now…
Luanda -1950
Luanda -2014

10. 10
AFRICA’S CURRENT ECONOMIC LANDSCAPE…
Regional picture is also strong
IMF 2013 Report on sub- Saharan Africa states that:
Between 2007 and 2012, average annual FDI inflows exceeded 5 percentof GDP in 18 countries in the region
Private capital flows to the frontier markets in sub- Saharan Africa doubled between 2010 and 2012
Portfolio and cross- border bank flows also increased –surpassing the $17 billion mark in 2012

11. 11
OPPORTUNITY
Large scale infrastructure projects e.g. transport links, hotels, commercial property
REAL
ESTATE
FINANCIAL
SERVICES
Lagos:
a thriving regional
financial hub
ICT
Projected to be
worth $150 billion
by 2016

12. 12
DRIVING INNOVATION THROUGH AFRICA’S SMES AND STARTUPS SECTOR
SME sector in Sub Saharan Africa accounts for over 90% of all enterprises. In spite of this, in most African countries SMEs contribute less than 20% to gross GDP and barely impact employment levels.
Youth account for 60% of all unemployed Africans.
95-million new jobsneeded by 2020. Another 160-millionnew jobs needed by 2030
REALITY
OPPORTUNITY
Supporting high level innovation can bridge this gap

13. 13
WHAT STANDS IN THE WAY OF AFRICA INNOVATION?
CAPITAL
EXPERTISE AND CAPACITY BUILDING
FAST WORKING INNOVATION ECOSYSTEM

14. 14
HOW GERMAN COMPANIES CAN SUPPORT THROUGH FUNDING…
Innovation &
Competitiveness
VC backed companies spend 2x more in R&D
Promotes creation of innovative product and services
Leads to above average exports growth (1.3-8x higher)

15. 15
HOW GERMAN COMPANIES CAN SUPPORT BEYOND FUNDING…
Investmentsin institutional infrastructure that can create new innovation-led markets, industries and jobs relevant to Africa
Foreign expertise & know howto enhance processes, organizational methods and advisory services

16. 16
WHY ONLY A MUTUAL COLLABORATIVE APPROACH WILL WORK…
Long-term commitmentto support Africa’s strategic economic goals
Strong local partnersto navigate regulatory developments and cultural barriers
In order to succeed in Africa, there must be:

17. 17
AFRICAN INNOVATION FOUNDATION…A LAUNCHPAD
AIF has the largest databaseof African innovators
IPA has received over 2,000 entries from 48 African countries
Technological innovations in the manufacturing and service industries, healthcare, agriculture and agribusiness, environment, energy and water and ICTs

18. 18
THE TIME TO INVEST IN AFRICA IS NOW!

19. THANK YOU!