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tv   Book Discussion on The Next Africa  CSPAN  August 1, 2015 9:03pm-10:01pm EDT

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discourse. and i think better is what theater is supposed to do and little by little it does. >> the theatre of for. -- war. it will be published is september. booktv on c-span2.
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>> our guests of honor today you have their biographies first to welcome jake, a co-author of jake bright of the foreign policy and has worked to the clinton imitation with senior economic issues. and she has been involved in a number of outlets as well as reporting to receive among other honors but of course, aubry hruby is at home here. like all great boxer is already out of date.
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such as the visiting fellow with the approval of the atlantic office and the board now aubry hruby is the seizure followed want -- a fellow at the embedded cancel -- atlantic cancel. [applause] so well either of us could get into the atlantic council to hear war stories in africa but and he was is a corporate strategy to facilitate $2 billion of investment.
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me and also to recognize by top of those under 33. i would not say when that occurred. >> aaron to be delighted august occasion we are here in and and we are delighted to have senior reuters state department correspondent here to moderate. we are grateful to be here wondering if they are on the other journalistic side with the deal on the iran nuclear deal to still make time for us at the atlantic council as a native of south africa
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she has a very passionate interest. so the people that you really came to listen to, at jake bright and aubry hruby. [applause] >>. >> it is up pleasure to be here. and all of you coming to day and where those leaders so we are very honored with though washington on june the of book of the early days.
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so we do want to give a few minutes of overview just to frame the conversation. end tuesday why did we write this book? we felt compelled to write this to expand the audience of those interested in doing business in africa. many of us feel that we're talking to the same people for years and years and years with a general dialogue and recently hours at a summit with power investment entitled energy and infrastructure but all
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rigo is representative of energy and infrastructure. that kind of free being motivated best to set out to write something ourselves. so we're clearly not african and we are very aware of that and we wrote in our introduction we believe we have been traveling and working on the continent. and with that as non africans doing business in the region and also spending and nervous about to time with adverted or entreprenuers we do hundreds of interviews we also know
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that africa is not a country and we expect that to, but we do believe there are crosscutting trends from a continental perspective so the book is many about kenya or nigeria. but there is a neutrality today gsa -- nigeria not only the size population with a special emphasis on nigeria. is probably doubling 400 million. the main thesis with the book is essentially there will be a normalization to
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be put in a certain box it is all this for all that. that he essentially is of mixed bag diverging at the same time people are risking their lives across the ministry and. the same way we have billionaires' horror of homeless population in the same area so that type of normalization and that dog a net basis the positives outweigh the negatives are of the continental right now. so we will give a talk the minute you are familiar with this one will not spend time here but it is a robust growth story over the last decade and also with to go ahead.
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with africa and investment and technology there is only half a dozen in google hits by then. >> getting to that does and then restarted to ask why africa? in 2010 with africa this or that. so why all the interest in africa?
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that had a big dissociation before rent -- with the framework it is a growth story. but basically since 2010 when the economist rand the story but the girl's story meeting the growth of several leading economies especially coming off the great recession. that got attention not previously looking at africa. that is one driver and trying to get people's attention. the next is investment.
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and locate and add a lot of movements of what is happening even in five years ago to double or triple now. with foreign investment direct investment. a.m. call fully -- portfolio investment. with the african immigrants and that has a lot of people's attention. with those demographics to go into detail but looking at the of global democratic -- demographic trends you cannot get away from the numbers of africa. population, the fastest during middle class, there is a huge demographic
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movement there is a big push africa has one of the dilapidated structures and with roads and housings and schools. >> one of the reasons we went with "the next africa" instead of the african recall was we believe this is a work in progress. a distinct difference from the old africa but it is not complete. in angola this is the transformation. so it's a contrast some of those that we saw from the old africa every you have
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been in business for decades. so as always is in 2007 the finance ministers and trade ministers to california. we went to google headquarters. there is the giant club. and at that moment was shown up by a light so you see the completes outline of the country and each is a different color. we just sit there and wait for it to rotate against africa. there was some africa i was missing because there were so few google hit saudia the basis they just looked like a couple of violence and it caught my a attention was indicative of the world
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after. was stuck in which was less than 20 percent, less a 3% of global trade, private equity, for whatever metric you want to use. so what we are beginning to break out. and to shift away from unilateral trade patterns to export their raw goods out to generate a more diverse economy. and the foreign relations is shifting away from the global power to the african country. but to have the choice of partners with brazilians and
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the malaysians with the corporate air and political sphere. >> so with the - - "the next africa" comparison on foreign aid, for those from the private sector or public sector to take charge of that agenda of all of the private sector side to all major figures from the those like the rockefellers of africa. in for billions of dollars then to take garner from the socio-economic challenges and is happening at the government level as they
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start to address with the foreign aid organization. the main source for wealth creation and the number of people that is going and why doesn't have to do with entrepreneurs? but there is a huge surge of appeal for africa. either directory businesses back to africa after having worked till and the private sector it is unjust the diaspora. but for a professional class across the of world and not delay the bringing back, entrepreneur with the
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brain drain also going into the tech sector. >> we covered a lot in this book and these are just some examples. so touche meld the two together and some? numbers with the informal economy so we tried to build up the number. with group's letter based as they are popping up. is one of the best films of out of africa. weekend rate 200500 start-ups and how much goes into african start-ups and then gets into breaking out
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of the rule leroy's talk about but now it is easier for individuals like us to buy african stocks and there has been more sovereign bonds issued more than over the last seven industries. badges created in nigeria. so now they make their way back. and finally african immigrants is increasingly
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the by recess consensus today and the example of that is for the book know every spring they are the newspaper story who come out of ice called to get except it into every single ivy league and he was one of them. >> we feel very optimistic of what is emerging in some areas with those long security issues in terms of the mediterranean and other challenges and with the central deal breakers and all that prosperity should be distributed equally.
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while others languish behind and what does that have to do with institutions, a geography and other factors? we really are having a nuanced view is a the book but we do believe overall that the next is the big lurch forward where we continue to see headlines with billions invested nigerian just doing a pop-up restaurant fashion designers the short list and those are indicative of what we would continue to receive. in the phenomenon to normalize their relationship >> we see americans be more
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likely to have african stock in their 401k were watch nigerian movies on netflix. or to learn a lot more african names band barack obama and nelson mandela. [laughter] >> welcome the everybody. remain have done the introductions but.
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>> the african name who is the founder with the elders served emerging markets and as i saw my first thought with the kenyans and the
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market share is vibrant and that is what the african story is. that basically what we have seen with nigeria becoming the largest african economy i do is saying it names a lot of companies to their region to see south africa as a gateway. in johannesburg to use that as a staging point many of
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them sound in the region but may be starting from the better part going to the most neighboring country to not make it as thoroughly or deeply into the other markets and then to become bigger with the gdp that maybe we don't need to set up shop right away when it comes to market and trade do you feel that shift? to do wonder why southern africa?
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>> and but we try to figure out and africa but to be above water also a lot more interesting to serve. a patent and then to be the third fourth largest country to be a negotiated or today?
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so they will go to set up for go there is a lot of friction. >> so the question is. >> that is a tough question. but the take away that so many companies are coming to the caveman all were not even showing up. night in watching like the first quarter. when we first started to look at this book. is in 2009, is in 2009 /
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2010 a lot of people were connecting africa up in business. not a lot of people there is a story a consultant did that prior to a 2010 like the maytag repair man compared to other people but there was a couple of articles that came out focusing on africa. over the last couple years we were completely engaged regard to the point where we cannot really follow with the u.s. companies looking and expanding starting to ring gauge yet global companies. also in terms of the investment but initially to have a lot of attention but
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when it we have that venture capital investing business? then restart talking about this, more the question to cv ipo? that it is not if but it is when. and it has happened so quickly. >> whether the there was a pilot to know the lay of the land. and who could navigate.
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that dialogue from the african business strategy sometimes dominated over concern over headlight risk with another type of issue but a real counterparty risk a haven't that is very, very important to choose their partners wisely and i was recently on a panel with the study of their investments into asia with that message of consumer goods countries with the tumultuous and found no difference.
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the actual headline riske had no impact on the growth story in indonesia. that we looked at with many of the market's. >> but you had a vision? how easy was it to break into that market and how do you stay there? >> this is the 10 year plan. in the plan has to be at least 10 years. so recognizing a lot of people missed the initial
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prime time to invest so another similar market would be to invest in india. my thought is africa is five years behind but for us in san francisco and regionally , to try to get people to understand to teach them how to do things not just companies but the company culture.
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>> that is something you have to deal with but they are so driven there is so much friction in the markets that we have day joke give the firm that the air would be lost. and the entrepreneurs with
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though locals. so that is right. complete each rent of the internet. but it is so much risk. and everybody wants the big money. then it is very similar to how to do that. >> so as an example but
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china also is very interesting because you don't have in interest why did he take that? >> as they mentioned earlier and the obsession the cottage industry so really is is the choice of partners. en el lot of the concerns are misconstrued about china investment in africa that i have trouble with sometimes because those that are
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coming from china into africa to build infrastructure is almost perpetrating an external way -- extra delay. beta o rand manage the project and the government's actually barrault that. -- barrault that for the government endeavor with given the eric rubric so for those reasons we did not spend a lot of time on it. >> i'm sure you have a lot of questions but there was no mention of aids during that summit at all. that is wrong.
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there is still sub-saharan development in africa that needs a. >> cattle they our view is to do disagree with that. we also undecided we would not make a book with a few read the book get gatt is charged chapters is as with investment and markets to bring about the trends such to focus on it the things that we have said up front so we are not saying that africa does problems will not go away but that we will make a comparison where cost-cutting trends will overshadow the problems we
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are very clear they will persist with that type of ebb and flow. somehow people think africa is straight up or down. either rising or falling but with a lot of socio-economic challenges. as we point out these trends are monumental happening with the demographics as the leadership is starting to emerge with the diaspora. that will lead to a lesser prominence of necessity and also their lesser influence having such a dominant role in socio-economic events.
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>> when president of, goes to kenya africa with america's interest. >> it is a very interesting coincidence he goes with the entrepreneur summit. that is the fuel for the continent and the policy makers that should be focused and a towering and completed the missing in action and how to across pollinate the knowledge that people on the continent want
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to learn. so giving the tools to do that is very important. to talk about the nearest programs and one of the key issues it is great as long as it is targeted and measured with that course correct when necessary and i think it has the few lawyers but that is okay. because nobody gets in the road without help but how do we get it out of the way? >> one more thing quickly is also of lots of things in
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terms of africa as challenges in some arab and other areas they will become commercial proposition and if you look into i am of the research center one of the titles is to take on the longstanding challenge is the shift in the direction of some of africa's problem to be commercial opportunities in the future. >> and the company you talk about it is amazing. so i would be advised to get the book.
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so of that philosophy. >> thank-you. my caution is to the recent investment in africa with different countries from different parts of the world like china or india southey's our very challenging to compete with the other parts of the world. >> it is challenging because
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out challenging for american and companies? you didn't hear about american investment. so we need to read knowledge that. >> the u.s. is still one of the largest investors of african countries. i think the most recent that last year was the highest investor. so procter & gamble alone with half a billion dollars with south africa ament nigeria but i would say competitive challenges that they stem from operating in developed markets just like if we all looked out the window to think the rest of
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the world thinks like we do we actually are abnormal for the rest of the world with traffic, the urban cities of though world operate very different purpose 7/8 - - what i see them struggling with is they are working the way they always have worked and one of the vintages from india or china but they have villages in their own countries so they are used to that messiness of rapid development. we reduced to that in the 1890's but it has been a while. >> but for two generations so can you talk about those challenges?
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>> what do i say? [laughter] but there are lots of little challenges and to power through them and the question ended say good one to stop and think about it as they come from different countries they are funded it ubique is with balance sheets. the american accompany has a balance sheet of loan reading the of rules are a little bit different. but not to focus on the product. said you could start from how do i incorporate this company?
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so with 40 schaede inch volatility and then you have a quarter. it is brittle to compete but these are people taking your posture. but sometimes i don't speak the queen's english. but they execute you know, where you can bring. and we see that over and
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over. and to realize they will be the generator for the future. >> that is a challenge you cannot change your rules on businesses. >> that is one of the challenges. >> absolutely. [laughter] >> it is very important to have that certainty we're at the ted thousand ft certainty. >> did it is certainly a process because it is uncertain because the companies don't know but they know how to engage to
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get their voice is heard where in some of african countries they're not clear about the process. we have a situation rainout in nigeria with no cabinet. who makes the decision of who was it coming from the move makes a profit where is our voices heard? >>. >> i wanted to do touched upon free being and starbucks. we in america have ted led to believe that africa is a continent that set a has drifted policy-making now
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$50 billion with the ideal conditions for farthing with washington d.c. importing lobbies. so how to reach age that their death about the investment opportunities? spee starbucks pays coffee cooperatives and between 30 to $58 a pop so attuned the other side that africa captures more value. >> on the first one started in to save more interest in agribusiness. part of that comes from a larger market view they you
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don't have to just subject '02 agriculture but it is a consuming class that is growing to buy the food right there. i have been talking to private equity firms and agricultural investment. so all the way through greenfield with the land availability issues. i tend to find investors more interested that don't want to do a the hard work upstream but hopefully if there is that demand we will see more. >> one more question.
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>> the of the question what to ask is if there is always a daunting challenge it has bed very off-putting to investors. >> annette is one of the things that concerns us. >> i talked about the culture embraced top that with due diligence. said day that style that we go through this to spend a couple of hours.
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these many obstacles that show up. really it is time to figure out to understand what they're doing. for the right reason or the wrong reason you will keep running into this. but that israel still. a lot of that nature you can find the right people but if you are afraid of corruption
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that includes this one. and i cannot connect a response to your question about what we should do but i think my response to the first part is a we should do but one of the things that we talk about in terms of the rising middle class. with the upward to ability and only hope to demand there is greater transparency and with the
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people that we profiled that now reports and all these things in nigeria and idiocy politicians with stories were people have gotten fired. there is a lot more push back then with the market in those and have higher traded currencies. and with the annuities and investment portfolios with that issue of corruption in with our $20 million was space with the trend of the african continent end with
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these issues. >> by this same way. the election of 1900 and then to have that same process. >>. >> we are having too much fun. >> if you look at the crystal ball. >> what should we be looking at? >> than the talk about and a
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map of the world. and africa of buses and resized. that tell a schumer we should invest. >> it goes back to nigeria as a bellwether. especially with attacks or consumer goods. and the sheer population numbers that we talk about this but you can scale that up on a revenue basis. with the first african billionaire or billionaire on the cover. so i think in nigeria and
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technology and solving business problems one that we've talked about that are focused on to hear about those creative industries of the partners is a company we had up on the slide. . .
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>> you've got the minute. >> i'm bullish on sectors related to construction. infrastructure and construction in africa are going to be growth industries for 50 years 100 years, and so things like paint factories, hinge factories, all the things, everything you need for construction on a day-to-day basis, i think are going to be fast-growing companies. and i also am bullish on ethiopia. it's a very large population and they're moving quickly, implementing a very aggressive i infrastructure plan -- aggressive infrastructure plan including the first light rail opening up. so i'm very, very bullish on ethiopia. >> as we say we barely touched


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