Financial Market Development – the opening up of a continent

Euvin Naidoo is guest blogging for the Forum. He is a Young Global Leader and the Co-President of the South African Chamber of Commerce in America. You can follow him on @euvin.

During the World Economic Forum on Africa 2009, Rwandan President Paul Kagame commented on the global financial crisis, reframing the issue of the impact of global movements in financial markets on Africa. While many commentators emphasized how Africa had emerged relatively unaffected by downturns in developed economies, President Kagame flagged that this, rather than being a relief, could actually be viewed as a cause of concern. Paraphrasing his thoughts, he shared a contrarian view – from another angle are we as Africans so irrelevant to global financial markets that when large markets are affected we remain unscathed?

He further asked whether some day we would be affected by such movements, meaning our markets are connected, integrated and engaged at a global level. As a group of Young Global Leaders, we were fortunate to engage President Kagame in 2009 for a one-on- one session to exchange ideas and hear about his vision for his country and the continent. In 2011, as we focus on the prescient theme of From Vision to Action, I remember the words of President Kagame. The challenge of developing solutions that are relevant for Africa and are set within a local and global context is paramount.  Africa needs to lead; it should not be defined externally. Change should impact the lives of those seeking peace, security, access to healthcare, clean water, food, education, employment, opportunity and access to markets.

Entering the 2011 World Economic Forum on Africa the following themes are at the top of my mind within the context of moving from idea to action in tangible and practical steps across public and private sector stakeholders:

1. The Green Revolution – Africa’s goal to feed itself, harness arable land available for agriculture
2. Access to finance by underserved markets – the missing middle (those entities too large for microfinance and currently not served effectively by many traditional financial service providers).
3. Intra-Africa trade, the importance of regional hubs. We need to not just look for international investment but should seek more cross-border engagement.
4. China and Africa – shaping the agenda. How can Africa as a block better engage to continue to build a strong and growing trade relationship?
5. Development of financial markets. What is the evolution of financial services, exchanges and products, and what is the best path to give those underserved access to capital and markets?

The next decade and chapter for Africa has the potential to be the catalyst decade so often written about. Thirty years ago investment and growth in China, India and Brazil was not a core topic of conversation at business schools. Japanese management articles dominated journals at this time. Now CHINDIA dominates the conversations of business schools, conferences and the like. The next decade has the makings of Africa emerging along this path – BRICSA is the start of this acknowledgment and formal focus on the potential; Wal-Mart and others are also casting light on opportunities as global capital seeks new growth areas. A market across the continent of 1 billion people cannot be ignored. As the focus of the world turns to opportunity in Africa, both short- and long-term partners and capital will emerge.  It is essential that these opportunities are shaped into tangible and lasting platforms for the continent and its people delivering not just a burst of development but long-term change to improve the lives of people across the continent. Taking the theme of “relevance”, President Kagame raised its ultimate conclusion, a successful region or people needs to determine and define its own relevance and not have this shaped by someone else. Innovation in Africa is key to this and Africa represents a continent that is best suited to leap-frog many areas. What mobile achieved in telecoms can be achieved in energy, education and other areas focusing on developing relevant solutions to address specific community needs. While drawing on lessons and models elsewhere, the solutions that best work are those that are relevant to the communities served. It is in this context that Africans are best suited to shape services and define what is relevant as opposed to this being defined externally.