DAS: Africa: A diamond in the rough

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By Tony Das

COMMENTARY:

It was reminiscent of the iconic film scene from "Five Easy Pieces." Jack Nicholson's character orders two slices of toast; but the waitress says they have no toast. Noting on the menu she does have a toasted chicken salad sandwich, he orders that, sans chicken salad - getting his toast.

In 1979, I was in the capital of Upper Volta in West Africa attempting a phone call to my hometown of Abidjan in neighboring Ivory Coast. The operator said she could only send international calls to Paris, but allowed that they transited Ivory Coast. Asked to put the call through, but have the Abidjan operator call me back before she relayed to Paris, she did so and my call home was completed.

Three decades ago, the shortest and cheapest air routes among many African nations also involved expensive and time-consuming transits through the capitals of the continent's former European colonial rulers. Electricity was a scarce commodity, perhaps because so few Africans truly needed it. Government oil officials in Gulf of Guinea nations reveled over new oil discoveries, but scratched their heads about who would execute oil production in a region that makes the Middle East look easy. Western investors were just plain scared about commitments to Africa.

Over the last 30 years, Sub-Saharan Africa has speeded under commercial and investment radar screens to become a regional economy boasting: a 46 percent growth in mobile telecommunications subscribers with international access who were never fettered by the need to "convert" from traditional landline networks; increased air travel direct routes resulting in a 12 percent annual increase in revenue, even as Western airlines suffer; and the opening of an untapped market of 750 million consumers who really need a cutting-edge electrical grid.

Countries such as South Africa, Nigeria and Ghana, where power grid requirements 30 years ago were arguable, have emerged as significant economies that must upgrade capacity at scales and timetables never faced by any G-8 nation. The Gulf of Guinea accounts for more than 21 percent of U.S. oil imports, exceeding those of Saudi Arabia. But 21st century technological expertise is required to grow Africa's energy infrastructure.

A lens focused on human rights violations and corruption often clouds the African optic of many American business and financial leaders. However, for every Darfur or Zimbabwe, there are encouraging examples of political, social and economic development that should attract U.S. business in a tradition not so different from educated risk-taking in our own "Wild West" of the 1800s. Success stories include: Liberia and Sierra Leone transitioning from horrific civil wars to exemplary nascent democracies; Rwanda emerging from the genocide of the last decade to offering disciplined and keenly trained peacekeepers to the African Union; and the Democratic Republic of Congo (DRC) quickly moving toward democracy and free markets. (Many analysts say the DRC goal of developing a regional watershed by getting the world community to finance a dam project surpassing China's Three Gorges Dam is no longer a pipedream.)

This week, the Corporate Council on Africa hosts an African Infrastructure Conference in Washington, D.C. This "Davos of Africa" reflects the World Economic Forum's mantra of "engaging leaders in partnerships to shape global, regional and industry agendas."

The 19th-century satirist, Ambrose Bierce wrote, "War is God's way of teaching geography to Americans." Fortunately, America has never fought an African war. However, in conducting Africa seminars before even the most educated U.S. audiences, I find few really know African geography, history and culture. But the few African attendees seem familiar with American culture down to the current baseball or NFL standings.

Getting U.S. and African entrepreneurs, captains of industry, finance and other decision-makers together in a context that offers mutual financial reward may help belie Ambrose Bierce's observation, revealing that the continent is a diamond in the rough.

Tony Das is president and chief operating officer of Global Markets Consulting Group.