What The UN Global Africa Business Initiative Means For Your Company
Africa has the potential to become one of the most important drivers of global business with a $2.5 trillion market opportunity. This was the position held by the UN, announcing the UN Global Africa Business Initiative, further identifying the continent as the “cornerstone of the world’s future”. This conference, which took place on the sideline of the UN General Assembly from September 18-19 2022, provided a meeting ground for heads of African states, UN corps, philanthropists, and members of the private sector to pioneer positive change towards a more inclusive, more sustainable, and more prosperous Africa.
Does this merely concern African businesses?
This plan is aimed primarily at creating a more conducive business environment within the continent, to foster entrepreneurship and help local business incentives thrive, on the way to “Unstoppable Africa”, as the tagline enthusiastically termed the endeavour.
But that does not mean it won’t impact global businesses as well. Indeed, the African continent is full of resources that are not necessarily being fully capitalised upon. That's why this event, aimed at generating funds, was supported by Google, Rockefeller Foundation, and Mastercard Foundation among others, bringing together nearly 100 leaders from various fields like politics and economic development. On top of funding, a pivotal treaty namely, the Africa Continental Free Trade Area Agreement should ease trade, thanks to more flexible borders, whilst also making investment opportunities within the continent easier.
What are the potential benefits for your Global business?
A more open, prosperous, sustainable and business-ready Africa inevitably should start by leveraging two main opportunities to boost local economies, which will undeniably benefit local and global businesses alike:
1. Encourage education and capacity-building for a better-skilled workforce
According to the International Labour Organisation (ILO), young people aged 15-24 years old accounted for a third of the overall African working population in 2020. The same report disclosed an interesting finding on one of the main problems that crops up when recruiting in Africa: the lack of educated and experienced young professionals.
While African unenployment rates are close to normal global unemployment rates with an estimated 12.4 million unemployed youngsters in 2020, it does not reflect the skilled labour available on the market. For this reason, the Not in Employment, nor Education, nor Training (NEET) index was created and shows that 53.5 million young Africans have never had a job, and are not participating in education, nor training, mainly due to low income.
Imagine even 40 million of these young skilled Africans on the job market, elevating standards and driving healthy competition that, in turn, motivates them to learn and better themselves, even further, as key drivers of performance for your company.
2. Widespread telecommunications leads to smooth business-running and remote options
It is the basis of any smooth-running business. Yet, according to the International Finance Corporation (part of the World Bank Group), only 22 % of Africans had access to the Internet in 2017. With a goal of connecting all individuals, governments, and businesses by 2030 through funding, this project is a turning point of African business. It will increase your options for remote work facilities, while facilitating and speeding up business communications, and opening up new, inaccessible, but potentially cost-effective regions.
The hurdles that will remain, and how to overcome them
Slow administrative culture
Specially known for its slow administrative culture, registering your entity in Africa, as well as onboarding and registering your employees with the correct authorities, from labour offices to social security, often comes as a headache.
As an Employer of Record, Africa HR saves you this trouble by becoming the legal employer of your workforce, while handling a complete range of services, from onboarding to payroll, and being the main point of contact between your employees and yourself.
Strict legal compliance, with English and French legal systems
With new matters of government policy come new laws, especially within the framework of this initiative. This might have a widespread impact, from changes in sustainability regulations to a host of business-related laws across various sectors and revenue or employment laws.
Our bilingual teams and legal experts, in each of the 44 African countries we operate in, religiously keep up with the latest legal updates, as your compliance is our duty. While Employer of Record services guarantee legal compliance in terms of labour and contractual laws, Administrative Service Organisation (ASO) services ensure flawless auditing and reporting compliance across your countries of operation.
Complex tax mechanisms
New border agreements and trade legislation often result in amendments to taxation law and formalities, but fear not. Our Payroll services will carry the burden of tax compliance thanks to adequate tools, while simultaneously leveraging the growing connectivity within the continent to offer you state-of-the art payroll solutions such as Employee Self-Service Portals.
