29 NOV 2024

Charting Africa’s path to global competitiveness

At a recent Leader’s Angle hosted by Stellenbosch Business School, Sim Tshabalala, CEO of Standard Bank and Honorary Professor at the Business School, joined Professor Anita Bosch in a dialogue that brought to light Africa’s unique opportunities, challenges, and the strategies required for sustainable development and global competitiveness.

The conversation revolved around transparency, youth development, gender equity, and Africa’s economic infrastructure, all underlined by Tshabalala’s vision for Africa’s collective progress.

Advocating for transparency and disciplined governance

Tshabalala’s call for greater transparency was one of the conversation’s standout points. He spoke passionately about the need for stringent governance within African institutions, advocating for risk management frameworks that discourage corruption and foster accountability. "If you’re being disciplined and working toward a vision, it's unfair to let individuals stray from that," Tshabalala asserted, emphasising that allowing such lapses ultimately compromises collective goals.

Further highlighted was the need for Africa to proactively address its own economic and regulatory shortcomings, rather than relying solely on external assessments or interventions. Tshabalala encouraged African leaders to take responsibility by improving the continent's data quality and presenting a clear narrative to rating agencies. This approach, he suggested, would better position African countries in the global market, making them more attractive to investors and lenders.

Harnessing Africa’s youth potential

Africa’s vast youth population, with its abundance of energy and potential, was another critical focus. Tshabalala noted that while youth literacy rates across Africa have risen from 67% in 2000 to 78% today, there is still much progress to be made. He called for an educational overhaul that not only raises literacy but also enhances practical skills, particularly in digitalisation and technology sectors.

"Africa's youth are our greatest asset," Tshabalala affirmed. "I envision a future where increased investment in digital infrastructure, like 5G networks, empowers young people with tools to drive economic innovation. We need to integrate "soft infrastructure" like skills training with hard infrastructure, such as improved internet connectivity, to unlock the continent's potential in sectors like fintech and business process outsourcing (BPO)."

Investing in Africa’s health and education sectors

There is an urgent need to improve Africa’s health and education systems, which are foundational to achieving sustainable development. Tshabalala underpinned the importance of equitable resource allocation to hospitals, schools, and digital facilities. By investing in both the infrastructure and the people who staff these institutions, Africa can better position itself to "leapfrog" in areas like technology, mirroring global innovation hubs.

Education, he argued, must be tailored to provide practical, industry-relevant skills, especially in fields where Africa already has a natural advantage, such as mining and engineering. Tshabalala urged African governments to develop policies that encourage local production, such as manufacturing electric vehicles using locally sourced minerals like platinum and cobalt, which would also stimulate employment and skill development on the continent.

Empowering women in leadership

On gender equality, Tshabalala and Bosch discussed how women leaders are often perceived as more risk-averse, yet their involvement is crucial for business growth. At Standard Bank, Tshabalala shared some stats and realities, women comprise 41% of senior leadership, with key roles in operations, human resources, and executive committees. The organisation has also set an ambitious goal for its board to achieve 40% female representation.

By tapping into the unique perspectives that women bring, he believes African businesses can craft customer-centric products and services that address the needs of households, where women often play significant decision-making roles. He noted that Standard Bank has designed products tailored specifically for women, such as “DADA” in Kenya and “Blue Blossom” in Nigeria, which provide banking solutions customised to women’s needs.

Towards an African credit rating agency

Addressing Africa’s financial positioning, Tshabalala spoke on the possibility of establishing an African credit rating agency. With a global market dominated by agencies based in the U.S.A (United States of America) and Europe, he explained how Africa suffers from a lack of localised understanding of credit assessments, which can result in unfavourable ratings and increased borrowing costs. The establishment of an African credit rating agency, while challenging, could mitigate this, allowing for fairer evaluations that consider Africa's unique economic landscapes and reduce reliance on foreign assessments.

Tshabalala, however, acknowledged the immense difficulty of such a project, especially given the resources required and the need for cooperation among 54 African nations. Nonetheless, he urged African leaders to provide accurate data to existing rating agencies and advocate for fair assessment methodologies that recognise Africa’s nuances. An agency rooted in Africa could also encourage greater accountability and data transparency, addressing some of the continent’s core economic challenges.

The importance of strategic patience and long-term investment

Throughout the conversation, Tshabalala emphasised the importance of patience and long-term vision in leadership. He encouraged young African professionals to take time mastering their fields and accumulating experience, rather than rushing into new roles.

His advice for Africa’s future leaders was clear: to excel, they must develop a deep-rooted understanding of their fields, seek mentorship, and embrace a patient, disciplined approach. By focusing on long-term growth over short-term gains, Africa can cultivate a generation of leaders who are well-equipped to tackle the continent’s unique challenges.

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