In Africa there is US$1 trillion waiting to be unlocked by African businesses and entrepreneurs if sustainable business models are pursued.
These opportunities and how to tap from it, will only be realised if business leaders strike out in new directions “to embrace more sustainable and inclusive economic models.”
According to a report release by the Business Commission entitled, better business better world, greater sustainability can help businesses in Africa overcome global burdens to growth and deliver trillions of dollars to the continent.
The report also identifies actions business leaders can take to capture their share of the prize and set the world on the path to a sustainable, inclusive economy.
The Business Commission’s global report, first launched in January 2017 ahead of the World Economic Forum in Davos, shows how sustainable business models could open economic opportunities across Africa alone, and this business models could open up an economic prize of at least US$1.1 trillion and create over 85 million new jobs by 2030.
“Business leaders need to strike out in new directions to embrace more sustainable and inclusive economic models.”
Overall, 600 million new jobs are needed over the next 15 years to match growth in the global workforce, and with seven percent more people aged 15-24, over 80 percent of them in Africa, Africa youths could face severe poverty if jobs are not created.
The report which was launched in Nairobi, puts the African private sector squarely in the drivers’ seat on the road to achieving sustainable development.
A key message of the report is that digital solutions and entrepreneurs will be critical to unlocking many of these new opportunities.
Research from the report also identified 32 ‘development’ unicorns with market caps of more than US$1 billion.
In Africa entrepreneurs are bringing new solutions to social and environmental problems in remarkable ways, and the opportunities to do so are compelling.
One market hot spot, affordable housing in Africa, could create over 13 million of these jobs, while risk pooling, the single largest monetary opportunity in Africa, is valued at US$150 billion.
The report cites over 25 case studies of giants such as Nissan, Unilever, Mahindra, Ericsson and Merck, as well as ‘disruptive innovators’ like Safaricom’s M-Pesa, TransferWise, Peek Vision, and Bla Bla Car — which have successfully tapped into opportunities by addressing some of the world’s most pressing challenges such as climate change, economic inequality, and the gender gap.
Companies like M-Pesa and Transferwise have profited from this market by enabling remittances via peer-to-peer transactions at a much lower cost than banks.
The report cites that in Kenya for example, 43 percent of GDP in 2013 flowed through M-Pesa — supporting over 237 million peer-to-peer transactions, more than any other such system in the world.
The report argues that the world’s current economic model is flawed because it fails the Brundtland test. In other words, the economic and social gains over the last 30 years have compromised the ability of future generations to meet their own needs. This is because current growth drivers, such as the use of fossil fuels and rapid urbanization, are no longer sustainable.
The report also proposes an action plan for companies to adopt new business models that will not only be responsible, but will deliver a return on capital.
In the case of food, the report sees significant opportunities in Africa, reflecting their large share of cropland and currently low levels of productivity.
Aside agriculture and housing insurance firms could tap into the wealth of Africa as the continents only have less than three percent of the population on health insurance
“Providing health, life and disability insurance cover for low-income groups in Africa, represent a US$40 billion market opportunity for insurance companies. But the continent tends to get overlooked due to inability to afford afford tiny premiums..