Africa is often portrayed by the media as underdeveloped, unsafe and an economic backwater. A simplistic and stereotypical view has been created and it is no surprise that some companies are still sceptical about investing in Africa, especially when it comes to intangible assets such as intellectual property (IP).
In addition to crime and corruption, which are prevalent in all countries across the world, poor infrastructure in some African states leads to further disinclination to invest, resulting in Africa more often than not being mistakenly overlooked.
Africa is, in fact, a gem with a booming economy. The IMF has declared Africa as the world’s second-fastest growing region. Ghana’s projected economic growth for 2019 is 8.79%. Rwanda is projected to grow at 7.8%, Ethiopia at 7.7% and Ivory Coast at 7.4%. Africa’s average GDP growth has consistently outpaced the global average and, not surprisingly, the world’s fastest-growing cities will be in Africa within the next 16 years, according to the World Economic Forum (WEF).
Africa is a powerhouse when it comes to the world’s natural resources. It has roughly half of the world’s manganese deposits. The Democratic Republic of Congo possesses half of the world’s cobalt. Ghana is the world’s second-biggest producer of cocoa, and with the discovery of new oilfields it could become one of the biggest oil producers in Sub-Saharan Africa. Five of the top oil producing countries are in Africa, not to mention the huge gas field discovered off the coast of SA which may hold more than 1-billion barrels of total resources of gas and condensate.
Further untapped potential for sustainable economic growth lies in the use of the ocean’s resources, or the “blue economy”. With 38 of Africa’s 54 countries being coastal, and most of the continent’s trade conducted by sea, the opportunities for economic growth are tremendous.
In sectors such as energy, agriculture, water and mineral processing there are great investment opportunities available. According to the WEF, agriculture is projected to be a $1-trillion industry in the Sub-Sahara by 2030.
Lastly, and perhaps one of the most impressive and promising sectors which remains a key focus area for many companies, is the financial sector. According to Forbes, Sub-Saharan Africa is one of the fastest-growing investment zones for financial technology firms. Thanks to the hugely successful mobile banking service “M-Pesa”, launched in 2007, which allows its users to store and transfer money through their mobile phones thereby making transactions easier, safer and more accessible. In comparison, Apple Pay — a similar concept — was launched in the US only in 2014.
Financial technology, or fintech, has not only made banking easier, but has created partnership opportunities between mobile network operators and banks. Financial inclusion is moving the population towards being banked, rather than unbanked, and for that reason cryptocurrency and its blockchain technology are worth keeping an eye on.
Companies have started realising that intangible assets such as IP can be worth more than tangible assets. Almost every company has valuable IP that must be protected and for that reason the key factors to take into consideration are where to invest and how best to protect it.
The first thing a company must do to protect its IP is to register it. In Africa there are different systems in place when it comes to protecting IP. In an attempt to facilitate IP protection, many African countries have formed regional systems whereby a single application can result in protection in multiple countries. There are two such regional systems in Africa, OAPI and ARIPO, and each system has different member countries.
The OAPI regional system manages IP applications in mainly francophone countries. It has 17 member states and, as all member countries have renounced their national patent legislation, a single application automatically covers all the member countries. OAPI has established a more unified system for the protection and administration of IP.
ARIPO manages the IP applications in mainly anglophone countries. Ten member countries have joined in respect of trademarks and 18 have joined with respect to patents. The member countries that have joined ARIPO have retained their national patent legislation, accordingly it is possible to designate individual member countries when filing an ARIPO patent application. ARIPO has been in partnership with the World Intellectual Property Organisation (WIPO) since its establishment in 1976 and works incredibly well. ARIPO is fast, efficient and reliable, making it an attractive option when looking to register IP in one or more of the ARIPO member countries.
To ensure future profits and increase their value, companies must protect their IP in Africa. However, to reap the benefits of this powerhouse, companies must be pragmatic and astute. What works in one country may not work in another and, despite the regional systems in place, not every country has signed up, such as Ethiopia, Nigeria and SA. Furthermore, some African countries are not members of the Patent Co-operation Treaty which means that patent protection, for example, can be obtained only by way of a national filing.
There is no doubt that IP protection in Africa is complex and difficult to navigate, but when intangible assets such as intellectual property can represent a significant portion of the value of a company, it is essential.
Many still believe that Africa is a sleeping giant, however, I do not believe this to be the case. It is a giant that is slowly awakening, gearing up to become a major global player that is not to be underestimated or overlooked.
• Tomkow-Coetzer is a director of Galloway & Co specialising in IP throughout Africa.
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