A refreshing and encouraging Boston Consulting Group report released this week has identified 40 African corporations that are establishing what the management firm calls "a dynamic international presence." Moreover, it points out that a group of the eight strongest African economies has a per-capita gross domestic product surpassing that of the hitherto much more celebrated BRIC group of Brazil, Russia, India and China.
These successful African economies are bunched at the southern and northern extremes of the continent (with one outlier far out in the Indian Ocean, namely, Mauritius); they include Egypt and South Africa, as well as smaller countries such as Botswana and Tunisia. In between, there are numerous countries that are afflicted by chaos and misery, such as Congo and Zimbabwe.
Even so, the 40 corporations that Boston Consulting highlights are not confined to the richest African countries; they include Ecobank from the small nation of Togo, as well as two each from Nigeria and Angola. Many of them, not surprisingly, are banks or natural-resources companies (oil, metals and phosphates), but there are some manufacturers, too.
"Many African companies," says Boston Consulting's report, "are unencumbered by legacy assets and business models." The word "legacy" here is a euphemism for aging, depreciating equipment. In other words, it is an advantage for telecommunications firms that there is so little infrastructure; there is huge scope for mobile-only telephone services. Similarly, the lack of large systems of bank branches means that many Africans can go straight to electronic banking, without ever having had an account at a branch in the first place.
There is truth to this; underdevelopment can mean starting from a comparatively clean slate. Again cheap labour can be beneficial to the labourers, if firms successfully undercut high-cost competitors. At the same time, the Boston Consulting report acknowledges the low levels of education in Africa, and thus of skills; in most of the continent, if 5 per cent of high-school-age young people are going to school, the country is doing quite well. Government investment in education is healthy enough, but companies and households spend much less on it than in other emerging economies.
Though African firms have no global brands, dozens of them are actively involved in the global economy. They are blazing promising trails for entrepreneurs in the African countries that still languish.