Transcripts For CSPAN2 Book Discussion On The Next Africa 20

[applause] aubrey has had a very distinguished career. Working on a number of projects over the years long before either of us came to the Atlantic Council and our share of stories from various friends in africa. Aubrey is managing director of the group and Investment Advisory firm where she helped to facilitate 2 billion investments in capital flows to africa. She has worked with numerous fortune 500 companies. Shes also been recognized by diplomatidiplomati c career magazine as one of the top 99 foreignpolicy leaders under 33 from washington and i wont say when that honor occurred. Aubrey, very much delighted to host the occasion here at the Atlantic Council. Following a presentation we are delighted to have Lesley Wroughton commented state Department Correspondent to moderate the discussion. We are grateful to leslie for being on this several days where anyone associated with the state department is that reporting on the journalistic senator spinning on the other side deal on the Iran Nuclear Deal that shed make time for us here at the Atlantic Council on this topic which has a native of south africa is her clothes and a passionate interest. Thank you very much for joining us. Without further ado, the people you came here to listen to comment jake and aubrey. [applause] can everyone hear us . Thank you, peter. Its a real pleasure to be here. Obviously a home for me and a home by proxy for jake. Thank you to all of you for coming today to spend the afternoon in a few minutes with us. So many of you have been part of the experience of doing business in africa and reduce yourselves and doing many innovative things but also some for a long time. We are honored to be here and its a special day for us. This is the washington launch of the book family came from stamford disco commenting a little bit of a different culture. We were wearing suits there. With that, we wanted to give a few minutes of overview of our book to frame the conversations we will have on the panel in a few minutes. One of the race and won a star to say why did the right this boat. Jake and i felt compelled to write to expand the audience that those doing business in africa because for a long time many of us in washington thought weve been talking in the same people for years and years and now its time to reach a broader audience. At the same time they become frustrated with africa in the general globally. For those of you who see it on Power Investment was a report with the infrastructure and of course all we know is energy and infrastructure. It motivated us to write something ourselves. Standing before you today and everyday are clearly nonafrican and we are also very aware and we wrote in our conversations that we believe we have spent a lot of time on the continent and into our perspective speed intermediaries in many situations in many transactions a listening and spending an enormous amount of time and others to capture those voices in this profile to see. We get hundreds of interviews on the compilation you see there. We know africa is not a country. We believe there is cost cutting trends of writing a book from a continental mainly about kenya, nigeria and larger markets of the region. But it is about the continent. We also believe there is a centrality to nigeria to this story. Given its size and its population but economically on a chair because of a fellow weather for the con as a whole. 200 million is doubling to 400 million very soon. The main thesis that come away with the book is essentially missed the normalization and its all face are all that but the pundits pendulum is not going to be always after apocalypse are a mixed bag for you have billionaires emerging at the same time people risking their lives to make it to europe across the mediterranean and those things will exist sidebyside the same way we have really inherited a Homeless Population in the same d. C. Area. It is that normalization of the discussion and truly we believe on a net basis for positives are outweighed the right now. So we will give a thought to the buzz thats been around africa. Many of you are familiar with it so i wont spend a lot of time here. It is a wrote the story. The growth rates of 6 over the last decade, and a wise averaging. We did a quick tally ourselves on google had and we saw google has increased some search terms like africa and business, africa and investments in africa intact increased over 1000 . If you look at africa intact prior to 2011 there were only a couple dozen google hits before that. We really do see there is a buzz. We now see how that manifests in some real way. Getting to the bus, we packed up a little bit and started to ask somebody can explain why africa. Why is there this buzz. Why have all these Consulting Firm since 2010, almost every major forwardlooking Consulting Firm has done some report on africas Consumer Market and we explain that in detail in the book is also come with a preframework to explain why theres all this interest in africa and connecting strongly to business which had a big disassociation before an transformation. You hear frequently africa and transformation in the basic framework we came up with is the growth story. This is old news to some, new news to others, but basically since 2010 there is a big time in the economist ran a story showing a chair with africas economy and the region exceeding china for africas growth story, meaning the growth of several weak economies being higher than many other in the world is continued to expand since 2010 and coming off the Great Recession worry what looking at a world with a lot of growth and booming markets anywhere, that got a lot of Business Ceos attention to previously werent looking at africa. Growth is one driver of the next africa and some in that will get peoples attention. The next one is investment. A lot of things as you look at five years ago we looked at a lot of things that were happening five years ago that happening and double and triple now. Theres a huge surge of investment in africa. A Foreign Direct Investment with 55 last year. Portfolio investments for stocks and bonds and you also have diaspora from this, which is a big flow of investment meaning money that your african immigrants at Goldman Sachs are driving a taxi or sending home to relatives. Investment is searching and theres a lot asked about with a lot of peoples attention. The next one is demographics. We go into detail in the book but basically when you look at Global Demographic trends across all the major ones come you come back to africa. You cant get away from the numbers. Fastest growing middle class, doubling one of the populations in the world. You have this huge demographic movement and finally there is a big push for modernization. Africa has one with the early dilapidated structures in the world but thats a huge opportunity. Its a huge mobilization of resources that upgrade the infrastructure and that includes roads, housing, schools, you name it. Those are the things that get peoples attention in the Business World about africa. So one of the reasons we went with the the next africa as opposed to the african miracle was we believe this is a work in progress. Theyre assisting differences from what was called the old africa but the transformation is not complete. No one gets off the plane in toto or rwanda and angola and think this is a miracle when its over. This is a transformation underway. Without further contrast some of the things we saw from the old africa for many of you have done business for decades now has shifted over time. One of the things that has always struck me as in 2007 i took a group of about seven area finance ministers and trade ministers to california and we went to google headquarters on the wrist in a manner any of you done there, there is a giant globe and the globe has every google hate in the world at that moment shone out by a life. What you see because of that, you see the outlines of the country and each country is a different color. We all stood there and it rotates and we waited there for it to rotate towards africa is no africa. It was missing on the globe. We were all stunned. It was because they were so few at that time on a daily basis that it looked like a couple islands. It caught my attention that it was indicative of the world africa was stuck and at that point which i call it less than 3 world. Less than 3 global trade, less than 3 private equities, google hits, whatever metric you use come africa with less than 3 . So what we are finally seeing an the next africa it is breaking out of 3 especially on the investment piece. That is the contrast weve seen. We have seen a shift away from unilateral, simple trade patterns where things are being imported in, exported raw goods out, shifting away to more complex and diverse economy and the unique dimensional Foreign Relations to shift it away from just a colonial power to the african country into a world for african countries have a choice in partners, whether the turkish invested in ethiopia, resilience, angola, malaysians in tanzania have a range of partners in the corporate and political fears. We see a significant shift in that area. Some old comparisons we dug into in the book. Old africa dependent on foreign aid. Next africa you see a large number of africans in the shared and more so in the Public Sector taking charge of African Development agenda. On the private sector side, aubrey and i spoke to all the major figures but these icons in people to collect the gates and rockefellers. Tony linda lou, they are starting for billions of dollars and they address these things left to ngos recommend nation. Other comparison is governing as the main source for wealth creation. That is changing. The pie is expanding and the number of people is growing him a lot of it has to do with entrepreneurs and business leaders. The other thing we noted is a huge surge winning diaspora entrepreneurs say they are directing businesses next to africa are returning to africa from the u. S. After having worked in the air here. Another thing we picked up on this match is diaspora entrepreneurs. Africa is showing a draw for professional class across the world. We noticed not only is it bringing back african entrepreneurs, it is pretty much printers that wouldve worked in Big Companies anywhere and that shows reversal of brain drain and a lot of that in the tech sector. We covered a lot in this boat. We have 12 chapters in three sections and these are examples of numbers and data and personal examples were important to us. We try to melt the two together effectively. Just some quick numbers, it is starting to fill the void of the informal economy is formalized. We tried to build of numbers. You know, we found about 200 innovation hugs basically and business incubators popping up. Tenure, the president made this a is probably the best known. We came up the number for 3500 startups and we worked with tech crunch to come up with a number of how much is how much has gone into startup mvr estimating the less than 3 world talks about is now reaching a lot of that with stocks and bonds in a normalization investment is now easier for individuals to buy african stocks and bonds. Theres been more sovereign bonds issued in the last couple of years and over the last seven. We see a big surge in africa surge in africas global influence following africas creative industry. In nigeria it was recently quantified the Creative Industries are worth 5 billion some of those are now making their way back to diaspora. Communities embedded in europe in the u. S. That is another trend. Finally coming u. S. Influence. African immigrants are becoming influential in the u. S. They are not the number one educated group in the country by any demographic by a recent census study. An example of that is someone we interviewed for the book for every spring new york and d. C. Have newspaper stories of african immigrant kids who come out of high school and get accepted into every ivy league school. Just to conclude before we start our panel, we feel very optimistic are not blind to the down side and situation emerging in some areas of Northern Nigeria with vocal around security issues, migration in terms of the mediterranean and other challenges hated the consummate in specific countries. We have looked at that in bath. We have what could derail african growth that we dont believe that prosperity will be distributed easily. Others languish behind. A lot of has to do with institutions, geography and other factors. We really are having a nuanced appeal of the book and youll see that. We believe the overall the big surge forward we will continue to see headlines about billions invested, new ipos, nature and just doing popup restaurants in the u. S. Fashion designers, more africans shortlisted for the booker prize in literature this year than ever before in those things are indicative of what we will continue to see. We believe that phenomenon of normalizing the relationship with africa will make a deeper relationship between the u. S. And africa in particular. Her final line is in the future. We see americans are likely to have african stocks in their 401 k s, tobias itunes or watch nigerian movies on netflix, to work at a company that does business in africa and learn more names than Nelson Mandela and barack obama. With that, would love to set up on the panel. [inaudible conversations] good afternoon and welcome, everybody. Wonderful to see a full house. Looks like standing room only back there. He just made the introductions over here, but i also want to introduce you to eghosa omoigui. Did i say that right . Who is the founder of partners, Venture Capital here we go. Venture capital thinking Silicon Valley with underserved emerging markets and indicted to hear all about what you have to tell us about. This morning i woke up and i saw a reuters article. Starbucks to enter Subsaharan Africa next year. Are they not play to the market . The kenyans taking them off the market. And then i read a quote. The Coffee Market is vibrant and we want to be part of their growth. That is exactly what the african story is. Let me start with an important one, which is basically the shift that we have seen nigeria becoming the largest african economy. What does the shift mean and members, always a translation into real economic power. Does this mean anything in africa . It does mean a lot for companies to the region. Historically u. S. Companies went going to africa saw south africa kind of the only gateway and so many of them had set up headquarters in johannesburg and were using that as a kind of staging point for their growth. Many of them found growth to be slower in the region starting from another part and a kind of grew to the most neighboring countries, botswana, mozambique, but often didnt make it as thoroughly or deeply into the other markets. You do have with the shift of nigeria and the public mind becoming bigger with the gdp over a hundred billion dollars economy and essentially you have come me thinking maybe i dont need to set up shop right away in south africa and although straight into lagos. There is a shift in Corporate Strategy and it comes to market entry in response to that. Is a nigerian, do you feel that shift . Have you wondered why everybody is looking at Southern Africa for an entry point . For Technology Investments and part of what we figure out our companies and africa has been an intriguing continent and card because the South African the South African stories such as easy story to tell. The real market after the above water and below water. Cozaar much more interesting that ive discovered demand and i think nigeria has certified it serve in as one of the tapes. Overall, one is going to be the fourth largest country in 2050. These investors and strategic suit the do you want to sort of play today. We are going to go read and work with the market. The market is tough. But the winners were the real winners and they think its always full of. The question is they got started coming to the game late. Should they be looking at this . That is a tough question. To take away that so Many Companies are coming to the game and coming to the game at all who werent even showing up. They didnt even care, hot ticket or want to watch the First Quarter before. Just an anecdotal example when we started looking at doing this book. In 2009 from 20,000, there werent a lot of people connecting africa and the business. We did this story the book about how aubrey being a consultant they did that in d. C. , prior to 2010 shootout like the lonely repair person and washington compared to other people. There used to be and africa and there were so few of them. Over the last couple of years, aubrey and i were engaged in this. We got to the point where we are people trying to follow this and we have not been able to follow the deal flow of the Companies Looking to come expanding come is starting to engage africa and global companies. Another signal of how things change in terms of the investment thesis as we started talking about africa intact because it got a lot of attention for a lot of social ventures. When will we have a set of com aligned business focus start up my first started talking about this a couple years ago and appeared it was when the question of things we see in the u. S. Like accents, ipos, they got positions. We moved a long way from air for the last talks we had a serious note if any more. It is wine. You have a quote like these things are coming. There is a massive shift and its happened so quickly its been hard for us people who follow this all the time to grasp at all. One of the Atlantic Council<\/a> and our share of stories from various friends in africa. Aubrey is managing director of the group and Investment Advisory<\/a> firm where she helped to facilitate 2 billion investments in capital flows to africa. She has worked with numerous fortune 500 companies. Shes also been recognized by diplomatidiplomati c career magazine as one of the top 99 foreignpolicy leaders under 33 from washington and i wont say when that honor occurred. Aubrey, very much delighted to host the occasion here at the Atlantic Council<\/a>. Following a presentation we are delighted to have Lesley Wroughton<\/a> commented state Department Correspondent<\/a> to moderate the discussion. We are grateful to leslie for being on this several days where anyone associated with the state department is that reporting on the journalistic senator spinning on the other side deal on the Iran Nuclear Deal<\/a> that shed make time for us here at the Atlantic Council<\/a> on this topic which has a native of south africa is her clothes and a passionate interest. Thank you very much for joining us. Without further ado, the people you came here to listen to comment jake and aubrey. [applause] can everyone hear us . Thank you, peter. Its a real pleasure to be here. Obviously a home for me and a home by proxy for jake. Thank you to all of you for coming today to spend the afternoon in a few minutes with us. So many of you have been part of the experience of doing business in africa and reduce yourselves and doing many innovative things but also some for a long time. We are honored to be here and its a special day for us. This is the washington launch of the book family came from stamford disco commenting a little bit of a different culture. We were wearing suits there. With that, we wanted to give a few minutes of overview of our book to frame the conversations we will have on the panel in a few minutes. One of the race and won a star to say why did the right this boat. Jake and i felt compelled to write to expand the audience that those doing business in africa because for a long time many of us in washington thought weve been talking in the same people for years and years and now its time to reach a broader audience. At the same time they become frustrated with africa in the general globally. For those of you who see it on Power Investment<\/a> was a report with the infrastructure and of course all we know is energy and infrastructure. It motivated us to write something ourselves. Standing before you today and everyday are clearly nonafrican and we are also very aware and we wrote in our conversations that we believe we have spent a lot of time on the continent and into our perspective speed intermediaries in many situations in many transactions a listening and spending an enormous amount of time and others to capture those voices in this profile to see. We get hundreds of interviews on the compilation you see there. We know africa is not a country. We believe there is cost cutting trends of writing a book from a continental mainly about kenya, nigeria and larger markets of the region. But it is about the continent. We also believe there is a centrality to nigeria to this story. Given its size and its population but economically on a chair because of a fellow weather for the con as a whole. 200 million is doubling to 400 million very soon. The main thesis that come away with the book is essentially missed the normalization and its all face are all that but the pundits pendulum is not going to be always after apocalypse are a mixed bag for you have billionaires emerging at the same time people risking their lives to make it to europe across the mediterranean and those things will exist sidebyside the same way we have really inherited a Homeless Population<\/a> in the same d. C. Area. It is that normalization of the discussion and truly we believe on a net basis for positives are outweighed the right now. So we will give a thought to the buzz thats been around africa. Many of you are familiar with it so i wont spend a lot of time here. It is a wrote the story. The growth rates of 6 over the last decade, and a wise averaging. We did a quick tally ourselves on google had and we saw google has increased some search terms like africa and business, africa and investments in africa intact increased over 1000 . If you look at africa intact prior to 2011 there were only a couple dozen google hits before that. We really do see there is a buzz. We now see how that manifests in some real way. Getting to the bus, we packed up a little bit and started to ask somebody can explain why africa. Why is there this buzz. Why have all these Consulting Firm<\/a> since 2010, almost every major forwardlooking Consulting Firm<\/a> has done some report on africas Consumer Market<\/a> and we explain that in detail in the book is also come with a preframework to explain why theres all this interest in africa and connecting strongly to business which had a big disassociation before an transformation. You hear frequently africa and transformation in the basic framework we came up with is the growth story. This is old news to some, new news to others, but basically since 2010 there is a big time in the economist ran a story showing a chair with africas economy and the region exceeding china for africas growth story, meaning the growth of several weak economies being higher than many other in the world is continued to expand since 2010 and coming off the Great Recession<\/a> worry what looking at a world with a lot of growth and booming markets anywhere, that got a lot of Business Ceos<\/a> attention to previously werent looking at africa. Growth is one driver of the next africa and some in that will get peoples attention. The next one is investment. A lot of things as you look at five years ago we looked at a lot of things that were happening five years ago that happening and double and triple now. Theres a huge surge of investment in africa. A Foreign Direct Investment<\/a> with 55 last year. Portfolio investments for stocks and bonds and you also have diaspora from this, which is a big flow of investment meaning money that your african immigrants at Goldman Sachs<\/a> are driving a taxi or sending home to relatives. Investment is searching and theres a lot asked about with a lot of peoples attention. The next one is demographics. We go into detail in the book but basically when you look at Global Demographic<\/a> trends across all the major ones come you come back to africa. You cant get away from the numbers. Fastest growing middle class, doubling one of the populations in the world. You have this huge demographic movement and finally there is a big push for modernization. Africa has one with the early dilapidated structures in the world but thats a huge opportunity. Its a huge mobilization of resources that upgrade the infrastructure and that includes roads, housing, schools, you name it. Those are the things that get peoples attention in the Business World<\/a> about africa. So one of the reasons we went with the the next africa as opposed to the african miracle was we believe this is a work in progress. Theyre assisting differences from what was called the old africa but the transformation is not complete. No one gets off the plane in toto or rwanda and angola and think this is a miracle when its over. This is a transformation underway. Without further contrast some of the things we saw from the old africa for many of you have done business for decades now has shifted over time. One of the things that has always struck me as in 2007 i took a group of about seven area finance ministers and trade ministers to california and we went to google headquarters on the wrist in a manner any of you done there, there is a giant globe and the globe has every google hate in the world at that moment shone out by a life. What you see because of that, you see the outlines of the country and each country is a different color. We all stood there and it rotates and we waited there for it to rotate towards africa is no africa. It was missing on the globe. We were all stunned. It was because they were so few at that time on a daily basis that it looked like a couple islands. It caught my attention that it was indicative of the world africa was stuck and at that point which i call it less than 3 world. Less than 3 global trade, less than 3 private equities, google hits, whatever metric you use come africa with less than 3 . So what we are finally seeing an the next africa it is breaking out of 3 especially on the investment piece. That is the contrast weve seen. We have seen a shift away from unilateral, simple trade patterns where things are being imported in, exported raw goods out, shifting away to more complex and diverse economy and the unique dimensional Foreign Relations<\/a> to shift it away from just a colonial power to the african country into a world for african countries have a choice in partners, whether the turkish invested in ethiopia, resilience, angola, malaysians in tanzania have a range of partners in the corporate and political fears. We see a significant shift in that area. Some old comparisons we dug into in the book. Old africa dependent on foreign aid. Next africa you see a large number of africans in the shared and more so in the Public Sector<\/a> taking charge of African Development<\/a> agenda. On the private sector side, aubrey and i spoke to all the major figures but these icons in people to collect the gates and rockefellers. Tony linda lou, they are starting for billions of dollars and they address these things left to ngos recommend nation. Other comparison is governing as the main source for wealth creation. That is changing. The pie is expanding and the number of people is growing him a lot of it has to do with entrepreneurs and business leaders. The other thing we noted is a huge surge winning diaspora entrepreneurs say they are directing businesses next to africa are returning to africa from the u. S. After having worked in the air here. Another thing we picked up on this match is diaspora entrepreneurs. Africa is showing a draw for professional class across the world. We noticed not only is it bringing back african entrepreneurs, it is pretty much printers that wouldve worked in Big Companies<\/a> anywhere and that shows reversal of brain drain and a lot of that in the tech sector. We covered a lot in this boat. We have 12 chapters in three sections and these are examples of numbers and data and personal examples were important to us. We try to melt the two together effectively. Just some quick numbers, it is starting to fill the void of the informal economy is formalized. We tried to build of numbers. You know, we found about 200 innovation hugs basically and business incubators popping up. Tenure, the president made this a is probably the best known. We came up the number for 3500 startups and we worked with tech crunch to come up with a number of how much is how much has gone into startup mvr estimating the less than 3 world talks about is now reaching a lot of that with stocks and bonds in a normalization investment is now easier for individuals to buy african stocks and bonds. Theres been more sovereign bonds issued in the last couple of years and over the last seven. We see a big surge in africa surge in africas global influence following africas creative industry. In nigeria it was recently quantified the Creative Industries<\/a> are worth 5 billion some of those are now making their way back to diaspora. Communities embedded in europe in the u. S. That is another trend. Finally coming u. S. Influence. African immigrants are becoming influential in the u. S. They are not the number one educated group in the country by any demographic by a recent census study. An example of that is someone we interviewed for the book for every spring new york and d. C. Have newspaper stories of african immigrant kids who come out of high school and get accepted into every ivy league school. Just to conclude before we start our panel, we feel very optimistic are not blind to the down side and situation emerging in some areas of Northern Nigeria<\/a> with vocal around security issues, migration in terms of the mediterranean and other challenges hated the consummate in specific countries. We have looked at that in bath. We have what could derail african growth that we dont believe that prosperity will be distributed easily. Others languish behind. A lot of has to do with institutions, geography and other factors. We really are having a nuanced appeal of the book and youll see that. We believe the overall the big surge forward we will continue to see headlines about billions invested, new ipos, nature and just doing popup restaurants in the u. S. Fashion designers, more africans shortlisted for the booker prize in literature this year than ever before in those things are indicative of what we will continue to see. We believe that phenomenon of normalizing the relationship with africa will make a deeper relationship between the u. S. And africa in particular. Her final line is in the future. We see americans are likely to have african stocks in their 401 k s, tobias itunes or watch nigerian movies on netflix, to work at a company that does business in africa and learn more names than Nelson Mandela<\/a> and barack obama. With that, would love to set up on the panel. [inaudible conversations] good afternoon and welcome, everybody. Wonderful to see a full house. Looks like standing room only back there. He just made the introductions over here, but i also want to introduce you to eghosa omoigui. Did i say that right . Who is the founder of partners, Venture Capital<\/a> here we go. Venture capital thinking Silicon Valley<\/a> with underserved emerging markets and indicted to hear all about what you have to tell us about. This morning i woke up and i saw a reuters article. Starbucks to enter Subsaharan Africa<\/a> next year. Are they not play to the market . The kenyans taking them off the market. And then i read a quote. The Coffee Market<\/a> is vibrant and we want to be part of their growth. That is exactly what the african story is. Let me start with an important one, which is basically the shift that we have seen nigeria becoming the largest african economy. What does the shift mean and members, always a translation into real economic power. Does this mean anything in africa . It does mean a lot for companies to the region. Historically u. S. Companies went going to africa saw south africa kind of the only gateway and so many of them had set up headquarters in johannesburg and were using that as a kind of staging point for their growth. Many of them found growth to be slower in the region starting from another part and a kind of grew to the most neighboring countries, botswana, mozambique, but often didnt make it as thoroughly or deeply into the other markets. You do have with the shift of nigeria and the public mind becoming bigger with the gdp over a hundred billion dollars economy and essentially you have come me thinking maybe i dont need to set up shop right away in south africa and although straight into lagos. There is a shift in Corporate Strategy<\/a> and it comes to market entry in response to that. Is a nigerian, do you feel that shift . Have you wondered why everybody is looking at Southern Africa<\/a> for an entry point . For Technology Investments<\/a> and part of what we figure out our companies and africa has been an intriguing continent and card because the South African<\/a> the South African<\/a> stories such as easy story to tell. The real market after the above water and below water. Cozaar much more interesting that ive discovered demand and i think nigeria has certified it serve in as one of the tapes. Overall, one is going to be the fourth largest country in 2050. These investors and strategic suit the do you want to sort of play today. We are going to go read and work with the market. The market is tough. But the winners were the real winners and they think its always full of. The question is they got started coming to the game late. Should they be looking at this . That is a tough question. To take away that so Many Companies<\/a> are coming to the game and coming to the game at all who werent even showing up. They didnt even care, hot ticket or want to watch the First Quarter<\/a> before. Just an anecdotal example when we started looking at doing this book. In 2009 from 20,000, there werent a lot of people connecting africa and the business. We did this story the book about how aubrey being a consultant they did that in d. C. , prior to 2010 shootout like the lonely repair person and washington compared to other people. There used to be and africa and there were so few of them. Over the last couple of years, aubrey and i were engaged in this. We got to the point where we are people trying to follow this and we have not been able to follow the deal flow of the Companies Looking<\/a> to come expanding come is starting to engage africa and global companies. Another signal of how things change in terms of the investment thesis as we started talking about africa intact because it got a lot of attention for a lot of social ventures. When will we have a set of com aligned business focus start up my first started talking about this a couple years ago and appeared it was when the question of things we see in the u. S. Like accents, ipos, they got positions. We moved a long way from air for the last talks we had a serious note if any more. It is wine. You have a quote like these things are coming. There is a massive shift and its happened so quickly its been hard for us people who follow this all the time to grasp at all. One of the Big Questions<\/a> is whether companies can go or whether they really need to tie up with an African Company<\/a> who knows the lay of the land that knows how to basically navigate their way through. Absolutely local partners are critical. The dialogue around African Business<\/a> strategy is unfortunately sometimes dominated by concern over headline risk. Political and security at types of issues. But the real risk that needs to be addressed his counterpart at risk, meaning who are you working with and without focus is very, very important. Choosing your partners wisely is the first step on the road to success. I was recently speaking on a panel with the airbrush group, the private equity fund than they were saying that they did a study of their investment in tunisia and they looked at their investment and invested in consumer Grade Companies<\/a> and i looked at them before the arab spring in tunisia, during the tumultuous right time and after everything settled down and they found no difference in the performance of their companies but the actual headline risk is almost no impact on the consumer growth story in tunisia. That is analogous to what we see in the market. Not necessarily as much concerned as workers put to have nine risks. How we see you were in the states in the went back home. Did you know how tough it was going to be and how easy was it to break into the market and how easy is it to stay in there . This is a 10 year plan and i think anything that has to do with africa is to be a strategic plan. Maybe 20. The original plan to go back to africa to south investment for recognizing it was not ready. My choice was to learn from a similar emergingmarket. I started doing it. My thesis was africa was five years behind which put me in 23rd team so its right there. But i think as a firm, going back was a process. The jet lag is brutal. Investing before we started investing. A lot of that was trying to get people to understand what we did looking for the entrepreneurs, teaching them how to do things for matches Company Building<\/a> but the importance of culture and branding, thinking about the borderless market and give them that page. How do you pitch her company to an investor. We did that for several years. And of course you know, you are the lake to leverage for the new car you know, you continue with the orange purgatory spare that are so driven. It is really incredible. I think he talked a little bit about it earlier. We had this joke in our firm do we think it would be lost because its so easy here. But how can i incorporate 30 minutes. That makes no sense. [inaudible] these entrepreneurs have a better sense for democracy. So what i found that worked for me was a combination of vocals. Nigerias right now we have one recount. Never went to school anywhere else. One is a u. S. Team led dividend completely trained on the internet, completely selftaught. When you see the drive and desire to win, but theres so much risk. In the very beginning, Everyone Wants<\/a> to be confident. You dont have to be Big Companies<\/a> until you start small. The work is to teach old how to build a system that is collaborative. One of the areas you look as you looked east as an example. He decided you were going to take on the issue much about china which i thought was interesting certainly in washington you dont have a conversation. Why did she take that decision . It comes from one of our founding premises which i mentioned earlier in the presentation which we believed africa is a choice of many art cars in the accession of china and washington and london and theres whole institution is studying to china, africa and access. But truly the more important part is their choice of partners. I also think a lot of the concerns are misconstrued. Its always about chinas investment in africa and the Word Investment<\/a> i have trouble with some times because the majority of the capital flows coming from china into africa are supporting Chinese Companies<\/a> to build infrastructure. So it is almost perpetuating the construction boom in china externally and away and they dont own or manage the project, the railroads, once they are built to give them to the government and the governments actually borrow from china for those. So that piece of it is a bilateral kind of government to government and after that i think by putting it in the rubric of private sector investment. For those reasons we didnt spend a lot of time on it in the boat. Interesting. I will open it up for questions because i am sure you have lots. If you can look at the whole issue of last year at the african summit, there is no mention of aid during the summit at all. Some people think that is wrong, do you still have to discuss areas of development in africa that need aid and can only be a bad investment. What do you make of that . I dont think our view is to disagree with that. Similar to china, we also decided we were not going to make the book and ebook, e. Versus trade. When you take and try chapters, it is pretty clear where we stand on the power of investment and mark is to bring about certain positive trends more so than a pass. But we didnt have a lot of time focusing on it. One of the things we said up front and is buried port for us to have a valid. You know, we are not save africas problems are going to go away. Fact, we try to make a comparison that we get to a point or cost cutting trends will lead the confidence progress to overshadow problems but we are very clear the problems will persist and they will continue to persist in an addin flow pattern like they do anywhere else in the world here for some reason people think africa is a straight up or down proposition. See their africa rising the african apocalypse and have to fall in one side the other. Dissenting humanitarian issues, socioeconomic challenges. As we point out, we think these trends we talk about, monumental shift in economies of demographics and the leadership starting to emerge across the African Diaspora<\/a> and on the continent itself is going to lead to a lesser prominence of aid as a necessity in africa. It will also lead to a lesser influence of outsiders having such a dominant role socioeconomic events on the continent. When president obama goes to kenya, what should he be telling africa about americas interest in the continent . I think it is the equation that he is going, you know, in conjunction because i think entrepreneurship is sealed for the continent. I think what he should talk about his government, the policymakers, should really focus on empowering these entrepreneurs. The mentorship is completely missing in action, so that is one thing that needs to change our cross pollinate the knowledge first before we focus on dollars. These are the people of the continent want to learn. Theyll want to do better. They all aspire. They are no different than us here. Giving them the tools to do that will be very important in the top about this a lot about the program and one of the key issues ive seen is a disgrace so long as it is targeted and measured can you configure a course correct if necessary and that means you have to put in the skill sets to do that. I think the continent to have a few more years to be recipients of the pieces and that is okay because nobody ever gets anywhere without help. But i think what president obama will talk about is how we can get out of the way. One more thing quickly we talk about in the book is also a lot of things used to be kind of laughed to the aid. And some other areas of the challenges will become commercial propositions. No longer left to aid agencies. When you look into what ibm is doing in the Research Center<\/a> and deploying the built in the same africa which is a version of what a and one of the titles is to take on africas longstanding challenges is a shift we think in a direction of some of africas problems connect it with a solution will become commercial opportunities in the future. I will say with this book, and this book coming out on something something critical about the deal and the companies you talk about it never hurt us. Thats pretty amazing. Thats the reason i was advised to get the book. Lets keep the questions very short and are not long statements or pounding on a philosophy. Can i have a gentleman from the back here. Thank you. My question is the recent investment in africa and Different Countries<\/a> that have been investing in africa. For example, turkey. This is very challenging to compete with those different types of of their campaigns. So how challenging for American Companies<\/a> to break and then when you go to these parts, you dont hear about american investments, do you . We need to acknowledge these, too. One, the u. S. Is still one of the largest investors in african countries. I think the most recent shows have surged ahead to become last year the highest investor. Procter gamble allowed put about half a billion dollars into manufacturing facilities, one in south africa, one in nigeria. Said they are there but i would say we do face competitive challenges and some of those challenges are purely they stem from operating in developed markets for so long. Its just like if we only got the window and think that the rest of the world lives like we do, we actually are abnormal for the rest of the world. Traffic, the way the urban cities of the world operate is very different than the developing world. So when i see companies struggling with the developed market mindset. They are static and work in the way theyve always worked and one of the advantages if its not hard for them to do the ends because they have villages in their own countries. So they are used in the throes of messiness of rapid development. We were used to that in the 1890s. Its been a while. We were talking about how you cant have a company in south africa without having at least not one, but too just in case it breaks down. Can you talk about the challenges . Share, where do i start. But on the high marriage partners, but theres also the middle challenges and durability to power through the winners from the losers. The question was a good one because when you start to think about it, some of the companies coming from Different Countries<\/a> are funded in unique ways. They have Balance Sheet<\/a> numbers and Balance Sheet<\/a>s support. An American Company<\/a> to compete alone as coming including the rules are a little bit different. It is tough. You have to really focus on your product. How do i incorporate this company and what lessons do i need to do. This attack Service Going<\/a> to change the rules tomorrow. Foreign exchange volatility. Next week is 240. You have an order and someone saying their cost is achieved by 30 . Its brutal to compete when youre dealing with that. The entrepreneurs are built different. They are built to win and these are just they continue. Whereas, is said to ourselves, this entrepreneurs, some of them dont they. Some of them dont speak the queens english. And you know, they look and feel like youre used to. So you know what you can bring. You bring the money. To bring the mentorship. I think we see that over and over again and that sort can i do. We hope more people get involved and take some significant risk anyway. This company is located generators for the future. Africas challenges changing roles because you cant change the rules. Investors dont like that. So that is one of the challenges for policymakers no pun intended, i echo that. It is very important to have that certainty and i think most entrepreneurs are beside. At the certainty of process. Here the congress cannot gfp expire. Companies dont now, but they generally know how to engage with congress and how to engage and understand getting their voices heard. Where it breaks down often in some african countries is not clear about the process who makes that decision. The issue is who makes the decision, where is that coming around, when can we have our voices heard. Its not necessarily the policy itself. Tumor questions because they been given a fiveminute light. Dave wrote me with Africa Business<\/a> magazine. I want to touch on two things to mention. One is framing and the second is starbucks. We in america been led to believe that africa is a continent where we need to supply food and diet aid narrative is strong in the last 40 years and even now it imports 50 million worth of food. Were the ideal conditions for farming, that is washington d. C. Importing lobbies. So how do we change the narrative to tell American Companies<\/a> about the Investment Opportunities<\/a> and starbucks. In a tops starbucks pays cooperatives 30 cents to 40 cents per pound like a broker for copying retail for the united states. For the other side, how do we ensure our take steps. Good question. So im the first one, i think we are starting to see more interest in accra business investment. Part of that is coming from a larger market view in terms of the consumer class, the ata you dont have to invest in agriculture to export out. There is enough of a consuming class that is going to buy the food right there. I have been recently talking to several private equity funds that are very interested in agricultural investment. I think the risk profile, especially growing is that it does come into tenure issues in Land Availability<\/a> issues where it can break down. I tend to find more investors are interested but dont necessarily want to do the hard work of going upstream. But hopefully if there is the pulling demand we will see more. Can we have the woman over there. Francis harden. One of the questions i want to ask you is about whats always been a daunting challenge anothers corruption. The need for bribes and all that sort of thing has been a very offputting to many western investors. What is the situation now . One of the big challenges i will start up with how we do it. I will talk a little bit about how to inculcate the culture, the importance of culture in young companies. We start back from very beginning with diligence. The sep style dividends and questionnaires attached to the agreement. We spend a couple of hours just talking about how to do business. We understand in some cases many obstacles that show up and they entrepreneurs are really about trying to figure out who in these ministries understand what theyre doing. Usually you can find one or two people who would do it for the right reasons and not for the wrong reasons. I dont want to be naive about it. You will keep running into this. Ive done business in asia, china, india, korea and japan. Those are places of rails go. Its not because of the unique thing to africa. A lot of it is making sure you can find the right people and be a collect of investment. If you are afraid of corruption and that is what is holding you back, i think in many cases should include this line. I think i can connect a response to your question also the second half of the gentlemans question here about what we should do with a dead to assuring fair wages. I think my response to the first part was what we should do to bring fair labor standards are higher wages to starbucks activity in africa. Im not sure it is for us to do. One of the things we talk about in the book is the transit talk about in a rising middle class about increased political involvement, those things come with greater investment with people having more upward mobility is. You see the rise of an African Society<\/a> take on those issues themselves and demand some of those things that ties into corruption, too. As Greater Transparency<\/a> of attack and a lot of things added in nigeria and on the other shore is now reporting on corruption in nigeria that were hard to report on and its even done stories because people have gotten fired in the u. S. Theres a lot of pushback on corruption. Sign of the greater connectivity market, another thing in nature as an african countries but the billion and a half of bonds globally related and now an investment portfolio here. One could argue that 20 billion saved the election. They are connected to things we are talking about for africa and african institutions and democracy will start to deal with labor issues or corruption issues on their own terms. The same way we did in the qs. The election of 1900 basically bought. They basically dealt with this overtime and had the same kind of processes. Peter, how much time do they have . [laughter] we can keep going. Where is the next big thing in africa . Next big thing. Yes, where should people be putting their money . Where is the next trend . We talked about a few years ago a map of the world by internet populations are generated and africa was resized and nigeria was publicly about five eighths of africa. Jake. It goes back to our nigerian bellwether. When you get into members of the nigeria intact for consumer goods or anything, when you connect the increased investment with the increase in Consumer Power<\/a> and the sheer population numbers, pretty much what you have and we talked about this a lot, and a homer and can have with side, you can scale that on a revenue basis. You see the first african billionaire or millionaire. A lot of things go back to nigeria. Its invested in a lot of companies solving business problems. One that aubrey and i have talked about as a lot of people focused on potentially companies doing things about the Creative Industries<\/a>. For example, the company we had up on the site is trying to solve distribution problems with african Creative Wares<\/a> because not only what is the second largest Film Industry<\/a> in the world, but in terms of revenue, less than 1 of the 5 billion could be traced back to going to the people who produce this stuff. The point is that jason and some of these other platforms solving this, if they can solve this for nature and the west rest of africa it can make them a lot of money but we also uncovered netflix is talking to local partners. If Companies Like<\/a> this can solve problems for african monetization, he also saw them for American Companies<\/a> that face the same problems on their pirated movies and Creative Industries<\/a> stuff, too. Eyelids attack to jake because they know it better. I am bullish on factors related to construction. Infrastructure is going to be Growth Industries<\/a> for 50 years, 100 years and said things like paint factories, hatchback areas, everything you need for construction on a daytoday basis are going to be fastgrowing companies and i also ethiopia has a Large Population<\/a> moving quickly and implementing a very aggressive infrastructure plan including the first light rail opening up. I am very bullish on ethiopia. Weve barely touched anything. Thank you very much. We appreciate you coming out. Thank you. [applause] thank you, leslie and thank you to vibe and shake. [inaudible] [inaudible conversations] [inaudible conversations] [inaudible conversations] at afternoon, everybody. Thank you so much for coming out this up again. My name is lisa muscatine, one of the coowners of politics prose. I wasnt expecting that. I promise i did not abridge that, but thank you. It is very kind. That has been a cowinner, brad graham is not cured wishes he could eat. On behalf of him in the rest of the staff, we are delighted to have you here for this event and for such a fascinating otm topic. Topic. 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