Panel, Conference Presentation
Investing in African Prosperity (updated)
Milken InstituteTony Blair, Bill Gates, H.E. Paul Kagame, Strive Masiyiwa, Rhonda Zygocki, Michael Milken
- Demographic Shift: Africa's population is currently ~1 billion (15% of global total) and projected to reach 25% by 2050, driven by a youth bulge with a median age of 20 compared to 35–45 in the US, China, and Japan.
- Growth Metrics: Between 2000 and 2010, six of the ten fastest-growing economies globally were in Africa; IMF projections indicate seven of the top ten fastest-growing economies will be African by the mid-decade.
- Financial Capital Gap: African financial equity markets hold less than $1 trillion in total value, with most countries holding less than $1 billion, representing a significant gap relative to investment needs.
- Urbanization Potential: Africa remains the largest region globally where 50% of the population is not urbanized, presenting a major infrastructure and development opportunity similar to the UK's 1900 status.
- Rwanda's Turnaround: Following the 1994 genocide, Rwanda has achieved average economic growth of 7–8% for the last decade, with rising wages and a shift toward a "winner-takes-all" national identity.
- Health Progress: Under-five mortality rates in Africa have dropped from 20% to 10% due to vaccine and aid initiatives, though this remains 20 times higher than in middle-income or rich countries.
- Hidden Development Loss: For every child who survives under-five mortality, three others suffer brain development delays due to malnutrition or cerebral malaria, permanently reducing human capital potential.
- Agricultural Transformation: Ethiopia's Agricultural Transformation Agency increased productivity by 30% through policy trust and infrastructure, moving the country from frequent famine relief dependence to a substantial grain exporter.
- Chevron's Capital Commitment: Chevron has invested $25 billion in Africa since 2007, with 17% of its total global production originating from the continent and 80% of its local workforce being highly talented Africans.
- Angola Peace Dividend: In Angola, Chevron partnered with USAID and the UN to rebuild infrastructure post-2002 civil war, establishing the country's first microcredit bank (now 15 branches) and moving the nation off emergency aid.
- Governance Initiative (EITI): The Extractive Industries Transparency Initiative has secured 37 countries and over 70 companies to disclose nearly $1 trillion in government revenue from extractives, aiming to empower citizens through transparency.
- Telecom Penetration: Mobile phone penetration in Africa has risen from near zero 20 years ago to over 70% today, with Zimbabwe alone reaching over 100% penetration and 3 million smartphone users (internet access).
- Mobile Financial Services: Mobile money services are seeing rapid adoption, such as in Zimbabwe where 20% of GDP flows through operator-led mobile money platforms, growing at a compounded rate of 10% monthly.
- Polio Eradication Goal: A new $5.5–$6 billion campaign aims to eradicate polio in Nigeria, Pakistan, and Afghanistan over six years, with 40% funding from philanthropy and 60% from governments.
- Human Capital Investment: Rwanda allocates 15% of its national budget to education, contributing to a 90% college graduate return rate where students return to work in the country rather than emigrating.
- Infrastructure Deficit: A primary bottleneck for African growth remains basic infrastructure, specifically electricity, ports, and roads, which stability and order are increasingly allowing governments to address.
- Private Sector Role: President Kagame and Strive Masiwaya emphasized that lasting prosperity requires a strong, profitable private sector operating alongside stable governance to create jobs and economic diversification.
- Risk Mitigation: Despite challenges like hyperinflation (e.g., Zimbabwe's 500 billion percent inflation in 2008), businesses survive by hiring skilled locals, diversifying currency exposure (e.g., adopting USD), and partnering with local entities.
- Partnership Model: Consensus among panelists indicates that single-entity solutions are insufficient; success requires multi-stakeholder partnerships involving governments, citizens, philanthropies, and private sector firms.
- Capacity Building: Chevron and the Clinton Foundation are deploying teams to work directly within African governments to deliver specific programs (e.g., electricity, roads), moving beyond aid to operational partnership.
- Corporate Social Responsibility: Chevron reported zero cases of mother-to-child HIV transmission in its workforce in Angola (9 years) and Nigeria (12 years), expanding these programs to eliminate transmission across three African nations.
- Niger Delta Initiative: Chevron has leveraged $15 million of its own capital to mobilize $100 million in partnership with 17 other organizations to address conflict and poverty drivers in the Niger Delta.
- Future Investment Advice: Investors are urged to approach Africa as a collection of 54 distinct sovereign nations with varying governance levels, rather than a monolith, and to prioritize rule of law and local partnerships over "exotic" narratives.
- Education Leapfrogging: With 240 million children in Africa lacking physical textbooks, mobile phones and tablets are identified as potential tools to leapfrog traditional educational infrastructure.
- Women in Agriculture: 70% of food production in Africa comes from women on smallholder farms, identifying them as a critical demographic for investment and empowerment strategies.