As Africa continues to draw increasing attention from global powers, experts believe the continent’s relationships with countries like China and Japan must evolve.
Bernard Laurendeau, Managing Partner at Laurendeau & Associates, believes this growing interest presents a huge opportunity for the continent. A management consultant and former CEO of one of Ethiopia's first fintechs, Laurendeau now works with Japanese businesses considering setting up hubs in Africa.
He highlights the need to carefully navigate multilateral and bilateral relationships, stressing the importance of selecting the right partners for growth. With his professional background, his focus is on the financial services, technology, and consumer goods sectors, as he remains keen to tap into the continent's growing middle class.
In this interview with Techpoint Africa, Laurendeau discusses the opportunities, challenges, and his vision for fostering stronger ties between Japan and Africa.
This interview has been edited for length and clarity.
How do you view the current state of Africa's relationship with Japan?
When you look at Africa, I think it's getting a lot of interest from different continents, countries in the Western world, but then, I think as an African, it's important to decipher which relationship, whether it be multilateral or bilateral, is going to be good for us.
From an African standpoint, when you look at some of these bilateral opportunities, I feel like China definitely has given a lot to our continent. They've taken a lot as well, but it's been mostly a win-win. In terms of technology or knowledge transfer, maybe sometimes it's not really a win-win.
However, when you look at the Japanese side of the house, there's kind of an "I'm not going to get into your kitchen" type of approach.
Number two is that there is this will to help. Of course, everyone is a businessperson, but I think deep inside, the idea is also to transfer that knowledge, and of course, it's up to us to take that knowledge.
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Finally, and most importantly for me as an entrepreneur, it's crickets when it comes to Africa/Japan bridge building from a business and investment [point of view], so there's a big gap.
What industries are you interested in as you look to build synergy between Japan and Africa?
Let me start by painting the full picture, and then I can zoom in and tell you what we're interested in.
Obviously, there's the classical automobiles, electronics, and trading [companies]. When I say trading, this is somewhat a unique type of company that they have here in Japan, and they call them the sogo shosha [and] they are these massive trading companies that trade everything.
Warren Buffett is a big fan of those, and he invests massively in them. The reason I bring up Warren Buffett is to illustrate the fact that these are pretty strong companies. They do boring stuff. It's not AI, nothing sexy, but it's just pretty steady stuff.
But for us, that's not our forte. I come from a management consulting and digital background, and you can only give what you have. What I have is really from a financial services angle, the consumer goods aspect, and then tech in general. It could be outsourcing or even software development.
But if you ask me why these three categories, I think with the middle class that's growing in a lot of the countries, especially the big four, there could be really good knowledge transfer and technology transfer on these things.
One of the challenges of doing business in Africa is the absence of data. How do you help these businesses find the data and make sense of it?
We've partnered with Kasi Insight, and they're doing something that's very solid, very unique, I think, in terms of data. They're really going after the hardcore consumer, disaggregated data that you won't really find on any portals.
Most of the data coming out of Africa is coming from the International Monetary Fund (IMF) [or] the World Bank, but a lot of the data that they have is really macroeconomic data, and in some cases, they'll dig a little bit deeper. They may have labour data, but even that is usually pretty rare and usually ends up being more of a mirage or a complete falsehood.
And the reason why I say that is to segue into my next point, which is that a lot of these companies, whether it be Japanese or others, make decisions, sometimes very strategic and important decisions based on this false data.
For instance, the last falsehood that I listened to very recently was that manufacturing labour in a lot of the African countries, not engineering, is much lower in India than in the whole of Africa, and for me, I'd be really surprised to see that this is true because I know, for instance, how much it costs in Ethiopia to hire manufacturing labour.
So Kasi Insight has this really disaggregated data that's real-time, but on top of that, and this is where it gets even more exciting, they have the ability to forecast these trends. Of course, only God has the truth, but this is the type of data that will be much closer to what's really on the ground in these countries and even regions within these countries.
In what specific ways do you help the businesses that you work with?
We're in the business of helping these clients come and do a better job at operating and scaling their operations on the continent. What we recommend to them is to do their homework ahead of time.
And so we actually have it in four stages. We have the stage that we call the design and simulate. So you want to see from not just a data standpoint but from an intercultural management standpoint. I'll give you an example. There are some companies from Japan that go to India, and in Japan, by the way, there's no such thing as a labour union, but they go to India and then they realise, "Oh man, we have to handle relationships with labour unions. No one gave us the memo."
In some cases, if that intercultural management aspect is a no-go, then that's it; you don't move to the next step. But if the data looks good, then we go to the build phase, and we help them build a prototype from a business standpoint.
Once they build the prototype, we help them simulate again and test all their assumptions. Once they're ready to deploy, we can also help them deploy again in a small-sized approach and then at scale.
The financial services sector is a key interest area for you. Can you share the specific sectors that you're interested in?
I use that term [financial services] really carefully because I know that in some countries like Egypt and maybe Nigeria, banking is now in your rear view mirror and you're working more on maybe lending or insurance.
But for instance, in Ethiopia, I think everything still needs to be worked on. The banking sector is still behind. So really, it's about banking. I was telling you that we need the technology/knowledge transfer, and obviously, the sector has grown compared to 30 years ago, but still, there's a lot of work that needs to be done in Ethiopia.
It could also be hardcore lending or digital lending. There is a lot of work that needs to be done. And then, of course, insurance. Insurance is very important too. And by the way, that's how you slowly unlock patient capital that you can deploy into startups.
I'm sorry to point the finger at you guys in Nigeria. You guys are raising a lot of money for the startups, but most of the capital is coming from Silicon Valley. We should be proud, but at the same time, it's something that we should all be looking at each other and be like, "Where is the local capital?"
