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Lorenzo Simonelli: Fostering a More Sustainable Africa

Following the U.S.-Africa Leaders Summit last week, all eyes are turned to Africa, one of the world’s fastest-growing regions. As economic reports predict acceleration in growth, the sustainability of this growth is becoming an increasingly pressing issue.

 

Growing without consistency will not allow African countries to reach full potential and be competitive in a global economy. As a result, Africa’s partners can play a role by helping to create an infrastructure for lasting and inclusive growth, and empowering African achievement.

That’s when what GE terms “localization” comes in. Before we can talk about strategy, we must acknowledge the difference between localization and local content.

Localization pertains to compliance — many countries have local content laws that require foreign companies to use a certain amount of local labor, materials, and services in their processes. But localization focuses more on capacity building — in human capital growth, supply chain development and partnership with local organizations and businesses for talent and infrastructure development.

To GE, localization is a strategy, not just a requirement. Localization enables growth in the communities in which we work, while increasing our productivity. As a global company, GE has the unique opportunity to have a well-rounded economic impact on the regions where we operate. For the African people, that means hiring local staff and providing development opportunities.

Our efforts can be summed up in three words: grow, build, localize. GE grows through local development and infrastructure support, builds productive partnerships and deepens its local presence.

GE has already made much progress in Africa – we are a multinational company but strive to be local in all of our markets. One of our major priorities is to foster the development of human capital, and we do that through partnerships with local education partners and governments.

For example, GE has partnered with the African Leadership Academy to give out scholarships and provide professional development opportunities to African students. GE in Nigeria is empowering girls, together with Four Pillars Plus, by offering support financially and through mentoring. And to develop young leaders, GE has established programs such as the Early Career Development Program to foster engineering talent. Most recently, GE Oil & Gas has committed to giving $60,000 in school supplies and skills training to local students in Angola.

Supporting and growing local supply chains with special focus on developing local partners — especially small- and medium-sized enterprises — also will have a multiplying effect on investments across Africa. As GE partners with local companies, supporting tech transfer through manufacturing process improvements, training and management engagement all help to support and grow local innovation and entrepreneurship.

For example, just last year, GE unveiled plans to build a multi-modal facility in Calabar, Nigeria. This plant will generate 2,300 new jobs in Nigeria — 300 directly and around 2,000 across the supply chain. Management and staff of that facility will be 90 percent Nigerian. Investments like this lay the foundation for knowledge and technology transfer to Nigerian sub-suppliers, academic institutions and people, which leads to greater development of in-country capabilities.

This new facility illustrates GE’s willingness to double down on investment in the region and take risks. Training the next generation of workers and growing local enterprises is critical to our continued success.

The results of our localization efforts are encouraging: GE has tripled its revenues in Africa since 2011, and we now have more than 2,300 employees in 30 countries. We are seeing a positive impact in communities and we continue to forge productive partnerships with local organizations.

Localization is one of the biggest growth enablers. With this attitude, we are helping Africa build a future of increased — and sustainable — growth.

Lorenzo Simonelli is President and CEO of GE Oil & Gas.

 

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