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Africa: The land of opportunity

Despite phone hacking scandals back in the UK, prime minister David Cameron and a plane-full of British executives touched down in South Africa and Nigeria last week, hoping to promote British expertise on the African continent.

Among the bankers and investors were bosses of Britain’s top consultants including Mott MacDonald chairman Keith Howells and Turner & Townsend chief executive Vince Clancy.

Cameron described South Africa as “a gateway to a new economic future” for Africa and pledged to double bilateral trade by 2015 during a press conference in Pretoria as president Jacob Zuma looked on.

“There is a huge opportunity for trade, for growth, for jobs, including jobs at home in the UK,” he said.

“The visit comes at a time when Africa is changing. Last year, Africa’s economy grew by nearly 5% and six of the 10 fastest growing economies in the world are African.”

The fact that Africa is growing is not new to consultants and engineers that have been focusing on the continent for years.

Clancy was on the trip, which was shortened as the phone hacking scandal drew the prime minister back to London.

He told NCE in February that Africa was top of his fi rm’s global expansion priority list.

“Africa has exploded in the last five years and continues to do well,” he said. “We are keen to expand in Africa, and are looking at various ventures over there.”

Clancy’s managing director for Africa Ian Donaldson says that the firm is “spreading its wings” in Africa.

He says the firm is actively heading north from South Africa into countries such as Uganda and mineral rich Democratic Republic of Congo, Gabon and Zambia.

He says opportunities have dried up in the UK and it only makes sense to spread resources to places that are growing.

” The UK a couple of years ago was so hot from a project point of view, and back then we were finding it hard to find resources and it was hard fulfilling obligations to clients.

“It’s not the same space in the UK anymore and, it’s the first time in T&T that we have achieved more outside the UK than in.

Africa is one of those places.

“It’s a big geographic mass, it has a lot of potential in a number of sectors, it has wealthy natural resources, and there is a lot of expertise in the UK that can be used here.”

However, Donaldson believes that although T&T is a global company, it cannot just plonk people into Africa from other markets - they must have local experience.

“One of the biggest barriers is identifying the right opportunities and where you put efforts. What people say is there is a lot of noise in the system.

“This means you could have 15 opportunities but only five that are good, so you really have to interrogate the integrity of the opportunity and understand what’s good and what’s thrown out.

“So as soon as possible you need to have a local propensity. You cannot operate on long term basis, and you’ll end up pricing yourself out if you don’t.”

Howells agrees that getting resources right is a challenge.

He says that Mott MacDonald used to have a strategy of using British expertise by simply relocating employees.

But this simply doesn’t work anymore.

Mott MacDonald has been expanding in southern and eastern Africa.

But Howells says Nigerian president Goodluck Jonathan has also made a good pitch for expansion there.

Former Goldman Sachs International managing director Olusegun Aganga has just moved from finance minister to trade minister, and Howells hopes that is a sign that corruption is being tackled.

“I think we’re not quite ready to set up in West Africa. It’s probably a year or two away and how this government [of Nigeria] shapes up will be a deciding factor,” he says.

Patrick Dominy, director of EC Harris subsidiary ECH Management Solutions Africa, says that of more concern is low investor confidence - a global problem that is now hitting Africa.

“Along with that are local level timelines that drag on beyond the realms of possibility, coupled with a low deal flow that make it difficult to get involved in the projects.”

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