IFC Insights: The Private Sector’s Role in Africa’s Recovery

By Devon Maylie

Strive Masiyiwa, executive chairman and founder of Econet Group, a diversified technology group he started in Zimbabwe, is one of Africa’s most successful businessmen and philanthropists. Now he’s using his private sector influence to help countries in Africa get the resources they need to manage the spread of the coronavirus. In May, the African Union appointed Masiyiwa as a special envoy to mobilize the private sector to respond to COVID-19 and help the region source personal protective wear and other critical medical equipment. In this edited interview, Masiyiwa discusses how the region first needs to focus on saving lives and then on using the private sector as a vehicle for reconstruction.

Q: You’ve recently been appointed as an African Union Special Envoy to mobilize the private sector response to COVID-19, especially around personal protective equipment. How is that work going?

A: One of the things we’ve developed in less than three weeks is a marketplace, an online marketplace for all the countries to buy what they need, and to be able to pay for it, to organize the financing for it. We’ve also organized the African private sector, all the companies that are involved in manufacturing, and we’ve brought in bankers and funders into conversations that are aimed at increasing the capacity of the African manufacturing sector in this space. One of the things we’ve done for instance, is we secured a design from Richard Branson’s Virgin Orbit of a very revolutionary ventilator. Currently, we are buying ventilators at about $15,000. This ventilator will be sold for about $1,200. And we are going to start manufacturing 10,000 of these ventilators in South Africa. That’s just one of many initiatives that we are trying to pull together at the moment.

Q: As you look at the private sector during both this management phase, and then ahead to the rebuilding and recovery phase, what role should the private sector play?

A: If you are a CEO or chairman or even on the board of a major company, anywhere in the world right now, there is nothing that has a bigger impact on your business than this crisis. At the stage where we are in June, the priority is to save lives. Where Africa is, if we are looking at the statistics, it could be six weeks behind what you saw as the peak in the United States or in Europe. Until we know how we get through the next six weeks, we have to be all focused on fighting the spread of the disease. And it has to be a call to the private sector to step forward, pivot with their businesses, pivot with their skills, pivot with their leadership and roll up their sleeves.

Q: What are some of the opportunities that you see now and, in the post-COVID-19 business world and how can African entrepreneurs capitalize on them?

A: There are some industries now in the reshaping of this that are going to be absolute winners. Anybody who is developing digital platforms, who understands the digital environment irrespective of what industry you come from, they’re going to be big winners. Those who can also pivot their businesses toward a new environment, they’re going to be winners. In other words, your ability to be adaptable, to understand the new environment is what makes you a winner. No matter what industry you’re in.

I just had a call from Ethiopian Airlines. As soon as they saw that I was building this online marketplace platform, they said, ‘We’d like to move this stuff.’ They are adapting passenger aircraft for cargo. Their cargo business is going through the roof. There are those who say airlines are dying. But there are those airlines who are thinking, ‘OK, what do I do?’

Q: What other advice do you have for start-up founders and entrepreneurs who are looking to come out of the crisis stronger?

A: My job is to first of all give perspective. I was there in 2008. I was there in 2001. I’ve seen these kinds of devastating crises emerge. They do come, and they’ll be there in the future. So, don’t think the world just ended. And then you must give them hope. When hope dies, people can’t do anything. Most of them will go out of business because Africa has no ability to give them a safety net, or to strengthen their businesses. It’s going to be tough for the young entrepreneurs, but we need them to be able to get up, dust off and run again.

Q: What can institutions like IFC and others do?

A: IFC is absolutely vital. Many people don’t know this, but IFC helped me when I was a young entrepreneur 30 years ago. We’ve got to step in and help Africa’s young entrepreneurs. This is a time for IFC and the World Bank to really step up and help us. And they can do this by wholesaling solutions through our financial institutions on the ground, because they can’t always help the very small guys, but they can help microfinance institutions. They can help local banks, give them better facilities, so that they can pass them on to young entrepreneurs.

Q: Where should people be focusing right now to help prepare to rebuild the future?

A: First and foremost, we need a global response. That is why I’m part of the call by the envoys for a job stimulus program of $100 billion for Africa through special drawing rights at the IMF. We have to find that kind of support for the African private sector. And we then have to make sure that, that money makes its way to the private sector and with the private sector being the vehicle for the reconstruction. We’ve also got to make sure that governments are paying their domestic debt to their suppliers. There’s a great discussion going on about government debt standstills. But whilst governments in Africa are asking for help, which I totally support, they must also clear their debt to the African private sector. Because if governments choose to borrow from the private sector, and then not recognize it as real debt, they cripple their business sector.

Q: If you could list three to five things that private sector actors and government should focus on, in addition to the ones you just mentioned, what would they be?

A: We need a Marshall Plan for Africa’s public health system. And that Marshall Plan should be jobs and enterprise driven. Africa found itself without the health care infrastructure that it should have been building. So, I’m calling for a $15 to $20 billion Marshall Plan for Africa’s health care infrastructure: public hospitals, private sector investment into ensuring that we have the hospitals and we have the infrastructure, pharmacies, manufacturing facilities, the pharmaceutical industry is missing. All this needs to be built. With a serious crisis of this nature we must harness lessons from it and make sure that we come out better and stronger. So why not start where the crisis began? A major fund for the healthcare infrastructure.

Published in June 2020

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