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Private sector

African opportunities in gobal crises

by Heike Bürskens, Denise Engel, Dorothe Nett
The global economic turbulence could open up opportunities for African companies to develop innovative products and strategies for sustainable economies. The same is true of climate change. In order to rise to the challenges, private-sector companies need support from governments and donors as well as a favourable business environment. [ By Heike Bürskens, Denise Engel and Dorothe Nett ]

Africa is responsible for less than three percent of global greenhouse emissions, but it will probably be the continent hit hardest by climate change. The impact will be felt in failing crops, for instance. In its latest World Development Report, the World Bank anticipates harvests to dwindle by up to 50 % in the next few years.

Climate change, moreover, is not the only threat to economies and stability in Africa. The global financial crisis is also resulting in lower incomes and slower growth.

“Africa is rich, but Africans are poor because we export wealth and import poverty,” maintains Stanley Subramoney, a manager with Price WaterHouse Coopers and member of the supervisory board of the NEPAD Business Foundation. Matters could be different, however. Volker Hauff, the chairman of Germany’s Council for Sustainable Development, believes Africa actually has an advantage over the developed nations because of the opportunity to learn from the mistakes of the rich world: “Establishing low-carbon industries will be a source of sustainable growth and prosperity.”

In view of climate change and the economic crisis, opportunities are bound to arise. African countries should prepare to develop innovative products and strategies for sustainable economies. “We must start to address climate change now; it would be muddle-headed and short-sighted to put it on hold until we have overcome the economic crisis,” says Issa Ouedraogo of the Open Society Initiative for West Africa (OSIWA). Both crises can and must be tackled together, he says.

African companies need support in order to make the most of the opportunities that arise. “Governments and donors need to build a large number of business incubators in Africa in order to support clever entrepreneurs more prudently,” a participant suggested at InWEnt’s Alumni Conference in Accra recently. This approach could lead to a healthy legal and institutional environment for innovation, investment and the creation of jobs.

In addition, to direct support from the state and the donor community, the institutional setting is indeed a key factor. This is true of small and medium-sized enterprises in particular. A lot of red tape for registration, tough requirements for credit and difficult access to technology are hurdles that matter to people who are considering to start a business.

It is important to identify one’s own opportunities and potential – in the field of renewable sources of energy, for example. Numerous studies prove that companies that are committed to the model of sustainable development are more successful than those that do not. And as successful companies are essential for the creation of jobs, training, innovation and technology transfer, InWEnt is keen on further promotion of responsible leadership.

In order to enable alumni to exchange ideas, network among one another and get in touch with experts of international reputation, InWEnt combined the Alumni Conference in Accra with the 13th International Business Forum. The IBF is a series of events that InWEnt organises in cooperation with the World Bank Institute. It dates back to the Earth Summit of 1992 in Rio de Janeiro. The motto this year was “Global Crises – African Challenges.” More than 230 InWEnt alumni as well as representatives from companies and associations, governments, international organisations, civil society initiatives and academia took part.