Putting ‘Africa rising’ under the microscope
We al l hear so much a bout t he ‘ Afr i c a rising’ narrative and the growing middle class of countries like Nigeria that have fast-increasing and young populations. They like stuff! They need stuff! Invest in the stuff they want to buy and make millions! The growing middle class will drive higher consumption of everything from pet food to white goods, so the story goes.
Up to a point, it’s true: if you’re the owner of a stake in a company that has a fried chicken franchise in Lagos, I am sure you won’t argue too much. And from the queues this week at the counter of Abuja’s new and only Domino’s Pizza on its f irst day of trading, any travelling business person would have had reason to go back to London or New York confident that ‘Africa rising’ is definitely happening and the middle class is absolutely growing.
But Africa rising demands constant interrogation. Firstly, it’s never as simple as ‘people + things = a return on your investment’, yet that’s so often the case made by the peddlers of the thesis. Just ask Nestlé. One of its senior executives told the Financial Times in June that the company was cutting its workforce in 21 African countries because it had overestimated the growth of the middle class.
Secondly, focusing on what people are using and buying (in Nigeria’s case largely from outside its borders) can overshadow what they are themselves working on in between using their washing machines or having dinner at Domino’s.
I have spent some time recently researching tech and social enterprise entrepreneurs, mainly those based in Lagos’s Yaba district, which is fast becoming the megacity’s more modest but equally ambitious answer to Silicon Valley. Granted that it doesn’t look like much at the moment and it faces daily challenges that would drive any San Franciscan mad, but this is where it’s at in terms of exciting, innovative investment in Nigeria.
Here you’ l l f i nd young people building apps that do everything from promoting ride-sharing to encouraging the celebration of Nigeria’s rich culture. Then there’s BudgIT, which is helping Nigerians understand how their money is spent by the government; no one would argue that’s a service that wasn’t needed.
Investment in start-ups like these may need more attention and care from the investor than if you just chucked a bundle of cash at an industry sector you reckon Nigerians might like, but it’s also a more interesting way to invest. It’s one that benefits not just you and fried chicken demand, but also Nigerians in parts of society other than the muchvaunted middle class. A scheme that promotes r ubbish collection – see Wecyclers for details – is a scheme that benefits the health and hygiene of Lagosians as much as it benefits stakeholders.
So yes, Africa is rising and yes, Nigerians do seem to like pizza, but ask yourself whether that’s really the best, the brightest and the most beneficial way you could be investing in the trend. Perhaps instead of what Nigeria consumes, it’s time more of us started looking at what young people in Nigeria are working so hard to produce.
Nigerians are seen at the ‘Computer Village’, the bazaar where electronic products such as mobile phones, computer hardware and accessories are sold, in the Ikeja suburb of Lagos, Nigeria earlier this year. This ‘Computer village’, which is one of Africa’s biggest computer markets, attracts locals and foreign tourists from as far afield as Ghana, Senegal and the Congo.