Africa’s overlooked business revolution
Global business leaders who misunderstand Africa run the risk of missing out on one of the 21st century’s great growth opportunities.
As global business interest in Africa has blossomed, we have found ourselves traveling the world to help executives understand where the true opportunity lies, and how their businesses can seize that opportunity before their competitors do. A few years back, one of us (Acha) found himself in Seoul, presenting to the chairman of one of the largest Korean conglomerates. At that stage, the company had almost no presence in Africa, and its executives were concerned that their Chinese competitors were stealing a march on them.
The McKinsey team arrived at the meeting armed with a PowerPoint presentation, whose first page was a map of Africa. We’d intended to flip quickly past it, but the chairman stopped us in our tracks. “You’ve made a mistake,” he exclaimed. “You have two countries called Congo!” In fact, there are two countries named after the mighty River Congo. One is the mineral-rich but conflict-ridden Democratic Republic of the Congo (DRC), with a population of around 87 million and a land area 80 times that of Belgium, its former colonial power. On the other side of the river is the Republic of the Congo, with a population of just 5 million but a GDP per capita ten times that of its neighbor, reflecting its position as a significant oil producer.
“Yes, there are two Congos. Why not? There are two Koreas!” we told the chairman. There were laughs all round, but this moment of confusion underlined a real issue facing any company seeking to build or grow a business in Africa: how to navigate the continent’s bewildering scale and complexity. Africa’s land area exceeds that of China, Europe, and the United States combined (Exhibit 1). Its 54 countries have a collective population of 1.2 billion. It has over a thousand languages and huge diversity in income levels, resource endowment, infrastructure development, educational attainment, and business sophistication.
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