African Business: changing Africa and the World in the digital era

Geneva, 21.03.2017 - Speech by Federal Councillor Johann N. Schneider-Ammann, Head of the Federal Department of Economic Affairs, Education and Research EAER Africa CEO Forum

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Ladies and Gentlemen,

First, I would like to extend a warm welcome to all of you here in Geneva, the international capital of Switzerland. As you may know, Switzerland is a decentralised federal state. That’s why we allow ourselves three capitals. A political capital in Bern. An economic capital in Zurich. And an international capital here in Geneva, the gathering place of a host of international and multilateral organisations.

Many outside Switzerland think the capital city is Geneva or Zurich, which are more renowned. But the true political centre is Bern, which is where people like me are from...

I know Switzerland can sometimes be a little bewildering for outsiders…

This been said, as a Bernese but also as a Swiss, but foremost as minister of economic affairs of my country, I am very happy to have you all here in Geneva.

Therefore, let me start by thanking the organisers of the AFRICA CEO FORUM – the Groupe Jeune Afrique and Rainbow Unlimited – for creating this platform dedicated to developing the private sector in Africa. I am delighted and honoured to have the opportunity to address this large audience of CEOs from the biggest African and international companies, as well as many political decision makers from the African continent. At this fifth edition of the Forum in Geneva, I also welcome the presence of Swiss companies looking to expand their activities in Africa.

As you may know, I was myself a businessman before I joined the Swiss government.

I can tell you that for an entrepreneur, Africa is a continent full of business opportunities. With such a young population – where two thirds are under 35 – of 1.1 billion inhabitants, which is expecting to reach 2.5 billion by 2050, Africa is without doubt a huge dynamic market with enormous potential. There are plenty of young people out there, ready and motivated to play a part in developing the private sector.

A growing population also means growing needs in terms of infrastructure. Africa’s rapid urbanisation presents an immense opportunity, but also a challenge for the private sector. Intra-regional trade remains low though compared to other regions. Only 16% compared to about 60% within the EU. But it is rising fast. And this trend illustrates growing opportunities for African producers to diversify their trade.

Awareness about the ongoing changes in Africa is growing. In Europe as a whole as well as in Switzerland. More and more business people are ready to seize the new opportunities that you are creating on your continent. Congratulations!

Governments have a crucial role to play by ensuring that business-friendly conditions are in place to enable the private sector to flourish. I strongly encourage government officials to sit down with the private sector to identify the needs and opportunities that would boost Africa’s development.

However, business communities should not simply wait for government, but actively seek a constructive and friendly dialogue with the authorities to foster better rules and better business environments. Switzerland works together with selected African partner countries as part of its economic development cooperation programme.

In addition to supporting framework conditions suitable for inclusive and sustainable economic growth and better governance, a further key aspect is to strengthen the private sector and foster entrepreneurship. In practice, Switzerland helps partner countries to create more and better jobs. It enables governments to set up effective institutions and deliver efficient public services. It helps them develop sustainable trade and establish a stronger competitive footing on international markets. It also encourages climate-smart business practices.

Energy and energy distribution is a strategic question for Africa. Huge investments are necessary to ensure a reliable electricity supply for an entire country. Many countries do not have the resources for this. My State Secretariat for Economic Affairs helps them generate a variety of revenue streams and to crowd in private investors, for example by supporting them to adapt laws or improve the investment climate.

Furthermore, through the Swiss Investment Fund for Emerging Markets (Sifem), Switzerland has invested over 700 million dollars into projects supporting small and medium-sized enterprises around the world since 2015. One third of these projects were in Africa. All this shows that Switzerland works to make partner countries more resilient. This places them in a stronger position to withstand economic and financial shocks and the impacts of climate change.

Ladies and Gentlemen,

I cannot resist the temptation to talk a little bit about the secrets of Switzerland’s economic success. Three key factors contribute to the economic prosperity enjoyed by my country. The first is our liberal labour market: this allows our companies to adapt to the needs of the markets and for employees to engage in more satisfying and useful work.

The second is our social partnership: business leaders and representatives of the workforce discuss salaries, working conditions and reorganizations in a frank and open manner –by individual businesses, by economic sector and/or by specific geographical areas. This means ‘contract before law’ – less bureaucracy, more freedom.

The third factor – and the one that is dearest to me – is education, especially our system of vocational education and training. This system allows us to train young people on the job, in companies who need them and who will employ them. They are improving their skills to the specific needs of the company that is training them.

Thanks to vocational education and training, Switzerland has far fewer young people out of work than in countries that rely on more academic and formal education schemes. Only 3.5 % of young people in Switzerland are without a job, compared to up to 25% in some large European countries. In my view, you, - as business leaders of your countries -, should also give some thought to this and try to develop a similar system adapted to your specific needs. I am not saying this is easy. It took us time. Even today, we have to put a lot of energy in it, to preserve, adapt and develop it further. When foreign states come to us for help to build their own system of vocational education and training, we always encounter the same hurdle: to build this kind of system, you need the business community not only to cooperate, but also to take the lead, to nurture new practices. Businesses should not only offer training jobs to apprentices, but also set the standards and goals for that training, in close cooperation with other companies and the government.

This needs an entirely new culture; this means that you have to commit yourselves to training young people in your businesses and looking after them. I can assure you this is very rewarding. I trained hundreds of young people in my former company and it is something that still fills me with pride today. But more importantly, the company gets the talented workforce it needs to prosper.

Ladies and gentlemen,

Digitalization is in the process of changing the economy and the way we work worldwide. In Africa, you are experiencing this first hand. Experts in the United States already say that you are the most advanced testing ground for new digital payment systems based on the smartphone. The use of smartphones and technologies, especially in remote places far from urban centres, are tools for change and development. You are already seizing these opportunities for Africa to forge ahead and rebuild communication and financial networks at the most advanced levels.

This is the moment when Africans are coming together and reinventing the business worlds of their countries. Together with new digital payment and distribution systems, this may change the future of African agriculture for example. There is tremendous potential in this sector as you have large areas of uncultivated land. Not only are you beginning to change the terms of feeding your continent, but you may well also tip the scales in international agribusiness in the not too distant future. I am also well aware, as a hunger crisis building up in East Africa, that there is still a lot of work to do.

Nevertheless, in the new digital world, Africa is beginning to level the playing field and enter a new era on more even terms with the developed world. Swiss companies, which are leaders in terms of innovation, are certainly eager to partner up with your firms to develop digital business in your countries. This forum is a great opportunity for making contacts and fostering business. A business-friendly environment and entrepreneurship are important drivers in providing solutions to address the economic and industrial challenges faced by Africa today.

Ladies and Gentlemen, dear friends,

We are living in very difficult, but also very exciting times. Old economic hierarchies and traditional value chains are breaking down under the pressures of new technology and innovation and the progress of free trade. This is a challenge for developed countries, but it is also a tremendous opportunity for Africa, and especially for you as entrepreneurs and business leaders. Seize it and make the most of it.

Together, we will win the fight for a better and more prosperous world where more people can live a more fulfilling and dignified life. That is my goal. That is your real life and task. That is the basic idea that should inspire our gathering today. I wish you and all of us the wisdom, the willingness and the smarts to make improvements – day after day!

It is worthwhile!

In this spirit, I wish you a fruitful day, here in the Geneva-area, and a safe trip back to your homes and families.

Thank you.


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Parliament Building East
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Switzerland


Herausgeber

Eidgenössisches Departement für Wirtschaft, Bildung und Forschung
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