Benefits Barometer outlines solutions for companies in Africa
Alexander Forbes yesterday released BenefitsALL Barometer Africa, the thought leadership publication that challenges employers, fiduciaries, policymakers and financial services providers to help address the well-being needs of Africans.
Anne Cabot-Alletzhauser, Head of Alexander Forbes Research Institute, believes that unlocking future value will depend on a true collaborative effort between business, government, communities and the people who inhabit this continent.
BenefitsALL Barometer Africa tackles the following eleven themes, relevant for multinational companies operating in Africa:
1. The demographic challenges of Africa
Cabot-Alletzhauser points out that we can’t presume that Africa’s youth bulge in population growth will translate into a “youth dividend” for economic growth. Without proper support around education, skills training and health, that “youth dividend” could turn out to be a “youth demerit”. At this time, African countries rank lowest in terms of focus on human capital development. Employers can play a critical role here in helping to fill the gap where governments are hampered by constraints on the fiscus. More importantly, it’s in their financial interests as employers.
2. Africa and the Fourth Industrial Revolution
African economies are likely to experience quite variable outcomes in their ability to adjust to the Fourth Industrial Revolution. Understanding these differences will be a function of not just assessing the skills capabilities of a country, but also the degree to which their economy is exposed to these global dynamics.
3. Rapid growth prospects
Africa is cited as offering investors exposure to some of the best economic growth opportunities globally. But that masks a more problematic reality. The record shows that few African nations have been able to convert that growth in GDP to inclusive, sustainable outcomes for their broader populations.
In many respects, this failure to translate a country’s economic growth into financial wellness and financial stability for its citizens is a function of failed institutions and failed governance. “We need to pay close attention to how the trends on overall governance are playing out for different countries on the continent,” explains Cabot-Alletzhauser.
4. Political will and economic growth
Getting governments to focus more on inclusive growth is not just a feel-good factor. Economic research highlights the point that the greater disconnect between a country’s population and its leadership and the greater the cultural fragmentation of country, the harder it is to motivate high levels of productivity. Cultural and political fragmentation can impact on economic growth by as much as 2% in some of the cases highlighted.
5. Partnering on foreign direct investment and multinational business initiatives
The real key to sustainable, inclusive economic growth will be how African governments manage their relationships with external investment partners, foreign development initiatives, and multinationals investing into their countries. Africa is at an important tipping point in its relations with the current three economic superpowers: the US, China and Africa’s largest trading partner, Europe. Africa can either continue to be party to an extractive economic model that leaves Africa in a deficit in terms of its own sustainable development needs, or African nations can become better managers of the conditions under which they are prepared to partner on foreign direct investment and multinational business initiatives.