Business monthly (Egypt) - - INSIDE -

Over the past seven years, Qalaa Hold­ings has in­vested bil­lions of dol­lars in East Africa, fo­cus­ing on en­ergy, trans­porta­tion and lo­gis­tics. “We are now speak­ing a com­mon lan­guage,” said Hisham el Khazin­dar, the firm’s co-founder and man­ag­ing di­rec­tor and one of five pan­elists who spoke at a Jan. 22 AmCham lun­cheon ti­tled “Busi­ness in Africa: The Un­tapped Po­ten­tial.” The event co­in­cided with a del­e­ga­tion of African busi­ness lead­ers cho­sen by the In­sti­tut Choiseul, a French think tank. The lunch, held at the Four Seasons Cairo at Nile Plaza, was also hosted in co­op­er­a­tion with the Fed­er­a­tion of Egyp­tian In­dus­tries.

“I have a lot of déjà vu when­ever I visit one of these coun­tries,” said Qalaa Hold­ings Man­ag­ing Di­rec­tor Karim Sadek. “The pos­i­tive déjà vu, al­beit 15 to 20 years be­hind Egypt, is the im­pres­sive growth in a young, con­sumer-ori­ented middle class that is well ed­u­cated, well­versed with the lat­est in tech­nol­ogy and con­sumer trends.” Not­ing that many sub-Sa­ha­ran gov­ern­ments are strapped for cash, Sadek is se­lec­tively op­ti­mistic: “I con­tinue to bet on con­sumerism and the pri­vate sec­tor on the con­ti­nent and shy away from projects tied to trea­sury and gov­ern­ment.”

Ca­role Kar­iuki, CEO of Kenya Pri­vate Sec­tor Al­liance, an in­dus­try body sim­i­lar to the FEI, said that African states have to build trade and in­vest­ment in one an­other to stim­u­late growth. Cur­rently, in­tra-Africa trade ac­counts for just 10-12 per­cent of the con­ti­nent’s to­tal trade vol­ume, while trade with the Euro­pean Union is be­tween 40 and 60 per­cent. “Amer­ica and the UK are turn­ing in­ward. This is the time for Africa to also look in­wards, not as coun­tries, but as a con­ti­nent,” said Kar­iuk. “Do we al­low for­eign­ers to con­tinue to ex­ploit us, or do we ex­ploit our own re­sources for our ben­e­fit?”

In­fra­struc­ture and en­ergy are among the big­gest growth sec­tors in Sub-Sa­ha­ran Africa, noted Wael Hamdy, vice pres­i­dent-power at Elsewedy Elec­tric, who re­called how his firm had es­tab­lished fac­to­ries in Ethiopia, Ghana, Zam­bia and Nige­ria, among oth­ers. “To our sur­prise, they started suf­fer­ing from low sales be­cause, as it turned out, you can’t sell to neigh­bor­ing coun­tries,” said Hamdy. “This is the busi­ness men­tal­ity.” For in­fra­struc­ture and en­ergy in­vest­ments, the big­gest chal­lenge is fi­nanc­ing, he added. “Short-term fi­nanc­ing is there, but it’s re­ally ex­pen­sive. How­ever, medium- and long-term fi­nanc­ing is al­most non-ex­is­tent.”

IBM Egypt Gen­eral Man­ager Amr Talaat spoke about the po­ten­tial the ICT sec­tor of­fers for co­op­er­a­tion with sub-Sa­ha­ran African coun­tries. “ICT has been a ma­jor driver in economies across Africa,” he said. “A lot of African coun­tries haven’t in­vested a lot in legacy tech­nol­ogy and so are open to nascent tech­nolo­gies,” such as

mo­bile money trans­ac­tions, which have taken off at a much faster rate in parts of Sub-Sa­ha­ran Africa than they have in Egypt. The big­gest IT chal­lenge for the con­ti­nent, Talaat added, in­ad­e­quate in­ter­net ac­cess. Only 28 per­cent of Africans have on­line ac­cess, com­pared to a global av­er­age of 56 per­cent. Con­ti­nent-wide, mo­bile pen­e­tra­tion stands at 73 per­cent ver­sus the global av­er­age of 85 per­cent.

Pack­aged and frozen food is an­other un­tapped op­por­tu­nity. “Gam­bia is an ex­cel­lent ex­am­ple of achiev­ing food se­cu­rity by co­op­er­at­ing with an­other African coun­try,” said Tarek Taw­fik, head of the FEI’s Food In­dus­tries Cham­ber. He noted that The Gam­bia has some 1,000 acres ded­i­cated al­most en­tirely to potato and onion cul­ti­va­tion. Un­til 10 years ago, he said, it was im­port­ing these crops. “We con­vinced po­lit­i­cal pow­ers over there to break the lo­cal mo­nop­oly and al­low us to au­to­mate the cul­ti­va­tion and stor­age pro­cesses,” said Taw­fik. “We did it, and now they have 100-per­cent self-suf­fi­ciency in both crops.”

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