Why is Africa of growing importance to JLL?
While different African economies are at different stages of development, the continent as a whole has broad parallels with Asia 30 years ago, just before its sustained growth phase. Now, as in Asia then, most major international corporations – and many early developers and investors – are rolling out growth plans across the African continent.
For illustration, here are some of the clients we met with in Kigali this week, all of whom are active in Africa:
- First National Bank of South Africa
- Mara and Atlas Capital Group
- Agility Logistics
- Willis Towers Watson
As at all WEF events, access to senior leaders is easy and informal, and good business opportunities flow. The GE delegation, for example, was led by its head of all non-U.S. business. So, clearly, we are not alone in investing in African growth, and indeed, we are in very good company. We now have growing offices in Egypt, Morocco, Nigeria, Kenya and the Republic of South Africa.
What did I learn at WEF Africa?
First, the mood of African business and political leaders was calmly confident, and the press broadly echoed that. This was very different from the Davos meeting early this year, where the media feasted on China issues and financial market volatility.
I learned that there is growing confidence among African nations, particularly about their potential for sustainable economic growth, which currently stands at around 4 percent annually, despite the negative impacts of oil and commodity price declines on many economies.
There is growing confidence, too, among Africa’s leaders. As the generation that won (or grabbed) power after independence relinquishes control in many countries, examples are emerging of good national leadership and governance. As I wrote in my opening notes, Rwanda was chosen as host because it has provided just such a regional example of excellent government. When I spoke with Cyril Ramaphosa, Deputy President of South Africa, on an Infrastructure panel, he was clear in his praise for Rwandan leadership.
There is also progress in developing cross-border regional planning to:
- Develop infrastructure (road, rail, bridges, electric generation and transmission)
- Reduce trade tariffs
- Remove non-tariff barriers to trade, such as transit permissions and trading licenses
- Facilitate the movement of people between countries by removing or simplifying visa requirements
These concrete intergovernmental projects are evolving in three manageable regions;
- The North-South Corridor: Botswana, Malawi, Mozambique, South Africa, Tanzania, Zambia and Zimbabwe
- The Central Corridor: Burundi, Tanzania, Rwanda, Uganda and the Democratic Republic of the Congo.
- The emerging Western group: Angola, Nigeria, Ghana, Guinea, Liberia, Ivory Coast, Senegal, Sierra Leone and others
Despite the progress, however, all is definitely not roses!
African countries have relatively low scores in the JLL Global Real Estate Transparency Index, for example. This measures nations on key factors that determine investor confidence, both in real estate and broader commercial assets:
- Transparent data on cost, performance and market pricing
- An independent and reliable judicial system
- Low levels of bureaucracy and red tape
- Low levels of corruption
It is clear that African nations are understanding how to make improvements in these areas, and there is inexorable improvement in the continent’s scores on our transparency index.
There is also a perception problem. The world’s press shouts bad news about Africa but whispers good news (a global problem, by the way). So the positive developments that must be happening to underpin 4 percent annual growth are not widely reported.
Still, by the standards of most of our developed markets in Asia, Europe and the Americas, living, travelling and doing business across Africa remains very challenging. So I would like to pay tribute to all our JLL colleagues who are working with great persistence and great success to build JLL into the leading real estate service company on the continent.
We will be back in force at the WEF in South Africa next year!