Why African business looks to China

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Ma visited Africa for the first time in 2017, and returned a year later with a plan. The Alibaba founder was in Johannesburg this week, officially launching the Netpreneur prize, a $10 million competition for African tech innovators. Administered through Ma’s foundation, the prize is meant to “further [Africa’s] digital economy through local entrepreneurship.”

From next year, the competition will host an annual pitching session (pdf), awarding $1 million in prize money over ten years. Even Ma admits, that compared to similar programs, $10 million doesn’t seem like much, but the significance of the Netpreneurs program is that it highlights the parallels between Africa and China.

To inspire the young entrepreneurs in the room, Ma drew on his own story of trying to launch an e-commerce company on achingly slow bandwidth in China 19 years ago. He recalled trying to register an internet company when the concept itself seemed unfathomable. Looking at Africa today, he sees a similar environment.

“This is where I see Africa, full of problems, but full of opportunities,” Ma said in an auditorium at the University of the Witwatersrand, where he was the keynote speaker.

China’s investment in Africa has long invited debate on the motivations of either side’s embrace of the other. Books, documentaries and thousands of think-pieces have been produced, scrutinizing the factors in this relationship, from raw materials to few regulations, and just who gets to benefit. There are no easy answers, but Ma’s speech captured what is perhaps the simplest factor encouraging this relationship: that Africa could be what China is today.

Alibaba’s rise signifies China’s, and the potential of African entrepreneurs. As a teacher, Ma founded Alibaba in a cramped apartment in Hangzhou. They couldn’t find engineers and they could barely raise capital, Ma told the crowd. Researchers writing the Alibaba case study dismissed the company when comparing it to the likes of eBay.

Of course, Alibaba’s growth wasn’t as simple as Ma’s motivation suggests, but it tells the story of a digital company built in an adverse environment, not unlike Africa’s nascent digital economy today. With the right vision and hard work, said Ma, you could have ten Alibabas in Africa: “Doesn’t have to be $500 billion, $50 billion is fine.”

“This continent is very simple, if you’ve been to Europe you know how complicated it is, they want too much,” Ma said, referring to the developed world’s laws and regulations. “Here you have nothing to change.”

The continent’s most important resource is its young people, which is why Ma was eager to share that he’d called South Africa’s president Cyril Ramaphosa to encourage him to support young entrepreneurs. Still, waiting for the government to create the perfect business environment would be a waste of time. “We startups,” Ma said without irony, just need an open environment and trust to create jobs. Degrees from schools like Harvard and MIT weren’t necessary either: “Those are the white-collar guys, they’ll never be entrepreneurs,” Ma said to rousing applause.

And in a few years, when African businesses have achieved this potential Ma so believes in, Alibaba will be there. All they’d need is a small 0.1% he said, his speech ending to a standing ovation.

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