In 2018, the African Continental Free Trade Agreement was founded, paving the way for free trade amongst 54 of the continent’s countries. This marked a new chapter for improving business and trade relations within the continent, but there remain many structural obstacles to achieving better economic integration.
Egypt has been placing economic integration with the rest of the continent at top of its agenda over the past few years. Many Egyptian businesses, like El Sewedy Electric, CIB, Egypt Air, Orascom, Elevate Healthcare, Trella, Swvl and Pharco Corporation, to name a few, have launched operations across the continent, aiming at strengthening relations with Africa and exchanging expertise and know-how.
At the Business Forward annual event, held on December 13, a fireside chat, ‘Unpacking Economic Integration with Africa’ featuring prominent panelists was a platform for a conversation about the topic. Moderated by Christiane Abou Lehaf, senior manager of international cooperation at AfreximBank, the chat was joined by Ahmed El Sewedy, CEO of El Sewedy Electric, Mohamed Dagnote, executive director of Nigeria-based Dansa Holdings, Tarek Moharram, CEO of Elevate Healthcare Africa, Sherine Helmy, CEO of Pharco Corporation.
Is doing business in Africa any different than elsewhere?
The short answer is yes, as per El Sewedy. His company, which mainly focuses on manufacturing cables and investing in infrastructure, does business across the world, from Europe to the Gulf. When attempting to penetrate the African continent, it became clear that a different approach is needed.
“There are a lot of challenges to working in Africa, it’s not easy. We had to think of a different way to work there than our approach to working in Europe or the Gulf. Our biggest market after Egypt is the UK. But I only need to visit the UK once every five years, since they know what they want; they need the price and quantity and we send the product. In Africa, it’s totally different,” explained El Sewedy.
“To work in Africa, you have to give a complete solution to the market needs and to be available on the ground. In most countries, we have people from a high executive level to discuss with the governments to determine their needs.”
Move production to Africa or keep it in Egypt?
Presiding over a pharmaceutical company that played a critical role in Egypt’s widely acclaimed and successful Hepatitis C treatment campaign, Sherine Helmy, CEO of Pharco Corporation, seeks to export the experience to other African nations.
“We want to cure a million people in Africa and we will make the same system-transfer to other countries,” said Helmy, referring to the transfer of knowledge and expertise in order to undertake a similarly successful Hep C eradication campaign in the rest of the continent.
“By 2033, we have to be producing in Africa, 90 percent of Africa’s pharmaceutical needs are imported, with 70 percent of them being imported from outside the continent,” explained Helmy. “So every year in the coming 10 years, we should be building a new factory, and we are planning to be doing so. With economies of scale, we can supply champagne on beers budget because with pharmaceuticals you have to have high quality product and highly efficient machinery.”
However, obstacles to achieving this goal are still very much significant.
“You cannot be in the middle of somewhere in Africa and you don’t have spare parts or the machine is not performing well,” said Sherine, adding that his company will start establishing production facilities in certain West African locations in order to get their life-saving products to reach 200 million West Africans.
Healthcare shortages in Africa
From pharmaceutical production to healthcare, Tarek Moharram, the CEO of Elevate Healthcare Africa, a healthcare fund that aims at exporting Egypt’s private healthcare expertise to African markets, weighed in with his experience on working within the continent.
“We have seen that there are many countries that have a very high level of political maturity and stability and diverse economies, like Nigeria, Ghana, Kenya and Morocco,” said Moharram. “Despite their huge improvement, they continue to be in deep shortage when it comes to healthcare services.”
To explain just how big the shortage is, Moharram said that it would need a lifetime of consistent building of healthcare facilities in order to merely ‘scratch the surface’ of filling that gap.
“The gap that is there is tremendous and it’s a gap of know-how. It is not an investment gap; the capital is there and many people have an interest in those kinds of services in this kind of production. But they lack the technical know-how and they lack the appetite for getting out of their comfort zone,” he added.
“It’s definitely a huge opportunity for entrepreneurs, but it’s also a mission,” explained Moharram. “The best place to be is to be both serving a humanistic mission but also extending the soft power of your country and doing great business as well.”
Missed economic opportunities due to lack of integration?
Joining in from Lagos, Nigeria, Mohamed Dangote, CEO of Dansa Holdings specializes in FCMGs, expressed his beliefs that fundamental issues need to be addressed in order for African economic integration to be a reality. He believes obstacles to realizing full integration trace back to colonial times.
“I think if you look at how Africa was designed, it wasn’t designed for us to co-exist. If you look at the colonial times that left their imprint and the infrastructure behind, it was designed for us to export,” affirmed Dangote. “And we’re still exporting our natural resources until today. So in terms of the opportunities that are missed, I cannot describe how exponential they are.”
If we actually sit down and do this together as an African nation, not an African colonized nation but as an African independent nation, I believe the growth can be exponential,” he said.
“We want to set up the infrastructures. We want to make sure we look at our industries. We want to look at our human capital and ensure that we can co-exist. We want to look at how do we trade currencies.”
“When we talk about Africa, I think one of the fundamental areas is, of course, language,” he added.