Welcome to another week of Transformational Leadership Series. Today we will look at Leadership and Strategic Planning. A failure to plan is a plan to fail.Let’s consider some facts about the continent of Africa and how strategic planning is crucial to its future development.
McKinsey & Company is the trusted advisor and counselor to many of the world’s most influential businesses and institutions. They have the following to say about the continent of Africa:
Africa’s consumers and businesses are set to spend US$5.6 trillion by 2025 i.e. in the next 7 years. Manufacturing output is set to double within the same period. By 2034, Africa’s working population will be 1.1 billion—larger than those of China and India. Chinese firms have already started moving their production centers to Africa because labour is cheaper. Large companies in Africa tend to grow faster than their global peers and be more profitable.
Africa imports 1/3 of the food, beverages, and similar processed goods it consumes. About 60% of Africa’s global innovation goods, such as cars and chemicals, are imported.
Africa has the world’s fastest-growing population and is projected to account for more than 40 percent of global population growth to 2030. Africa also has the world’s youngest population—more than half its inhabitants are under 20 years old.
By 2020, more than half of African households are projected to have discretionary income, rising from 85 million households today to almost 130 million in 2020.
If you are a leader in Africa (religious, political, business etc.), what do you do with this kind of information? This kind of information is a gold mine to any planning oriented transformational leader. Planning is essential to leadership and development. Leadership and strategic management go hand in hand. Failure to plan is a plan to fail.
Strategic Management is concerned with making decisions about a family, country or organization’s future direction for growth, renewal and transformation and implementing those policies. The strategic management process can be broken into two phases:
- Strategic Planning
- Strategy Implementation
African leaders in both public and private spheres should be working at formulating policies today to guide their countries, organizations, families, etc. as to how they can exploit the opportunities that have been presented.
In the absence of this, multinational corporations will be at the receiving end of the larger share of the US$5.6 trillion to be spend by Africans in only 7 years i.e. by 2025. As McKinsey&Co rightfully state:
African manufacturers can and should target significantly higher levels of local supply. About $100 billion could be added to Africa’s manufacturing output if, manufacturers move decisively to produce more in the global innovation category, as well as more labor-intensive tradable goods, and export these products. Why should Africa import a third of its food and over 60% of Africa’s global innovation goods, such as cars and chemicals.
IMPORTS take away foreign exchange while EXPORTS bring foreign exchange in. Businesses and families in Africa can plan and fill the gap currently filled by imports. Governments can lead the way in these planning efforts.
If African leaders do not rise to the occasion, foreign entities will keep capitalizing on consumer demand and enrich themselves, carting the dividends away out of Africa. Policies should also be formulated to cater for the youth bulge so they can be a dividend and not a catastrophe. Expansion in African household consumption presents a unique opportunity that must be exploited by Africa’s private sector but for this to materialize, it require planning by leadership.
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