A tale of two conferences

At Indaba in Cape Town, one of the world’s largest mining conferences, I met an unusual delegate. Amidst all the mining executives, engineers and government representatives discussing the resources industry, there was Darren Beazley, an executive with the AFL’s Fremantle Dockers.

Why was a sports official at the one of the southern hemisphere’s major mining events? His purpose was two-fold.

Firstly, he was there to help boost the AFL’s contribution to social development in South Africa. The Fremantle Dockers were playing Carlton in a pre-season game in the lead up to Indaba, and Fremantle had been helping to develop some of the townships North West of Pretoria which serves as the Dockers’ development zone.

The AFL has already sent Kevin Sheedy (the game’s global ambassador) and indigenous icon Michael Long to South Africa and the league has also run a successful Auskick program in South Africa (known as footyWILD) that has helped health and development in the townships (reducing smoking rates).

Australian entrepreneur Andrew Douglas, who was heavily involved in the FIFA World Cup in South Africa this year has helped drive the footyWILD program along with Corporate Social Responsibility (CSR) programm for corporates in South Africa.

Secondly, Beazley was there to do business, as the second WA club, and a somewhat poorer cousin to the West Coast Eagles, Fremantle looks to the resources industry for sponsorship and Indaba is a great place to do it, with the cream of the world mining executive talent present, not to mention about half of Perth’s business community!

Speaking of Perth, recently I spoke at Indaba’s equivalent on the other side of the Indian Ocean, ‘African Down under’ which is regularly hosted in the WA capital. The annual conference – the brainchild of Paydirt’s founder Bill Repard – just keeps getting bigger and bigger and investors from all over the world from London, New York, Canada and the ‘BRICs’ (Brazil, Russia, India, China), come to Perth to get a feel for trends and insights into African resources and to do deals.

Of course, hosting a conference about the African mining sector in Perth makes a lot of sense. After all, Australia is the biggest investor in African mining exploration after South Africa itself and Canada. As well as Australian involvement in African mining projects, which is estimated by EFIC to have risen from just over 50 in 2003 to 160 now (including 20 ASX listed companies) and be worth over $20 billion, the numbers of Australian companies exporting to Africa overall is also expanding.

According to research by Austrade and the Australian Bureau of Statistics, while there are over 2,104 Australian companies exporting to South Africa, which is the main hub, other leading markets are Mauritius (368 exporters), Ghana (382) and Kenya (333). According to Greg Hull, Australia’s Senior Trade Commissioner for Sub-Saharan Africa, based in Johannesburg, “We recently expanded our African network by opening offices in Accra and Nairobi. There’s real critical mass forming for international companies in those parts of Africa and we wanted to make sure that Australian companies were getting an opportunity to be a part of the action.”

As well as the strong mining presence, Hull points to other sectors in Africa that Australia has a strong presence in, including infrastructure, professional services, education (particularly the TAFE sector) and event management including, of course, the recent FIFA World Cup in South Africa.

In fact, both Andrew Douglas and Australian entrepreneur John Elliott played an important role in managing the entertainment precinct (the big screens, the big wheel and associated attractions) at the Victoria and Alfred Waterfront in Cape Town during the World Cup and will soon be exporting their expertise to Brazil for the 2014 World Cup and the Rio Olympics in 2016.

Australia’s economic engagement with the new Africa was the key finding of a seminal paper by EFIC chief economist Roger Donnelly and his colleague Ben Ford for the Lowy Institute which was published in 2008. As Donnelly put it at Africa Down Under, “In terms of economic engagement, before the global financial crisis, Africa seemed to be surprising us all on the upside. And in fact, over the decade to 2008, Africa was the fastest growing continent in terms of Australian trade flows.”
But while the intervention of the GFC has caused some drying up of capital globally that has affected Africa, the continent has had an increase in FDI stock of US $323 billion in 2009 over the year, with South Africa experiencing the highest increase of 84%. And in terms of trade, South Africa is the main African export destination for Australia (19th overall) and the main destination and source of FDI. In addition, South Africa is an important destination globally for exporting small- and medium-sized enterprises (SMEs), with South Africa in 7th place, (after New Zealand, UK, USA, ASEAN, China and Hong Kong) but regularly making the top 10 for exporting SME destinations.

So while Australian exporters and investors were ‘Out of Africa’ for a while, as both the evidence and the strong Australian presence at Indaba and Africa Down Under seems to illustrate, they are now truly back in.

Interestingly, the Fremantle Dockers again had a role to play at Africa Down Under as they did at Indaba. While I was in Perth at Africa Down Under, I heard on the ABC, that U2 was in town and Fremantle Dockers fans were having trouble getting tickets (for a rare home final against Hawthorn) because the phone lines and web were getting jammed from Western Australians wanting U2 tickets.

It got me thinking, when we hear about Africa we often think about aid and poverty and the efforts of U2 front man Bono (real name Paul Hewson) and his fellow celebrities like Bob Geldof and Angelina Jolie who use their high profile to keep the world thinking about Africa. But the more I thought of it and the choices of the Western Australian public who had to choose between seeing U2 and the footy, the more I thought that we also need the Fremantle Dockers as well as the Bonos of this world. They’re not flashy or high profile (like their more glamorous neighbours, the West Coast Eagles) but they are hardworking, effective, and are doing their bit to help reduce poverty in Africa by helping with economic and social development in the communities, just as Australian exporters are doing in Africa.

They are under the radar, but they are there working nevertheless. So in short, whether at Indaba or Africa Down Under, Australian exporters may not be like Bono but they can certainly be like the Fremantle Dockers.

Postscript: the Dockers won only their second final over Hawthorn to the delight of their supporters.

Tim Harcourt is the Chief Economist of the Australian Trade Commission.