Afri-capitalism: Towards a system for the many
Capitalism no longer has a rival. In Africa at the very least, an ideological war is being waged on its terrain between two competing capitalist models: the United States’ “liberal” capitalism and China’s “political” capitalism. This war is still far from being won.
And yet, these two forms of capitalism face the same problems: inequalities continue to grow within these systems and their consumption patterns are depleting the planet. Our continent is already very familiar with the damage caused by these two drawbacks. Africa has at once the greatest amount of inequality. It is home to eight of the ten countries which have the world’s highest Gini coefficients, according to the World Bank) and the most to lose from climate change according to the United Nations, temperature increases in Africa will be higher than the global mean temperature increase.
An alternative exists and it is gradually taking root here and there all over the world. Some commentators call it “capitalism for the many”. Small- and medium-sized enterprises and even a number of multinational corporations are working towards this new horizon. Their reasoning can be summarised as follows: growing inequalities, the damaging effects of climate change, the disruption of the technological revolution and the steady rise of protectionism radically undermine the idea of a capitalist system that is solely geared towards maximising profit. The African private sector cannot avoid this movement. It must grasp its necessity and seize the resulting opportunities.
Ensuring business longevity and sustainable practices, these are necessities. Rising inequalities, the stagnating middle class and a lack of skilled employment combined with the empowerment of consumers via social media represent a number of deadly risks for companies. In recent years, in Morocco, Senegal and Cameroon, devastating viral boycotts driven by social injustice and the important issue of purchasing power have successfully brought down long-established multinational corporations.
According to the Intergovernmental Panel on Climate Change (IPCC), climate change could lead to losses in Africa of between 2 and 4 percent of GDP by 2040 and between 10 and 25percent by 2100.
Opportunities abound: the fourth industrial revolution, encompassing everything from artificial intelligence to blockchain technology, offers innovative tools that will help create new business models that are more inclusive and more environmentally friendly. Already, many African start-ups and social entrepreneurs throughout the continent are outdoing one another to make up for the administrative and infrastructural delays that are holding African development back. In healthcare, start-ups are reinventing prescription drug inventory management (mPharma, Ghana) and healthcare booking (Vezeeta, Egypt). In agri-business, they are linking farmers and vendors (Twiga Foods, Kenya). In logistics, they are making critical data available to improve the efficiency of road haulage (Kobo360, Nigeria).
Other opportunities include the ultra-fast rise of renewable energy on the continent. In a dozen years, renewables have become so financially competitive that they have eroded the domination of fossil fuels. The trend is expected to continue to grow as one-by-one countries; investment funds and multilateral institutions regularly announce that they are no longer funding fossil fuel energy projects.
African companies have a crucial role to play in this new journey towards progress. On a continent where states are painfully lacking in the resources necessary to meet their obligations to citizens, the private sector has to pick up the slack for its own good and for the good of the many. For the first time, it has the opportunity to play a major transformative role on its own terms. The private sector offers Africa an unprecedented chance to leapfrog forward and leave an imprint on both itself and the world.
For all of these reasons, the Africa CEO Forum in Abidjan, the largest annual gathering of the African private sector, although postponed has chosen to devote its 8th edition to this new ambition. With “Capitalism for the many: a new horizon for the African private sector” as its theme, the forum seeks to both rouse the conscience of the private sector and communicate its needs and demands to the major institutions that form its environment. In sum, to move towards a form of Afri-capitalism that is truly for the many.
Ben Yahmed is the founder, Africa CEO Forum.