Monthly Archives: September 2015

Africa Business Forum: Technology Revolutionising African Development

My colleagues and I from Trade Division and Irish Aid attended the Africa Business Forum this morning, kindly hosted by Microsoft at their Sandyford headquarters. The event was organised by the Irish Exporters Association and Emerald Freight and was the fourth of five held this year (the fifth will be on 3rd December). Our MC for the event was Sean Findlay of Geoscience.

From the presentations, it is clear that technology is allowing African countries to leapfrog their economic development: put simply, African economies do not have to replicate the 18th century financial institution building that laid the groundwork for European economic development. In many ways, the private sector – broadly defined to include individuals as economic actors – is forging ahead and dragging government development along with them. The clearest illustration of this is in mobile phones: in African countries it is becoming commonplace for more citizens to have mobile phone than bank accounts. This is opening a huge market for mobile banking and payment services: already 500 million Africans have mobile phones. Since many Africans don’t have proper addresses or social security numbers, mobile phone usage is now serving as a platform for governments to catch-up. To this do, governments need big data analytics, the better to know their populations and make plans accordingly for infrastructure and services.

Marketing and Operations Director at Microsoft, Richard Moore, took us through digital megatrends: namely (i) digital mobility, the capacity to work anywhere anytime with your full office capacity online; (ii) social media, which allows for dialogue between companies and their stakeholders including suppliers and customers; (iii) big data and analytics which is now available to SMEs; and (iv) the Cloud which allows for unprecedented speed, scale and cost savings. The long and the short of it is that the digital revolution is the great leveller between large and smaller companies and between countries at divergent rates of development. This opens up literally a world of opportunity for smart companies.

PwC’s Cian Watson looked at the megatrends in Africa. Half of the world’s population growth to 2050 will be in Africa. Its middleclass is now 313 million and as it is the fastest growing in the world. As it grows so does the market for goods and services that the middle classes everywhere expect and demand. Mobile broadband growth 2013-14 was a staggering 43%. Rapid urbanisation is creating huge opportunities in construction. Again he cited technological breakthroughs as shaping the African business environment with mobile penetration now exceeding landline penetration. Kenya, he noted, was a leader in ICT development and a ready platform for companies looking to have a footprint in Africa. The M-Pesa system allows 18 million Kenyans carry out financial transactions every day.

Harcus Cooper of Barclays showed how traditional modern banking such as the Swift system is evolving through technology to serve African financial services. He cited the fact that 40% of Ugandans have mobile phones but less than 25% have bank accounts. John McNamara of Business Cost Management (BCM), told his story of business development from his home in Limerick to a franchise with over thirty offices in eighteen countries, a twenty year scaling made possible only by the internet and the digital revolution. He told me afterwards that the help of our Embassy in Nigeria was crucial in assisting on due diligence when it came to selecting their Nigerian partner.  If you are doing business in Africa or thinking about it, your first port of call should be to Enterprise Ireland but don’t forget to let the relevant Embassy know:  our diplomats want to know and are keen to help.  Details on our Embassy network are here.

On a housekeeping note, the Irish Exporters Association’s Export Industry Awards 2015 is on 13th November next at the Convention Centre: contact vickicaplin@irishexporters.ie for more details.

Eamonn McKee

Director General | Trade Division | Department of Foreign Affairs & Trade |

2 Clonmel Street, Dublin 2

( Tel: +353 1 408 2718 | * eamonn.mckee@dfa.ie | :: www.dfa.ie

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A Visit to EI’s International Markets Week

Earlier this week the Minister of State Seán Sherlock, who has special responsibility for trade at the Department, my colleagues here at Trade Division, and myself paid visits to Enterprise Ireland’s International Markets Week at the RDS. It’s a great event for Ireland’s exporters and potential exporters: they get the chance to meet with EI’s 32 international representatives who cover over 100 markets. I was accompanied by Brendan Flood, Divisional Manager for International Sales and Partnering. It was a great opportunity to meet some of EI’s representatives and indeed some of our exporters. There were specialist desks on global sourcing, capability and mentoring, public procurement, Horizon 2020, and research and innovation. AIB, Bank of Ireland and Ulster Bank were there to offer advice on capital investment.

What’s often most valuable is what generates surprise. I met for example Thessa Brongers who is EI’s representative in Lagos, Nigeria. Thessa said that the Nigerian economy is taking off and will likely enter the top twenty global economies in the coming years. We talking about a market of 170 million people and a GDP of $522 bn.

The GDP per capita income of $3,700 does not really tell you the full story about market potential. Try these instead; Telecommunications and ICT investments in Nigeria from 2001 to 2013 are estimated to be worth around $25 billion. Active lines for subscribers and data went from 96 million in 2010-11 to 127 million in 2013-2014. There are 45 million mobile phones and with wifi penetration across the country a priority, the potential for devices and the software operating them is vast. Don’t forget too that ICT often leapfrogs in African countries because they provide information and services that public systems can find challenging. Years ago on visit to Sierra Leone I was amazed to see smart-card vendors every couple of miles in what was then a war ravaged country.

In Nigeria, the market for pharmaceuticals is estimated to double from $2.3 billion (2013) by 2016: and this is a highly import-dependent market. With twenty one commercial banks and $135 billion in assets, there are enormous opportunities for financial services in the burgeoning market of financial products and insurance not to mention all the software needed for retail electronic banking, secure payments and database management.

At EI’s International Markets week you can move from these macro-economic teasers to grounded discussions with EI representatives like Thessa about whether the market is right for you and if so where to start. And if you decide to enter a market, don’t forget that the Embassy is always ready to help; our Ambassador in Nigeria is Séan Hoy and you can check out the Embassy’s website here. We’ve been there since 1960 so we know a thing or two about the place!

So if you’re thinking of exporting Enterprise Ireland is there to help and our Embassies are open for you too. Think about putting International Markets Week in your calendar for next year.

Eamonn McKee

DG, Trade Division

Department of Foreign Affairs and Trade

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Ireland’s Top Exporters

I attended the launch of the Irish Exporter’s Association immensely useful and user-friendly  Top 250 Exporters 2015 this morning. The Minister for Jobs, Enterprise and Innovation, Richard Bruton TD, launched the publication, noting in his remarks that with our recovery providing the platform and strong growth now powering our economy, we should aim realistically for a return to full employment. We have deeply rooted companies driven by exports that are fostering growth throughout the regions.  With two out of three Irish companies investing in technology, we can see how dominant technology is to our top companies and to our economy.

Minister Bruton noted too that there was a strong entrepreneurial culture developing in Ireland and that the linkages between indigenous companies and FDI companies are intensifying. This is really very significant because FDI was never an end in itself: rather, in providing productive capacity, technological development, exports and jobs, FDI was conceived as a catalyst for the development of the indigenous economy, cut off as we were at independence from the island’s existing industrial base by partition.

The IEA’s Top 250 Exporters 2015 is an indispensable guide to what is going on in the Irish economy. We have come a very long way from the time when Ireland was a largely agricultural economy serving the food needs of Britain’s industrialised cities, often beef on the hoof. Today, the leading sectors in our export drive are ICT, medical devices, life sciences and high-end food and beverages. As the CEO of the IEA, Simon McKeever, noted in his remarks, ICT accounts for 44% of our exports, Life Sciences 32%, miscellaneous 13% and food and beverages 11%. Simon pointed out that there is great dynamism too, driven by acquisitions, with Ireland’s largest company Medtronic moving from 20th last year to 3rd this year on the list; Ingersoll Rand from 35th to 5th; and Activas from 70th to 6th.

Investec has partnered with the IEA in producing this report for the last five years.  In his presentation, Investec’s  economist Philip O’Sullivan noted that Irish GDP is at an all time high.  Exports have been growing steadily, year on year.  Moreover, growth in the “traditional” industrial sector is now in double digits.  This, combined with growth unbroken in the last eight quarters, shows the increasing depth of our recovery as we enter a strong growth phase.

The Top 250 Exporters 2015 is not just a list but a short health report on the export sector, with profiles of the top companies and commentary from, amongst others, the IDA’s Martin Shanahan, Enterprise Ireland’s Julie Sinnamon, Bord Bía’s Aidan Cotter and key players in different sectors.

You can download a copy of the report here.

Best wishes,

Eamonn

Eamonn McKee

Director General, Trade Division

Department of Foreign Affairs & Trade

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