Africa needs to create 18 million jobs a year, according to the World Bank. That’s a staggering 50,000 new jobs every day. The scale of the task is gargantuan and the private sector holds the key. Africa urgently needs many, many more businesses of real scale and those businesses need exceptional management teams with energy, vision and big ambition.
That’s why the human capital challenge is one of the largest barriers to economic progress in Africa, alongside access to financial capital and access to power.
There’s a long way to go. The UK has 15,000 businesses with revenues over $50 million. Ethiopia has 17. Africa currently has approximately 90 business schools and universities providing MBA and executive training. That’s about one school for 11.2 million people. Only nine of these meet international standards – less than one percent of the world’s 950 internationally accredited business schools. India boasts over 1,500 management schools for a similar sized population.
The distribution of these schools is very uneven across the continent. Most of the top schools are in South and North Africa. Regions like West Africa are grossly underrepresented while there is no representation at all for Central Africa. Taking Ethiopia again as an example, managers make up only half of one percent of the employed workforce.
Investors deal with the fallout daily. We’ve been talking about it for years. The script is familiar. The lack of “organisation experienced” human capital is the bottleneck.
We urgently need to turn the prevailing Africa narrative on its head and find a way to move from a top-down pessimism story to a bottom-up story of opportunity and potential. We can’t wait for the management training infrastructure to develop, important as that undoubtedly is. The private equity community must start talking about and talking to the talent that exists in Africa. Just as importantly, we must leverage our networks and experience to unleash that talent and invest to build business of scale on the continent.
CDC is supporting The Africa List, a network of the continent’s most promising business talent, to help create the next generation of stellar leaders who will seize their continent’s opportunities and face down the challenges. The Africa List, which operates in DRC, Uganda, Ethiopia, Tanzania and Zambia, is creating a vibrant community of leaders across all industries and sectors. They provide workshops, masterclasses and management training and this growing network is helping Africa’s new business leaders to emerge.
Earlier this year CDC supported the London Stock Exchange Group’s Companies to Inspire Africa report. The report identified hundreds of Africa’s most dynamic companies, demonstrating enormous potential for growth and high-quality job creation. The report also highlighted the unique role of female entrepreneurship, with approximately 12 percent of companies led by female entrepreneurs. Women account for 40 percent of The Africa List’s membership.
Africa has the talent and let nobody doubt it. But if Africa’s high-growth companies are to get the support they need, and if the level of capital flowing into the continent is to rise from billions to trillions, Africa needs to nurture those talented business leaders and provide early access to larger organisations to drive the continent’s next phase of growth and development.