African governments need to harmonise regulations and deepen regional integration if homegrown companies are to expand across borders and compete more effectively, MTN Group Chairman Mcebisi Jonas and MTN Ghana Chairman Ishmael Yamson said.
The executives said fragmented regulatory regimes across African markets are increasing the complexity of operating across borders and limiting the ability of African multinationals to build businesses at continental scale.
Yamson, who chairs MTN Ghana, said the telecom group faces 19 different regulatory environments across the markets where it operates.
“Today, literally every country you go to, the regulatory environment is different. So we are operating in 19 countries, and we are dealing with 19 different regulatory environments. And that is tough.”
He said greater regulatory alignment would allow businesses to focus more resources on expansion and operations rather than navigating different regulatory systems.
“And that means that how much time do you have to think about the business itself?” Yamson called for the harmonisation of laws and regulations across Africa, particularly among the continent’s largest economies.
“So it’s important that we share the idea of harmonizing our laws and regulations across the continent, especially between the big economies, to make sure that businesses can flow from one country to another without great difficulty.”
Regional integration
The executives said existing regional economic groupings provide a foundation for deeper integration, but implementation remains a major weakness.
Yamson pointed to West Africa, East Africa and the Southern African Development Community as existing platforms that could help build a stronger continental framework.
“I think what we have struggled with as regional groupings is making sure that we do what we say we want to do, that when we have agreed the policies, we execute them the way we want them executed.”
Jonas said deeper cooperation among Africa’s largest economies is also necessary, arguing that regional integration cannot depend solely on formal economic blocs.
“I think part of the problem is that if the continent is to be propelled beyond where it is, trade between South Africa and Nigeria must improve.”
He also cited the potential for greater economic interdependence among major African economies, including closer commercial relationships between countries with complementary resources and capabilities.
“There are other areas where we excel and it might be useful for us to start engaging in kind of things like that.”
African companies need government backing
Yamson said African governments should also change how they engage with companies headquartered on the continent.
He argued that African multinationals should receive stronger support as they attempt to expand and build globally competitive businesses. “Because I have worked all my time for non-African multinationals. And unfortunately, governments are more, we find African governments, find it easier to deal with non-African multinationals than dealing with African multinationals.”
He said that mindset needs to change. “We need to change that. Because, you see, we need to understand that together we’ll be bigger.” Yamson said Africa’s limited contribution to global innovation illustrates the consequences of fragmented markets and limited continental coordination.
“Today, how much does Africa contribute to global innovation? Three percent? Just about less than two percent.”
He argued that the continent’s projected population growth gives it an opportunity to create a much larger economic market, but only if African economies can operate more collectively. “By 2050, Africa will probably have about 1.4, 1.6 billion people, equal to the number of the population of China and India.”
“If that population is not harmonized, if that population doesn’t see itself as one continent and act as such, then we will not get the benefit of a China, or we will not get the benefit of an India.”
Yamson said African governments and businesses need a structured forum for difficult discussions on how to build a more integrated business environment. “So I think it’s a very major issue that Africa might deal with. And Africa’s private sector must work with African governments. I think that has been the missing link.”
“We need to bring the African private sector to the African government and have a forum where we can have the difficult conversations. But at the end of the day, we see we’ll be beneficial to both parties.”
