Page last updated at 10:27 GMT, Sunday, 8 March 2009

Africa's private sector flowers

During African Economy week, the BBC's African Perspective spoke to two business gurus about the potential the continent offers for business and for profit.

Euvin Naidoo
Euvin Naidoo sees growing potential for profit in Africa, for smart investors
Euvin Naidoo is President and CEO of South Africa Chamber of Commerce in America, and a visiting lecturer at WITS University, Johannesburg. He was selected to become one of an elite group of Young Global Leaders for the World Economic Forum, in Davos.

The question is not will you invest in Africa, but where in Africa will you invest?

The world is undergoing a cyclical downshift, and Africa is part of that.

But separately, there is a structural growth that is still fundamentally running through the world.

Once we emerge from the cyclical downturn, who are the players that will be best positioned to take advantage of structural growth?

For the informed investor, Africa has pockets of excellence.

If you look at some of the pioneering private funds, they closed last year with significant profits.

I found Africa as vibrant as China or India. There is no lack of entrepreneurship there

As telecoms advances we will see the greater unlocking of the continent.

Right now we have the laying of fibre down the east of the continent, which will unleash tremendous bandwidth, having applications for healthcare, education as well as infrastructure.

The potential to 'leapfrog' is available in other areas like energy, like education, like agriculture.

Stormy passage

Where should I invest?

If one had to ask that question of hedge fund managers in the United States you would find many stretched for answers.

You want investments that weather the storm.

If there is difficulty internationally in where one can go for a flight to safety, then Africa faces almost a double hurdle - a mist or angry cloud obfuscating opportunities that do exist.

The times we are in now - with a tremendous global headwind, if not a hurricane - call for a renewed dialogue between business government and civil society.

How can we as 'Africa Inc' deal with the storm that approaches so that we prepare ourselves for the uptake?

There is a lot of work left to be done.

Vijay Mahajan
Vijay Mahajan was shocked by the vibrancy of private enterprise in Africa
Vijay Mahajan, is a professor of marketing at the University of Texas, Austin, USA, and the author of "Africa Rising".

Originally from India, he specialises in developing markets. But until recently, like so many, he would not have considered Africa as a place to do business.

Five years ago I did not know much about Africa.

My perception was like everyone else - the one you read in the media - a place of diseases, corruption, crime, poverty, wars, tribal fights.

I found Africa as vibrant as China or India. There is no lack of entrepreneurship there.

The private equity companies are there, the money is flowing, foreign direct investments are coming.

The consumer power speaks [for itself].

The fact you have 300-450m people - divide that by five and you get 60-90 million households.

That is a lot of consumer power.

In my book, I looked at the people who are neither super rich nor super poor. They are right in the middle.

I call them Africa Two.

Here you have a group of anywhere from 300-450 million people in Africa, who in my opinion are really going to drive the economy.

Who are these people? They could be school teachers, nurses....working in the hospitality industry. They are very positive.

They go to work, they are ambitious, they want things better than they had for their children.

They want education, better products... they see Africa going places.

Their ambitions are not any different from those I had seen in other developing countries.

Cheetah generation

The second thing I discovered was how young the continent was.

More than 40% of the population is less than 15 years old.

We call them the Cheetah generation (the word used by a scholar from Ghana).

These kids don't have the memory of the colonial days.

They are ambitious. They have seen the Beijing Olympics. They know many many things can be done. They want the best things for themselves.

The growth of China and India are the best thing that has happened [for Africa].

When the Chinese and Indian companies started going to Africa the rest of the world woke up. How can these Indian and Chinese companies go to Africa and do well? There really is an opportunity.

People realised that the market is not any different from what they know back home.

Africa's time has come.

Africa's entrepreneurs, Africa's media, Africa's leaders - they really need to take a proactive role and tell the rest of the world how much consumer power we have got.

I think the time has come.

Tune into the BBC World Service to listen to the African Perspectivespecial on the Power of Africa's Private Sector, on Saturday 07 March at 2106 GMT. The programme will be available for a week on the website.

You can take part in a debate about business in Africa on the Tuesday 10 March edition of BBC Africa Have Your Say.

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