NOTES

PREFACE

1. Jacques Bughin et al., Lions on the Move II: Realizing the Potential of Africa’s Economies, McKinsey Global Institute, September 2016.

2. Mutsa Chironga et al., Roaring to Life: Growth and Innovation in African Retail Banking, McKinsey & Company, February 2018.

3. Mutsa Chironga, Hilary De Grandis, and Yassir Zouaoui, “Mobile Financial Services in Africa: Winning the Battle for the Customer,” McKinsey & Company, September 2017.

4. Figures based on McKinsey analysis of data from Analysys Mason (http://www.analysysmason.com) and Dataxis (http://dataxis.com).

5. Figures based on McKinsey analysis of data from Analysys Mason (http://www.analysysmason.com).

6. Alexandra Dumitru and Raphie Hayat, “Sub-Saharan Africa: Politically More Stable, but Still Fragile,” RaboResearch—Economic Research, Rabobank, December 3, 2015; Peter Dörrie, “The Wars Ravaging Africa in 2016,” The National Interest, January 22, 2016.

7. While Poverty in Africa Has Declined, Number of Poor Has Increased, World Bank, March 2016, http://www.worldbank.org/en/region/afr/publication/poverty-rising-africa-poverty-report.

8. “Africa Literacy Facts,” African Library Project, https://www.africanlibraryproject.org/our-african-libraries/africa-facts.

9. The studies we drew on include the McKinsey Global Institute reports Charles Roxburgh, et al., Lions on the Move: The Progress and Potential of African Economies (June 2010); David Fine, et al., Africa at Work: Job Creation and Inclusive Growth (August 2012); James Manyika et al., Lions Go Digital: The Internet’s Transformative Potential in Africa (November 2013), and Lions on the Move II; and the McKinsey reports The Rise of the African Consumer (November 2012); Antonio Castellano et al., Brighter Africa: The Growth Potential of the Sub-Saharan Electricity Sector (February 2015); Lohini Moodley et al., Women Matter Africa (August 2016); and Irene Yuan Sun, Kartik Jayaram, and Omid Kassiri, Dance of the Lions and Dragons: How Are Africa and China Engaging, and How Will the Partnership Evolve? (2017).

10. Monique Vanek, “Inside Billionaire Aliko Dangote’s $12bn Dangote Oil Refinery,” CNBC Africa, June 27, 2017.

11. Bloomberg Markets, “Africa’s Richest Man Has a Plan: Cement, Then Oil—Then Arsenal FC,” August 17, 2017.

CHAPTER 1

1. C. I. Jones, “The Facts of Economic Growth,” Handbook of Macroeconomics, vol. 2A (Amsterdam: Elsevier BV, 2016).

2. Charles Roxburgh et al., Lions on the Move: The Progress and Potential of African Economies, McKinsey Global Institute, June 2010.

3. Joseph Cotterill and David Pilling, “South Africa and Nigeria Limp out of Recession,” Financial Times, September 5, 2017.

4. Tim McConnell, “What’s the World’s Fastest-Growing Economy? Ghana Contends for the Crown,” New York Times, March 10, 2018.

5. McKinsey global citizen survey, 2017.

6. See Peter Bisson, Rik Kirkland, and Elizabeth Stephenson, “The Great Rebalancing,” McKinsey & Company, June 2010, https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-great-rebalancing.

7. Ezra Greenberg, Martin Hirt, and Sven Smit, “The Global Forces Inspiring a New Narrative of Progress,” McKinsey Quarterly, April 2017.

8. Doing Business 2018: Reforming to Create Jobs, World Bank, October 31, 2017.

9. Doing Business 2014 Economy Profile: Rwanda, World Bank Group, 2013, https://openknowledge.worldbank.org/handle/10986/18880.

10. Jacques Bughin et al., Lions on the Move II: Realizing the Potential of Africa’s Economies, McKinsey Global Institute, September 2016.

11. Calestous Juma and Francis Mangeni, “The Benefits of Africa’s New Free Trade Area,” Harvard Kennedy School Belfer Center, June 11, 2015, https://www.belfercenter.org/publication/benefits-africas-new-free-trade-area-0.

12. Tania Holt, Mehdi Lahrichi, and Jorge Santos da Silva, Africa: A Continent of Opportunity for Pharma and Patients, McKinsey & Company, June 2015.

13. Aspen Integrated Report 2017, Aspen Pharma, June 2017, https://www.aspenpharma.com/wp-content/uploads/2017/11/Aspen-2017-Integrated-Report-LR.pdf.

14. Ethiopian Airlines Factsheet—April 2018, https://www.ethiopian airlines.com/Cms_Data/Contents/EthiopianAirlines/Media/Corporate/FactSheet/Ethiopian-short-FactSheet-April-2018.pdf.

15. John Aglionby, “Ethiopian Airlines Soars with Help from the State,” Financial Times, February 9, 2016.

16. Kaleyesus Bekele, “The Rise and Rise of Asky Airlines . . . with More to Come,” African Aerospace Online News Service, September 6, 2016.

17. Jacques Bughin et al., Lions on the Move II: Realizing the Potential of Africa’s Economies, McKinsey Global Institute, September 2016.

18. This analysis excludes state-owned enterprises and multinational corporations.

19. The total revenue pool is 90 percent of what it could be when South African companies are included.

20. Jake Bright, “An e-Commerce Challenge in Africa: Selling to People Who Aren’t Online,” The New Yorker, June 30, 2016.

21. Ibid.

22. Yolandi Groenewald, “Matlare’s Nigerian Waterloo,” City Press, November 22, 2015; Ann Crotty, “Dangote Finally Turns Corner,” Business Day, April 18, 2017.

23. Mutsa Chironga et al., Roaring to Life: Growth and Innovation in African Retail Banking, McKinsey & Company, February 2018.

24. Chris Bradley, Martin Hirt, and Sven Smit, Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds (Hoboken, NJ: John Wiley & Sons, Inc., 2018).

25. David White, Mehrdad Baghai, and Stephen Coley, The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise (New York: Perseus Books, 1999).

26. https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/how-we-help-clients/growth-and-innovation.

CHAPTER 2

1. James Manyika et al., Digital Finance for All: Powering Inclusive Growth in Emerging Economies, McKinsey Global Institute, September 2016.

2. Samuel Gebre, “Interswitch Nigeria Sees Delayed IPO Concluded by End-2019,” Bloomberg, September 14, 2017.

3. James Manyika et al., Digital Finance for All.

4. Jacques Bughin et al., Lions on the Move II: Realizing the Potential of Africa’s Economies, McKinsey Global Institute, September 2016.

5. Ibid.

6. United Nations population division database, http://www.un.org/en/development/desa/population/publications/database/index.shtml.

7. See, for example, Paul Collier, African Urbanization: An Analytic Policy Guide, International Growth Centre working paper, 2016.

8. Bughin et al., Lions on the Move II.

9. Ibid.

10. Lal K. Almas and Oladipo Obembe, “Agribusiness Model in Africa: A Case Study of Zambeef Products PLC,” International Food and Agribusiness Management Review 17, special issue B (2014).

11. Katrina Manson, “Nestlé Cuts Africa Workforce as Middle Class Growth Disappoints,” Financial Times, June 16, 2015.

12. Leonie Barrie, “How Ethiopia’s Flagship Textile and Apparel Park Is Taking Shape,” just-style.com, May 5, 2017; www.skyscrapercity.com.

13. Other African countries, however, may struggle to compete against low labor costs in Asian countries such as Bangladesh. See Alan Gelb et al., Can Africa Be a Manufacturing Destination? Labor Costs in Comparative Perspective (Washington, DC: Center for Global Development, October 2017).

14. Bughin et al., Lions on the Move II.

15. Ibid.

16. Omono Eremionkhale, “GZ Industries Will Open SH1.3 Billion Sultan Hamud Plant in 2016,” Venturesafrica, November 6, 2015; Janice Kew, “Nigerian Firm Takes on Nampak,” IOL Business Report, September 30, 2015; Dinfin Mulupi, “Nigerian Manufacturer Cashing in on Demand for Drinks in Africa,” How We Made It in Africa, March 27, 2014, https://www.howwemadeitinafrica.com/nigerian-aluminium-can-manufacturer-cashing-in-on-demand-for-drinks-in-africa/.

17. Irene Yuan Sun, Kartik Jayaram, and Omid Kassiri, Dance of the Lions and Dragons: How Are Africa and China Engaging, and How Will the Partnership Evolve? McKinsey & Company, June 2017.

18. Bughin et al., Lions on the Move II.

19. Ibid.

20. Ibid.

21. The World Bank has highlighted this type of manufacturing as a particularly exciting and viable opportunity for Africa, especially given increasing costs and regulatory complexity in China. See Hinh T. Dinh et al., Light Manufacturing in Africa: Targeted Policies to Enhance Private Investment and Create Jobs, Africa Development Forum, World Bank, 2012.

22. These wages are an average for the entire Chinese economy and are estimated from data on total wages plus benefits divided by total employment. The data come from the Global Growth Model of McKinsey & Company’s Strategy & Trend Analysis Center.

23. Bughin et al., Lions on the Move II.

24. Irene Yuan Sun, “The World’s Next Great Manufacturing Center,” Harvard Business Review, May–June 2017, 122–129.

25. Lily Kuo and Abdi Latif Dahir, “Alibaba’s Jack Ma Says African Entrepreneurs Should Learn from Failure Not Success,” Quartz Africa, July 20, 2017.

26. Kevin Watkins, “Imagine Life Without Electricity—That’s the Reality for Two-Thirds of Africa and the Results Are Devastating,” Independent, June 5, 2015, http://www.independent.co.uk/voices/comment/imagine-life-without-electricity-thats-the-reality-for-two-thirds-of-africa-and-the-results-are-10300033.html.

27. Favour Nnabugwu, “‘We Spend N8bn on Diesel Annually,’ says MTN Nigeria,” Vanguard, June 24, 2015.

28. Clayton M. Christensen, Efosa Ojomo, and Derek van Bever, “Africa’s New Generation of Innovators,” Harvard Business Review, January–February 2017, 128–136.

29. Antonio Castellano et al., Brighter Africa: The Growth Potential of the Sub-Saharan Electricity Sector, McKinsey & Company, February 2015.

30. Richard Dobbs et al., Infrastructure Productivity: How to Save $1 Trillion a Year, McKinsey Global Institute, January 2013.

31. www.ge.com/africa/company/nigeria.

32. https://www.africa50.com/.

33. Paul Jarvis, interview with Africa50 CEO Alain Ebobissé, Africa50, June 1, 2017, https://www.partnershipsbulletin.com/people/raising-africa.

34. “African Development Bank Unveils Ambitious Electrification Plans ‘Because Africans Are Tired of Being in the Dark,’” Why Electricity Matters, May 5, 2017.

35. “Power Africa Launches New Initiative at African Utility Week,” Power Africa, May 18, 2017.

36. IBM Global Commuter Pain Survey: Traffic Congestion Down, IBM, September 2011.

37. Bughin et al., Lions on the Move II.

38. Somik Vinay Lall, J. Vernon Henderson, and Anthony J. Venables, Africa’s Cities: Opening Doors to the World, World Bank, 2017.

39. “Healthcare Is Becoming Big Business in Africa, Albeit Slowly,” Financial Times, May 10, 2017.

40. Jonathan Wheatley, “Nigeria’s ‘Great Farm’ Model Bears Fruit in Time of High Insecurity,” Financial Times, November 7, 2017.

41. Ibid.

42. Emiko Terazono, “Japan’s Mitsui to Invest in African Food Commodities Trader,” Financial Times, November 22, 2017.

43. “Agricultural Investment Programmes Boost Production in Morocco,” Oxford Business Group, 2015, https://oxfordbusinessgroup.com/overview/agricultural-investment-programmes-boost-production-morocco.

44. Acha Leke et al., South Africa’s Big Five.

45. Reuters staff, “Eni and Anadarko Join Forces on Mozambique Gas Projects,” Reuters, December 3, 2015.

46. Borges Nhamire and Paul Burkhardt, “Eni Finalizes $7 Billion Mozambique Gas Project Investment,” Bloomberg, June 2, 2017.

47. Scott Desmarais and Marc Stoneham, Rising Up: Unlocking the Potential of Africa’s Oil and Gas, McKinsey & Company, December 2014.

48. Collier, The Plundered Planet.

49. Neil Hume, “Gem Diamonds up 15% on 910 Carat Diamond Find,” Financial Times, January 15, 2018.

50. Mia Breytenbach, “Sula to Pursue DRC Cobalt Opportunities as It Changes Name to African Battery Metals,” Creamer Media’s Mining Weekly, January 18, 2018.

51. “OCP Reports Earnings for Fourth Quarter and Full Year 2016,” OCP, March 2017.

52. Akash Dowra et al., Creating Global Mining Winners in Africa, McKinsey & Company, February 2016.

53. Sustainability Report 2014, Randgold Resources, http://www.randgoldresources.com/files/sustainability-report-2014.

54. James Manyika and Charles Roxburgh, The Great Transformer: The Impact of the Internet on Economic Growth and Prosperity, McKinsey Global Institute, October 2011.

55. James Manyika et al., Lions Go Digital: The Internet’s Transformative Potential in Africa, McKinsey Global Institute, November 2013, https://www.mckinsey.com/industries/high-tech/our-insights/lions-go-digital-the-internets-transformative-potential-in-africa.

56. Manyika and Roxburgh, The Great Transformer.

57. Analysys Mason DataHub, http://www.analysysmason.com/services/Research/DataHub/.

58. Figures based on McKinsey analysis of data from Analysys Mason (http://www.analysysmason.com).

59. Ibid.

60. Euromonitor International, 2016, from trade sources and national statistics.

61. Mutsa Chironga, Hilary De Grandis, and Yassir Zouaoui, Mobile Financial Services in Africa: Winning the Battle for the Customer, McKinsey & Company, September 2017.

CHAPTER 3

1. “Saham Group Becomes a Pan-African Investment Fund and Sells Its Insurance Business to Sanlam,” BusinessWire, March 8, 2018.

2. Jacques Bughin et al., Lions on the Move II: Realizing the Potential of Africa’s Economies, McKinsey Global Institute, September 2016.

3. Mutsa Chironga et al., Roaring to Life: Growth and Innovation in African Retail Banking, McKinsey & Company, February 2018.

4. Elena Holodny, “The 13 Fastest-Growing Economies in the World,” Business Insider, June 12, 2015.

5. Robert Muggah and David Kilcullen, “These Are Africa’s Fastest-Growing Cities—and They’ll Make or Break the Continent,” World Economic Forum, May 4, 2016, https://www.weforum.org/agenda/2016/05/africa-biggest-cities-fragility/.

6. Joe Myers, “These Are Africa’s Fastest-Growing Cities,” CNBC Africa, May 25, 2016.

7. Ibid.

8. Maggie Fick, “Coca-Cola Buys Stake in Nigerian Juice and Dairy Company CHI,” Financial Times, January 30, 2016.

9. Toby Shapshak, “Liquid Telecom to Be Largest Pan-African Broadband Network with Neotel Purchase,” Forbes, June 28, 2016.

10. “Arla Foods, Tolaram Group Partner to Market Dano Milk,” Beverage Industry News, November 19, 2015.

11. Dinfin Mulupi, “Informal Retail ‘A Market You Can’t Afford to Ignore,’” How We Made It in Africa, January 12, 2015, https://www.howwemadeitinafrica.com/informal-retail-a-market-you-cant-afford-to-ignore/45983/.

12. Achim Berg et al., The Apparel Sourcing Caravan’s Next Stop: Digitization, McKinsey & Company, September 2017.

13. Jacques Bughin, Levente Jánoskuti, and András Havas, The Next Gold Medal: How Hungary Can Win the Productivity Race in the Digital Age, McKinsey & Company, September 2016; Eduardo Zachary Albrecht and Betty Chemier, “Tanger Med: Renault’s Investment in Morocco,” Fair Observer, July 6, 2014; Elizia Volkmann, “French Connection Nurturing Morocco’s Auto Industry,” Wards Auto, April 12, 2016; Groupe Renault website, https://group.renault.com/en/our-company/locations/our-industrial-locations/tangier-plant/; Tanger Automotive City website, www.tac.ma/.

14. Thomas Farole, Special Economic Zones in Africa, World Bank, 2011, https://openknowledge.worldbank.org/handle/10986/2268.

15. Irene Yuan Sun, Kartik Jayaram, and Omid Kassiri, Dance of the Lions and Dragons: How Are Africa and China Engaging, and How Will the Partnership Evolve? June 2017.

16. Matina Stevis, “Kenya’s Tech Hub Gets a Makeover,” Wall Street Journal, April 11, 2017.

CHAPTER 4

1. “Kellogg Company and Tolaram Announce New, Long-Term Partnership to Significantly Expand Presence in Africa,” press release, September 15, 2015, http://newsroom.kelloggcompany.com/2015-09-15-Kellogg-Company-and-Tolaram-Announce-New-Long-Term-Partnership-to-Significantly-Expand-Presence-in-Africa.

2. Clayton M. Christensen, Efosa Ojomo, and Derek van Bever, “Africa’s New Generation of Innovators,” Harvard Business Review, January–February 2017, 128–136.

3. Equity Bank financial results, 2017, Equity Group Holdings Plc, October 30, 2017. https://www.equitybankgroup.com/investor-relations/financial-results.

4. Identifying and Capturing Market Opportunity in Africa through Private Sector Innovation: An Introduction to LafargeHolcim Affordable Housing, Centre for Affordable Housing Finance in Africa, January 6, 2016, http://housingfinanceafrica.org/identifying-and-capturing-market-opportunity-in-africa-through-private-sector-innovation-an-introduction-to-lafargeholcim-affordable-housing/.

5. Irene Yuan Sun, Kartik Jayaram, and Omid Kassiri, Dance of the Lions and Dragons: How Are Africa and China Engaging, and How Will the Partnership Evolve? McKinsey & Company, June 2017.

6. “Business in Nigeria: Africa’s Testing Ground,” The Economist, August 23, 2014.

7. Mutsa Chironga et al., Roaring to Life: Growth and Innovation in African Retail Banking, McKinsey & Company, February 2018.

8. Ibid.

9. Sun, Jayaram, and Kassiri, Dance of the Lions and Dragons.

10. Ibid.

11. Mutsa Chironga, Hilary De Grandis, and Yassir Zouaoui, Mobile Financial Services in Africa: Winning the Battle for the Customer, McKinsey & Company, September 2017.

12. Caroline Howard, “EdTech Giant 2U Acquires GetSmarter for $103 Million,” Forbes, May 2, 2017.

13. Kate Douglas, “How mPedigree Built a Business by Combating Counterfeit Products,” How We Made It in Africa, August 26, 2015, https://www.howwemadeitinafrica.com/how-mpedigree-built-a-business-by-combating-counterfeit-products/51384/.

14. David Herbling, “Equity Group to Help Open Chain of Health Clinics,” Business Daily, March 2, 2015.

CHAPTER 5

1. Irene Yuan Sun, Kartik Jayaram, and Omid Kassiri, Dance of the Lions and Dragons: How Are Africa and China Engaging, and How Will the Partnership Evolve? McKinsey & Company, June 2017.

2. Dominic Barton, James Manyika, and Sarah Keohane Williamson, “Finally, Evidence That Managing for the Long Term Pays Off,” hbr.org, February 7, 2017, https://hbr.org/2017/02/finally-proof-that-managing-for-the-long-term-pays-off.

3. See Jacques Bughin et al., Lions on the Move II: Realizing the Potential of Africa’s Economies, McKinsey Global Institute, September 2016.

4. “Mohammed Dewji: A Made in Africa Success Story,” African Business Magazine, January 23, 2017.

5. “Supply Chain Management,” Shoprite Holdings Ltd., n.d., https://www.shopriteholdings.co.za/trade-partners/supply-chain-management.html.

6. “Power Africa and Black Rhino Partner to Electrify Africa,” Black Rhino, n.d., http://blackrhinogroup.com/power-africa-and-black-rhino/.

7. Africa Ariño, “Strategies That Go the Distance in Africa,” IESE Insight, first quarter 2015.

8. McKinsey interview with Mohammed Dewji, August 2017.

9. “Mohammed Dewji: A Made in Africa Success Story,” African Business Magazine, January 23, 2017.

10. Terence McNamee, Mark Pearson, and Wiebe Boer, eds., Africans Investing in Africa: Understanding Business and Trade, Sector by Sector (New York: Palgrave Macmillan, 2015).

11. The Ibrahim Index of African Governance (IIAG) is a tool that measures and monitors governance performance in African countries.

12. “International Anti-Corruption Day: AfDB Calls for Stronger Measures in Africa,” African Development Bank, December 10, 2015, https://www.afdb.org/en/news-and-events/international-anti-corruption-day-afdb-calls-for-stronger-measures-in-africa-15205/.

13. Caryn Peiffer and Richard Rose, “Why Are the Poor More Vulnerable to Bribery in Africa? The Institutional Effects of Services,” Taylor & Francis Online, December 5, 2016, https://www.tandfonline.com/doi/full/10.1080/00220388.2016.1257121.

14. People and Corruption: Africa Survey 2015—Global Corruption Barometer, Transparency International, December 1, 2015, https://www.transparency.org/whatwedo/publication/people_and_corruption_africa_survey_2015.

CHAPTER 6

1. “Boomtown Slum: A Day in the Economic Life of Africa’s Biggest Shanty-Town,” The Economist, December 22, 2012.

2. Talent Shortage Survey, ManpowerGroup, May 2015, https://www.manpowergroup.com/wps/wcm/connect/db23c560-08b6-485f-9bf6-f5f38a43c76a/2015_Talent_Shortage_Survey_US-lo_res.pdf?MOD=AJPERES.

3. The OECD measures this phenomenon by country. In Africa there are a large number of countries where more than 20 percent of the university graduates live in an OECD country, and few with less than 5 percent.

4. David Fine et al., Africa at Work: Job Creation and Inclusive Growth, McKinsey Global Institute, August 2012.

5. Irene Yuan Sun, Kartik Jayaram, and Omid Kassiri, Dance of the Lions and Dragons: How Are Africa and China Engaging, and How Will the Partnership Evolve? McKinsey & Company, June 2017.

6. MTN Group Limited Integrated Report for the Year Ended 31 December 2013, MTN Group, 2014, http://www.mtn-investor.com/mtn_ar2013/index.php.

7. www.dangotecement.com/careers/dangote-academy/.

8. Lohini Moodley et al., Women Matter Africa, McKinsey & Company, August 2016.

9. Georges Desvaux, Sandrine Devillard-Hoellinger, and Pascal Baumgarten, Women Matter: Gender Diversity, a Corporate Performance Driver, McKinsey & Company, 2007.

CONCLUSION

1. Hanna Ziady, “CEO Initiative Fund Gears Up to Aid SMEs,” Business Day, March 26, 2017.

2. See Dominic Barton, “Capitalism for the Long Term,” Harvard Business Review, March 2011.

3. Nelson Mandela, Long Walk to Freedom: The Autobiography of Nelson Mandela (Boston: Back Bay Books, 1995).