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Reflections on the B Lab Africa Summit 2023: A journey towards sustainable impact

By Janet Ndugire, Senior Account Manager, Gong Communications

Last week, hot on the tail of the inaugural Africa Climate Summit the week before, I had the privilege of attending the B Lab Africa Summit 2023, hosted by B Lab Africa at Strathmore University in Nairobi. The event was themed, ‘Innovating a Sustainable Future for Africa: Business for Climate Impact and Growth’, and brought together an inspiring group of visionary leaders, passionate advocates, and experts dedicated to sustainable business practices. Among the attendees were sustainable business leaders, investors, climate experts, youth entrepreneurs, government officials, and change-makers from various corners of Africa. The diversity of perspectives and backgrounds represented at the summit underlined the gravity of the challenges we face and the importance of collective action to address them.

Giovanna Valverde Stark, the Ambassador of Costa Rica and Permanent Representative of UNEP and UN-Habitat (United Nations Human Settlements Programme), delivered the keynote address. She shared invaluable insights from Costa Rica, a nation that has achieved an impressive milestone of 100% renewable energy among other noteworthy accomplishments in combating climate change, by integrating climate change considerations across all public policies and budgetary decisions.

One of the standout features of the B Lab Africa Summit was its remarkable lineup of speakers, including, Vincent Ogutu, Vice-Chancellor of Strathmore University, Joachim Westerveld, CEO, Bio Foods Products, Joseph Mucheru, Former Cabinet Secretary, Ministry of ICT, Innovation and Youth Affairs, Kenya, Patrick McSharry, Chief Data Analytics Officer, World Data Lab, Sonia Orwa, Country CEO, Kenya, Mr.Green Africa, Amandine de Rosnay, Head of Sustainability and Inclusive Growth Business Mauritius and Head of SUNREF technical assistance. The workshop sessions offered deep dives into critical sustainability topics, and here are just some of the sessions that left a lasting impression:

Sistema.bio  and Eco2Librium (both B Corps) hosted a workshop centered on carbon markets and the value these markets offer to sustainable businesses. The speakers noted that carbon offsetting is a valuable tool for mitigating climate change and demonstrating environmental responsibility, and projects can take various forms, such as reforestation efforts, renewable energy installations, methane capture from landfills, or energy-efficient initiatives. Anton Espira, CEO/Founder of Eco2Librium ended the session by saying, “Carbon markets are the bridge between business success and environmental stewardship. By harnessing the potential of carbon markets, we empower businesses in Africa to not only thrive economically but also become champions of sustainability for our planet.”

One of Eco2Librium’s carbon offset projects in Kakamega, Kenya, is not only eco-friendly but socially impactful. Their Stoves for Life initiative not only reduces emissions but also generates employment for over 500 individuals. By sourcing stoves locally and distributing them to independent contractors, this circular project addresses environmental and social challenges, saving 250 acres of forest each year, and enhancing the lives of 400,000 rural Kenyans, promoting better health and economic well-being.

Another session, Integrating Business Sustainability and Smart Finance spanned topics such as the green economy, sustainable financing, and the transition from extractive to regenerative economic systems. Edward Matsiko, Managing Partner at Pearl Capital Partners commented, “Awareness of sustainable business practices in African local communities must be done differently and messages must be localised.” He talked about Africa’s incredible diversity, from bustling urban centres to remote villages, demanding tailored solutions for its unique sustainability challenges and opportunities. Many African economies depend on natural resources and agriculture, making resilience crucial. Sustainable practices not only benefit the environment but also enhance economic stability, reducing vulnerability to shocks.

Edward added that smart finance tools like impact investing and green bonds channel funds into sustainable sectors, driving economic growth while mitigating environmental impact.

A recurring theme throughout the Summit was the importance of customisation when it comes to sustainability in Africa, and we were reminded that Africa’s unique landscape presents a mosaic of challenges and opportunities. Cultural nuances, developmental disparities, and localised economic conditions all influence how businesses approach social and environmental impact. Consequently, adopting a standardised international B Corp selection process may not fully capture the intricate realities that African businesses face.

“For local communities to address climate change, we must meet them at their point of need. Our youth exhibit remarkable innovation. Kenyans in low-income areas are exemplifying a lot of climate resilience and pioneering innovative solutions.” Sonia Orwa, CEO, Kenya, Mr. Green Africa.

With over 55 B Corps and an impressive 4500+ companies utilising B Lab’s impact measurement tools across the continent, the B Lab Africa Summit 2023 by B Lab Africa represents Africa’s commitment to integrating social and environmental responsibility into business practices. It reaffirms that sustainability is not a one-size-fits-all endeavor but a collaborative journey of customisation, adaptation, and collective action, and that the continent is on the right track.

As a sustainability-driven communications agency in Kenya, our commitment to contributing to the community’s efforts in reshaping how organisations operate and make a meaningful impact remains unwavering. In 2020, in collaboration with Danone and B Lab, we teamed up with our sister company, Gong Communications, and developed a valuable e-learning tool designed to enhance awareness and understanding of B Corp principles among employees in B Corp certified companies. This tool is applicable to both certified B Corps and those in the process of becoming certified.

For international communications support in East Africa and beyond, please do get in touch with our sustainability team at: gongkenya@gongcommunications.com. From its Nairobi base, Gong Kenya has delivered communications assignments for clients in over 20 countries in sub-Saharan Africa and is part of a network of agencies operating globally.

Blog, Featured, News

Renewable Energy in Africa: A Post-COP26 Outlook

By Ryan Witton

 

By the close of the COP26 climate conference late last year, 77 countries and organisations had signed the ‘Global Coal to Clean Power Transition Statement’. In it, signatories pledged to phase out coal power and move away from the carbon-intensive fuel while scaling up investments in renewables. 28 new members signed up to the Powering Past Coal Alliance, joining more than 150 countries, sub-nationals and businesses, accounting for over US$17 trillion in assets. With nearly three quarters of global greenhouse gas emissions stemming from energy production, the transition towards clean energy sources is a necessity for tackling climate change and keeping global warming below 1.5 degrees Celsius. Africa is a continent which still relies heavily on fossil fuels and biomass for its energy needs, yet has terrific potential for renewable power. The International Renewable Energy Agency (IRENA) perhaps puts it best:

“Endowed with substantial renewable energy resources, Africa can adopt innovative, sustainable technologies and play a leading role in global action to shape a sustainable energy future,” – IRENA,  Scaling up Renewable Energy Deployment in Africa.

 

Africa’s Clean Energy Transition

 

Global economic and technological shifts are lending themselves towards cheaper and more accessible renewable power in Africa. The cost of solar PV energy decreased by 77 per cent between 2010 and 2018, and the price tags of other innovative technologies, like green hydrogen and lithium-ion energy storage, are also expected to continue falling. Independent power producers like AMEA Power are supporting this transition, with one example being the Sheikh Mohammed Bin Zayed solar PV power plant in Togo, which will provide 50 megawatts (MW) of clean energy to 600,000 households and 700 small to medium-sized enterprises in the region. Another example is the Kipeto Wind Power Project in southwest Kenya, which is the second largest wind power project in the country with a generation capacity of 100MW of clean electrical energy.

Financing remains the most significant challenge to large-scale renewable energy in Africa, according to the International Monetary Fund, so investment managers with knowledge and expertise to mobilise funds for large-scale projects on the continent are sorely needed. African Infrastructure Investment Managers (AIIM) develops and manages private equity funds which invest in long-term African infrastructure projects. Through its IDEAS Managed Fund, AIIM made a significant investment into Witkop Solar Park, a 30MW solar PV facility supplying electricity to over 6,000 households in the Limpopo region of South Africa. Witkop is connected to the national grid under the South African Renewable Energy Independent Power Producer Programme, an initiative designed to facilitate private sector investment into grid-connected renewable energy.

Olusola Lawson, co-managing director at AIIM, highlighted the importance of developing strategies that are “cognisant of certain constraints, like financing, to maximise the near-1.5TW renewable energy generation potential across the continent.” He described return on investment in African renewable energy as being potentially very high as upfront costs fall and regulatory and financing barriers lift. Bboxx is another excellent example of an AIIM investment with a scalable model, which in just over a decade has grown from inception to now operating in 10 countries to provide over two million people with clean electricity and utilities.

 

Green Hydrogen’s potential

 

Hydrogen produced through electrolysis and powered by renewable energy is labelled as ‘green’. This potentially zero-emission energy source could supply up to 25 per cent of the world’s energy needs and become a US$10 trillion addressable market by 2050, predicts Goldman Sachs. Despite its credentials, green hydrogen currently accounts for less than five per cent of hydrogen produced globally, the rest is primarily ‘grey hydrogen’, which is produced through carbon and methane-intensive methods. The African Hydrogen Partnership (AHP) is a continent-wide association dedicated to the development of green hydrogen, hydrogen-based chemicals, and hydrogen-related business opportunities across Africa. In an interview with Gong for its Africa Net Zero series, AHP co-founder and secretary general Siggi Huegemann describes green hydrogen as a key factor for decarbonising nations worldwide as they become green energy importing nations. He sees African countries as having enormous potential for producing huge amounts of low-cost green hydrogen to meet this demand. “One cannot decarbonise Europe without African hydrogen,” Siggi says, expanding on the need for large-scale hydrogen projects spanning several countries to diversify energy sources for importing nations.

The ‘Net Zero by 2050’ scenario proposed in the International Energy Agency’s World Energy Outlook 2021 predicted a strong emergence of inter-regional hydrogen trade. COP26 saw the inception of the Africa (and Latin America) Green Hydrogen Alliance to kickstart the development of the low-carbon fuel for use in both domestic and international industries. In a space where cross-sector dialogue, engagement and participation are pivotal for global scalability and the adoption of this relatively nascent technology, collaborations like the African Green Hydrogen Alliance and AHP will be critical.

Featured, News

Africa Net Zero Series: conversations with champions and challengers

AFRICA NET ZERO SERIES

African countries generate just two per cent of the world’s greenhouse gas emissions. Despite this, they find themselves on the frontlines of climate change, dealing with the effects of a rapidly warming world thanks to the other 98 per cent of global emissions. In our Africa Net Zero Series, we look at the champions and challengers helping to cut the continent’s emissions.

Our first guest, Elizabeth Wangeci Chege, CEO and co-founder of WEB Limited, told us she wanted to be part of the solution as an engineer in the construction industry, not part of the problem. She outlined the opportunities in Africa to build green cities in the future and the positive shift in attitudes among the private and public sector towards net zero targets.

Our second guest, Dr Wolfram Schmidt, Researcher at the German Federal Institute for Materials Research and Testing, discussed the ins and outs of cement production. Responsible for 2.8 billion tonnes of CO2, the cement industry is ripe for an overhaul. Dr Schmidt talked us through the idea of using waste from the widely grown crop cassava as an alternative material for “green” cement and the opportunity for producing African-made green cement to meet Africa’s housing and infrastructure demands.

And for the latest episode of our Africa Net Zero series, we were delighted to sit down with two guests: Siggi Huegemann and Dr Innocent Uwuijaren from the African Hydrogen Partnership (AHP). We learned more about the African hydrogen journey so far and discussed what the future might hold as the continent becomes one of the world’s major producers.

We hope you enjoy our carbon conversations so far, and if you would like to suggest another topic for our mini-series, please do get in touch with us.

Featured, Insight, News

The East Africa Insurance Sector: driving momentum to ensure climate change mitigation? 

By Sarah Caddy 

Extreme weather events are on the rise due to climate change, placing East Africa increasingly at risk. The recent torrential rain raising Lake Tanganyika to dangerous water levels is just one example, with experts citing climate change and deforestation in the Burundi highlands as causes for topsoil erosion around the lakes. Droughts, tropical cyclones and even plagues of locusts have all been experienced recently. Each threaten the health and livelihoods of households and economies. 

In response, there’s growing impetus to promote sustainability in the run up to the global climate event COP26, to be held in the UK in November. As experts in estimating risk and with significant investment capable of steering meaningful change, the insurance industry is well placed to advise and make a difference.   

To this end, the Nairobi Declaration on Sustainable Insurance was launched by the UN Environment Programme’s Principles for Sustainable Insurance Initiative (PSI) on 22 April 2021. Founding signatories including the Association of Kenyan Insurers (AKI), ICEA Lion Group, Egypt’s Regional Center for Sustainable Finance (RCSF), FSD Africa, and PTA Reinsurance all pledged to strengthen the African insurance industry’s contribution to achieving the UN Sustainable Development Goals (SDGs). These include ensuring a sustainable recovery from the Covid-19 pandemic. 

Four months on, with global climate disasters continuing to make news headlines, we look at the efforts being made by the African insurance industry to achieve the goals outlined by the Nairobi Declaration.  

As the only African member of the 22 global insurers and reinsurers who collaborated over 2020 as part of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) insurer pilot group, ICEA Lion Group is vocal about its pioneering role. Writing about its work on the group, it describes the analytical tools the firm is developing to improve climate risk disclosures in line with the recommendations of the TCFD, using the latest climate science. With mounting global pressure on accountability and evidence-based net zero target achievement claims, we predict an increase in African insurance firms communicating their use of tools aligned to the TCFD recommendations, and their role in mitigating against climate change. 

Meanwhile, FSD Africa refers to the obligations for the insurance industry to act on climate change. Writing in their July 2021 blog, risk managers Kelvin Massingham and Zillah Maliah outline the extent of the sustainable development crisis that we currently face, and the essential role that the insurance industry must play in facilitating the flow of capital to climate mitigation investments.  Their call to action to their industry peers is to act now: with only 3 percent of global climate finance allocated to sub Saharan Africa, and a low percentage of African weather-related losses currently being insured, East Africa is poorly equipped to meet the cost of increasing climate disasters. Delay from the insurance industry could prove to be catastrophic. 

While home to 15 percent of the world’s population, Africa is responsible for only 4 percent of global carbon emissions. And yet, Africa’s citizens are already among those suffering most from the effects of climate change – not only from extreme climate events, but also from decreasing agricultural yields and increasing disease transmission, as outlined in this article by the UNFCCC. Despite the unfairness of this situation, there is hope. Rama Yade, Director of the Atlantic Council’s Africa Center, describes the potential offered by the African continent to reverse climate change. She writes convincingly of the renewable energy opportunity, but also of the “massive investment” required to achieve full capacity – fifty billion dollars per year by 2050, according to the United Nations.  

The onus is on African insurance industry leaders to leverage their collective might towards a sustainable future. The appetite for working collaboratively towards a common goal that benefits society as well as business is evident in the work of the Nairobi Declaration. By effectively communicating their individual efforts, those insurance firms that are pioneering in this regard can not only be seen as industry leaders but may also nurture best industry practice for all. 

 

Insight, News

Understanding the full value of rural electrification in sub-Saharan Africa

By Ryan Witton 

According to the International Energy Agency’s 2019 Africa Energy Outlook, some 600 million people in sub-Saharan Africa do not have access to electricity (that’s 75% of the global total), and around 900 million lack access to clean cooking. Despite this, the population without electricity access is in fact falling thanks mostly to the speedy energy transitions of a small number of leading countries, particularly Kenya, Senegal, Rwanda, Ghana and Ethiopia. Electrification in these countries has been implemented through grid connections and a rapid rise in off-grid systems such as the solutions provided by Bboxx.  

At the turn of the century, Africa’s installed renewable energy capacity was around 22 gigawatts (GW) – a sharp contrast to the 189GW capacity in Europe the same year (a continent with 85 million fewer people). In the two decades since, Africa’s installed generation has more than doubled to over 53GW and is continuing with strong momentum. Just take a look at recent officially launched projects like Kipeto‘s 100MW wind farm in Kenya or AMEA Power’s 50MW solar PV power plant in Togo. 

We all know that access to electricity brings a host of economic and social benefits to high-growth nations, but the full worth of providing these clean sources of energy in rural communities across sub-Saharan Africa has yet to be realised. While the physical health challenges of traditional fuels for generators and cooking is widely examined, the strain on mental health is granted much less consideration.  

Let us look at the case of Teresia Olotai, a Maasai mother of six and senior ‘Mama’ of Lobulu, a tiny rural enclosure (or “boma”) in Tanzania. Like the other women in Lobulu, life without electricity for Teresia was challenging. In the darkest hours of the night, she risked falling on stones or unwittingly stepping on venomous snakes. She has had to deliver babies in the dark, and when her children woke at night, she fed and changed them by touch. Candles and kerosene lamps posed a potential fire hazard in her wooden hut. This was until Teresia and her boma became part of a USAID Power Africa Project to install rural solar micro-grids. 

For rural communities in sub-Saharan Africa, the introduction of access to clean electricity has undoubtedly led to positive impacts in physical wellbeing. Electrified health centres are able to offer extended service hours, laboratory testing and vaccine refrigeration. In the home, there is less illness from indoor smoke inhalation and fewer burns from traditional cookstoves. The physical strain attached to carrying heavy loads of wood or kerosene, along with a danger of physical assault during collection (especially for young girls) is also diminished. Increased access to health and hygiene information via TV, radio, and the internet can be greatly beneficial. But let us also consider the psychological traumas arising from these same situations. 

The concept of wellbeing runs far deeper than what can be ostensibly observed at a purely physical level. Studies in renewable energy interventions, predominantly solar and hydro pico-, micro-, and mini-grids, have revealed positive mental impacts for rural people that emanate from a lower perceived risk of injury or illness. Examples of these risk reductions are increased security inside and outside the home from thieves or wild animals with improved lighting, or a lower chance of illness, injury and property damage from burning kerosene indoors.    

Women have reported better sleep at night knowing that they had safe lighting for emergency situations, especially involving their children. Connectivity through improved access to mobile phones is a huge boon to mental health, and communities are able to celebrate their new-found ability to stay connected to loved ones, friends, and family when they are able to charge phones at home, rather than walk and bus to town and pay a vendor.  

Lighting facilitates communal and family gatherings, extended study hours and has been revealed to reduce the risk of domestic violence because households are generally happier with increased light. Regions where public services have been improved and street lighting has been provided offer the greatest community wellbeing benefits, with increased safety outdoors and more opportunities for communal gatherings and entertainment after hours. And of course all of this has an impact on economic growth. 

The worry or stress felt from the risk of injury, sickness, or lack of sleep can in many ways be more ubiquitous than the physical harm itself. It is therefore crucial that these implicit, as-yet-unquantifiable impacts to mental wellbeing be given just as much focus as physical impacts when planning renewable energy projects and micro-grids in rural sub-Saharan communities. 

Insight

Concern Universal on how to make phone calls using a mud oven

CONCERN UNIVERSAL ON HOW TO MAKE PHONE CALLS USING A MUD OVEN

Narda Shirley

 

I often find myself banging on to clients about the virtues of bite-sized video as a story telling medium. But I was reminded again of its power when I watched a video about a Concern Universal project called ‘how to charge your phone with a mud oven’. At just 1 minute and 30 seconds long, with only captions to explain what’s going on, the film has had over 20 million views and inspired 62,000 comments.

The ‘Flower Pot stove’ is bucket-sized and made of mud. It is made locally to a tested template, and runs on just a few sticks of wood, roughly a third less than a fire would use. It also produces much less harmful smoke which is an important innovation as the simple act of cooking kills 4.3 million people each year.

Approximately 2.5 billion people living in the developing world burn biomass as a primary energy source; this number is expected to grow to 5 billion by 2050.

Thanks to the clever little thermo electric generator that attaches to the stove, and produces electricity from its heat, people living in rural locations without access to the grid, can generate enough power to charge a phone or power a torch. Mobile phones, now very cheap, can help relieve poverty in so many ways. Remote farmers can get better access to fair market pricing and selling time for people to make phone calls can be a means of generating additional income in a community. Torches mean children can study after dark making more of education opportunities.

Concern Universal, (CU) the charity behind the initiative has a sweet spot for innovation where it improves the lives of women in particular. Its resourceful new Global Head of Communications & External Affairs, John O’Brien has masterminded an event on Tuesday 22 March at the fashion and design emporium, Clerkenwell London. The event, called ‘fashionUP’ will raise awareness and money for the work of the charity which has been going for 40 years and whose work extends beyond Africa into Latin America and Asia.

I’m shamelessly shaking down my friends (and theirs) to stump up the donation price to come along to ensure that Concern Universal gets a great turnout and raises the money it needs to continue with its work. While we are chomping on canapes, downing a few drinks, and taking in the stylish surroundings of the Clerkenwell emporium, it’s affecting to think that all over the undeveloped world, rural families are watching the last glimmers from their cooking fires go out, sinking them into complete darkness. Well done CU for shedding some light on all the issues and with such a clever solution. See you on the 22 March! And check out that film here.

Photo credit: Toby Richards

Insight

Running the Numbers: Chinese Social Media and Dangote Industries

 

Tom Griffiths

Last week, we at Gong were treated to a lunchtime talk by Jonathan Smith of Hot Pot Digital. Jonathan runs a bespoke service, representing a number of the UK’s brands on Chinese social media sites like Sina’s Weibo (China’s Twitter-equivalent in both micro-blog format and number of users). His talk raised a question in my mind: what share of voice does African business news have on Chinese social media channels, as compared with Twitter?

China-Africa trade receives a lot of attention, both positive and negative, in English and French social media. Simply search for the words “China” and “Nigeria” on Twitter and receive a stream of news, statistics and viewpoints. This is of little surprise given China’s perceived importance in many of Africa’s economies. I was interested if a similar ‘conversation’ exists on Weibo.

The story I decided to test my hypothesis on was this week’s news that Dangote Industries, a Nigerian Conglomerate, intends to invest US$9billion in building the country’s biggest oil refinery along with petrochemical and fertiliser plants. Dangote Industries’ founder, Aliko Dangote, announced that his company will be putting up US$3 billion and seeking US$6 billion in loan capital.

My admittedly less than rigorous method of investigation was to compare mentions of “Dangote” on Twitter with mentions of “Dān gē tè (丹格特)” on Weibo over the 5th of September. Before going into the findings I would like to note that I recognise Twitter is widely used in Nigeria when compared with Weibo. I have looked at geo-tagged tweets from users outside of Nigeria to try to negate this bias however I realise any findings were always going to be heavily weighted towards Twitter.

The results: Weibo had only two posts that mentioned the story. Both simply stated the facts without commentary and provided a link to a longer write up. Both posts were made by petroleum industry trade publication’s Twitter accounts. Twitter, on the other hand, held a huge number of tweets on the news. Many of these came from Nigeria, however there were also many hundreds from Kenya, the US, Britain and Indonesia. Most tweets simply restated the facts, however a number commented on the potential job creation of the new factories.

The results were striking, even with the obvious bias in the experiment: 2 Weibo posts compared with thousands of tweets. It seems that the new Nigerian refinery just wasn’t a talking point on Weibo, despite the resource trade between China and Africa being so well publicised. However, as many African countries’ economies rise, will we see an increase in discussions on African business on Weibo?

It would be interesting to repeat the test on a piece of news that directly involves both China and an African country: an experiment for a later day.

 

Insight

Homestrings wins at Africa Diaspora Awards 2013

 

Sarah Caddy

Pride of heritage was the flavour of the evening at the Africa Diaspora awards, held in London’s West End on 2 May 2013.

The continent had much to celebrate, with awards presented to the brightest and best from the worlds of Business, Academia, Entrepreneurship, Media and Community. Her Excellency Ms Thandi Modise, Premier of North – West Province, Republic of South Africa, set the tone for the evening with a moving speech on the role played by the African Diaspora in securing the continent’s successful future. “The spirit of internationalism has sustained humanity” she proclaimed, vocally grateful for the benefits that a global perspective can have not only for the individual Diasporans, but also for the separate countries within the continent. Her vision was for a continent that works with its neighbours and international allegiances to build an ever more promising future.

A prime example of her vision in practice is Eric Vincent Guichard, who secured the Entrepreneur of the Year award for his online initiative, Homestrings – an investment platform that facilitates Diaspora investments into their own communities.  It was an award we thoroughly toasted, as well deserved of our client!

 

Insight

President Mahama’s message at The Times CEO Summit Africa was very clear: Invest in people and infrastructure

 

Isabelle Alenus-Crosby

Africa’s future as the world’s economic engine rests on investing in its one billion people, President Mahama of Ghana said in a speech at The Times CEO Summit Africa today. “Investments should focus on people, providing them with jobs”.

Mr Mahama delivered his keynote address at the third CEO Summit Africa, which is held every year in London. The two-day summit which was held on April 29th and 30th this year, brought together Chief Executives of Africa’s biggest businesses with International Investors. The President’s address also focussed on Ghana’s readiness for business and the opportunities available for partnership with its private sector to expand the infrastructure base of the country.

Most of the continent is going through an unprecedented period of stability whilst an economic revolution is sweeping across it. With more investors coming in every day, Mr Mahama shouldn’t worry. Africa’s equity markets are hot and a virtuous cycle has already emerged. And the good news doesn’t end there. The Economist reported at the start of 2013 that a rapid increase across the full investment spectrum is expected within the next couple of years. People across Africa therefore have good reason to be optimistic. According to the IMF, 84% believe that they’ll be better off in two years.

Another possibility, of course, is that they’ll be much better off.

Insight

African GDP – growing faster than previously thought?

 

Isabelle Alenus-Crosby

There have been various reports in the news lately that the impressive GDP statistics posted by countries across Africa may actually be underestimations, and that the continent’s outlook could be even better than previously thought.

GDP growth is correlated to a variety of data, and if this data is sparse (which is still very much the case across Africa), whole swathes of economic activity can be overlooked. Simply put, growth is measured by comparing current data to the base year. But without sufficient data, many “new” sectors, such as mobile telephony, have nothing to be compared to. And these new sectors have been growing quickly and steadily across the entire continent for almost a decade.

Until 2010, Ghana was using a 1993 base year. When it was finally revised by the statistical office, GDP estimates rose by over 60 %, translating to approximately 13bn USD of economic activity. Nigeria’s base year is still set at 1990. An upward revision is therefore imminent and likely to be even more impressive than Ghana’s. In fact, economists are predicting that the GDP for the whole of sub-Saharan Africa will rise by at least 15 % in the next couple of years! Where’s the champagne?

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