Leadership lessons from Africa’s trailblazers

McKinsey 10 Jan 2019 12:00

How five leaders are seizing opportunities and overcoming challenges to build successful organizations in—and a brighter future for—the nations of Africa.

Africa offers growth-minded companies exciting opportunities. Its population is young, fast growing, and increasingly urbanized. The rapid adoption of technology, meanwhile, makes the continent a fertile arena for innovation.

As in any market, there will be losers and winners—some of which are already emerging. This article presents reflections from five of Africa’s leaders. Taken together, their insights illustrate what is needed to thrive on the continent. Nadia Fettah, CEO of Saham Finances, describes the strategic revitalization of the Moroccan insurance company she leads. James Mwangi, the CEO of another financial-services player, Equity Bank, explains how his company has innovated its business model to boost financial inclusion. Aliko Dangote, who has transformed a trading company into a large-scale manufacturer, elaborates on the resilience he’s trying to build into Dangote Industries and how he hopes this will help the company thrive far into the future. Fred Swaniker, founder of the African Leadership University, shows how technology-enabled solutions can unleash Africa’s young talent. Finally, human-rights advocate Graça Machel shares insights about doing well by doing good, through the lens of New Faces New Voices, the network she founded to expand the role and influence of women in the financial sector.

Nadia Fettah, CEO of Morocco-based Saham Finances, has overseen the company’s expansion from a small local firm into a leading African insurance company operating in 23 countries across the continent. Between 2005 and 2015, it increased its sales nearly tenfold, to over $1 billion. In 2016, Saham took its African expansion strategy to the next level: it partnered with Sanlam, a long-established South African insurance company that had also made Africa its major growth focus. This partnership became a merger in 2018, when Sanlam fully acquired Saham in a $1.1 billion transaction, purchasing the remaining stake in the company it didn’t already possess.

James Mwangi, CEO of Kenya-based Equity Bank, built the company with one core purpose in mind: to solve the social problem of lack of access to financial services. Equity Bank was born out of Mwangi’s turnaround of a then-small Kenyan building society, which was converted into a commercial bank in 2004. Today, it has more than 12 million clients in six countries across East and Central Africa, as well as nearly $5 billion in assets and reported pre-tax profits of $270 million.

Maybe our best-known innovation, though, is our agency banking model: Equity Bank has accredited more than 30,000 small retail outlets across the country as bank agents, able to accept deposits, dispense cash, open accounts, apply for payment cards, pay bills like those for power or water, and much more. It took us six years to convince the Central Bank of Kenya that shopkeepers could accept cash as banking agents. But once we did, we were able to multiply our network 1,000-fold. That has really taken banking to the last mile in every village. As a result, banking now competes with sugar and salt as a product. The agency model has assisted in our continued pursuit of demystifying banking. Our agents don’t talk to customers in banking jargon—they use the language of the common man in their environment. We’ve assisted those 40,000 shopkeepers to professionalize: they’ve become owner–managers, managing a bank for a commission. That in turn has distributed wealth across the country.

Aliko Dangote has built one of Africa’s largest industrial firms from humble origins as a trading company started with a small loan from his uncle in 1978. Today, the Nigeria-based Dangote Group manufactures commodities, including cement, sugar, and flour, in massive volumes and has annual revenues exceeding $4 billion. At the helm, Dangote continues to aim high: his new growth projects include the world’s largest single-train petroleum refinery, currently under construction near Lagos, Nigeria’s bustling commercial capital.

For many of our manufacturing businesses, we also generate our own electric power. This is based on the realization that a lack of reliable power has been one of the major impediments to industry in Africa and has caused many manufacturers to fail. Here, too, our vision extends beyond our own operations. For example, we have partnered with Black Rhino, a subsidiary of the US-based asset manager Blackstone, to develop power-generation projects to feed into Nigeria’s grid.

Fred Swaniker is the founder of several innovative educational and leadership institutions, including the African Leadership University (ALU), whose campuses in Rwanda and Mauritius are based on a new model of higher education. ALU students manage their own education, using technology, peer-to-peer learning with classmates, and four-month work-experience internships with partner companies. That enables ALU to provide a world-class education at a fraction of the cost of traditional universities.

You also have to take a strategic role in developing your own talent—to look at talent development as part of your value chain, not as something that is outsourced to the national university system. And to convert Africa’s raw talent, you don’t necessarily need to put people through a full four-year degree. A three-month or nine-month training program could be enough to unlock the skills that companies need. Compare Africa to India. For years, companies in India used to complain, “The universities are not producing the people we need.” So companies like Infosys created their own corporate academies, and they started training and developing their own people.

Graça Machel, an international human-rights and development advocate, is the founder and patron of New Faces New Voices, a pan-African network that focuses on expanding the role and influence of women in the financial sector. The program not only promotes women’s access to finance and financial services but also aims to bridge the funding gap for African businesses owned by women.

Those kinds of audacious goals require a change in mind-set for all of us. Entire industries—and leaders themselves—have to meaningfully transform; it can no longer be business as usual. Development doesn’t happen without transformation, first of people themselves, then of institutions, then of systems. That means we all have to move out of our comfort zones and move to a different level of thinking, operating, and engaging one another. Ultimately, business leaders should see themselves as responsible partners in a national pact for development.

About the author(s)

The reflections of Nadia Fettah, James Mwangi, Aliko Dangote, Fred Swaniker, and Graça Machel are drawn from interviews conducted as part of a broader research effort underlying a new book, Africa’s Business Revolution: How to Succeed in the World’s Next Big Growth Market (Harvard Business Press, 2018), by Mutsa Chironga, a Nedbank executive and an alumnus of McKinsey’s Johannesburg office; Georges Desvaux, a senior partner in the Hong Kong office; and Acha Leke, chairman of McKinsey’s Africa offices, based in Johannesburg. The authors wish to thank Jalil Bensouda and Omid Kassiri for their contributions to the book and this article.

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Equity BankNigeriaAliko DangoteJames MwangiKenya
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