Africa is the ideal breeding ground for the world’s next wave of super entrepreneurs. The continent is set to grow, on average, by more than 5% for decades into the future as sensible economic policies unlock massive natural advantages. Coming off a low base also helps. In this week’s Rational Alternative column for the Financial Mail, I looked back at the last time history provided any geographic region a similar opportunity. On the back of economic growth averaging 4.4% over 42 years, that society produced many billionaires including five of the seven richest men who have ever lived. Why should Africa be any different? – AH
By Alec Hogg*
A publisher told me 10 000 new business titles are born every year. Only a fraction have any impact. Advertising entrepreneur Reg Lascaris’s just released autobiography deserves a place among the rare winners.
“Lessons from the Boot of a Car” is insightful and timeous. Joyfully written, it is the story of an entrepreneur bootstrapping his way from a knocked up Toyota to the summit of his sector. In plain language with practical suggestions, those willing to listen will learn much from the experience of one who’s been there, done that. A book that delivers on generous cover praise from its impressive endorsees – Ramaphosa, Joffe, Kruger, Binedell, Dabengwa and Brozin.
Lascaris shares the fun and fear of running a start-up. Tough, scary even. But exciting and often hugely rewarding. It will encourage frustrated corporate animals thinking about jumping into the outside world. And, once they do, wondering why it took so long.
With a bit of luck, the book could help trigger the next African Rockefeller, Carnegie or Ford. They’re coming. The continent has never been quite so supportive for business builders.
A few years back, Forbes magazine drew up a list of the biggest billionaires who had ever lived, the richest people in history. After adjusting for inflation, John D Rockefeller, creator of Standard Oil, topped the list at $318bn in today’s money – over four times that of the richest person alive, Mexican telecoms magnate Carlos Slim ($73bn).
US Steel’s billionaire founder Andrew Carnegie, a one-time Scottish Bobbin boy who shipped through Ellis Island, is second at $298bn. Another three Americans are among the top seven on the all-time rich list – William Vanderbilt ($231bn); Andrew Mellon ($289bn) and Henry Ford ($188bn).
Only ill-fated Tzar Nicholas II ($253bn) and the Nizam of Hyderabad, Asaf Jah VII ($211bn) prevented a Yankee clean sweep.
These five super-wealthy Americans were born within 42 years of each other starting with Vanderbilt in 1821, ending with Ford in 1863. They made their money between 1871 and 1913, a period when their Republic posted average economic growth of 4.4% a year.
Fast forward to modern Africa.
Roughly 15% of mankind live on the continent. Between them, these billion souls possess under 4% of the world’s wealth, a legacy of poor political leadership and misguided economic policies. But that is changing. Fast.
During the last decade six of the ten fastest growing nations were African. The continent is likely to provide seven of the current decade’s top ten. As democracy has spread and sensible economic policies introduced, Africa has flourished. It also helps to begin from the global basement.
Every investment analyst knows that, given time, all things revert to the mean. In global economic terms, once playing fields are levelled, wealth is distributed according to population. Especially in a networked, interconnected world.
Many believe Quantitative Easing is a flimsy dyke delaying the inevitable shift of wealth from West to East. The US and Europe each house 5% of people on earth, but each have a quarter the world’s wealth – five times their “reversion to mean” number. Africans, by contrast, currently own less than a quarter of their natural share.
The average continental growth rate is over 5% with a third of Africa’s 54 countries above 6%. That’s likely to stay this way for decades.
Since 1960, Asia’s share of global wealth has jumped from 15% to 40%. Asians account for 60% of mankind. So further wealth creating upside exists for the Chinese, Indians and Indonesians. And their entrepreneurs.
But in relative terms, pickings will be juicier on our continent. An African wave of super entrepreneurs is in gestation. They will come from those who walk among us today. Inspired in various ways. Some, doubtless, by Lascaris’s excellent book. Even though he never made the billionaire bracket, Lascaris’s advice could well help create a few.
* Alec Hogg is a writer and broadcaster. He founded Moneyweb and now runs biznewz.com. This column was published first in the Financial Mail.Â
