The Rt Hon The Lord Boateng PC DL
"The development of rural Africa and the rise up the value chain of its producers offers an unparalleled opportunity"
The Rt Hon The Lord Boateng PC DL, Chairman, African Enterprise Challenge Fund
Africa is a continent of challenge and opportunity. Both are represented by its demographic reality. A fast-growing middle class with increasing spending power, plus a young and aspirant population, provide an unparalleled market opportunity. This fuels the growth of many of the companies that have inspired this welcome publication.
By 2040, Africa will be home to the world’s largest potential workforce; however, it is currently only creating three million jobs for the 10–12 million young people who join the workforce every year. And too few of these are in the agricultural sector and in rural Africa, which suffer from both an ageing workforce and uncontrolled rural flight. This gap in employment opportunity has to be filled if unemployment is not to drive instability, forced migration and an undermining of the real gains in the governance of Africa in recent years.
These gains in governance have, after all, created a more enabling environment for investment on the continent. This should pave the way for global companies to enter the African market, and for Africa’s indigenous companies to grow to scale and become global players. They will have needs that the City of London is well placed to meet.
The African Enterprise Challenge Fund (AECF), which I chair, is a pan-African multi-donor challenge fund based in Nairobi. Our focus is on the agribusiness and renewable energy sectors. We have worked with some of Africa’s most progressive and innovative entrepreneurs to create sustainable livelihoods in rural communities in 26 African countries. We have taken the African producer up the value chain by providing patient capital in the form of soft loans and grants to companies. This creates much-needed African jobs and, in so doing, as Theresa May pointed out during her trip in August 2018 to Sub-Saharan Africa, provides welcome opportunities for British business, too.
The high-growth companies funded by AECF, some of which once again have found themselves in this publication, take many forms, but all represent African excellence in an inspirational way. They vary. Some are new enterprises in emergent technical sectors like Zanful, bringing solar power to rural Zimbabwe. Others are more established businesses in the agricultural sector, such as Meru Greens, that as a result of AECF’s investment is able to expand into new markets. This brings employment opportunities where they were limited or non-existent before among marginalised communities or regions.
Our current business strategy brings a renewed emphasis on youth and a gender focused approach that seeks to utilise a too often neglected source of talent among women entrepreneurs and farmers. We work for impact that is transformative of livelihoods and catalytic within markets so that they work better for the poor.
In the past 10 years, the AECF has leveraged an additional $658m (five times leverage for each dollar invested) from the private sector into its investee companies and impacted on the lives of more than 16 million people across Africa.
Britain, Europe and Africa have a shared history and long established ties. We would, however, be unwise to be lulled by this into a false sense of complacency. This is a fast-changing world with new forces at work that are seeing new alliances formed and old ones being reconstituted. The truth remains, however, that relationships matter. They will endure when they are based on mutual understanding and advantage.
The development of rural Africa and the rise up the value chain of its producers offers an unparalleled opportunity for growth and prosperity for all.
The companies represented on these pages are the clearest illustration of that fact. The mobilisation of capital to support their growth and contribution to global trade represents our best hope for a mutually beneficial future.