Finding Purpose in Africa

By Rachel Richez

helen hai was thrilled to be visiting Beijing all the way from Changchun， a major city in northeast China， with her father promising her they would stay at one of the poshest hotels in the capital as her birthday treat. But when the receptionist at the five-star hotel told him it would cost $100 a night， his face fell. “Its too expensive，” he said， dragging his daughter out.

For the majority of Chinese in the 1970s， the tariff was too expensive. According to the World Bank， Chinas GDP per capita was only $154 in 1978， less than one third of Sub-Saharan Africa.

As she looked back at the lobby of the hotel her father couldnt afford， the seven-year-old thought about the world in her own country that didnt belong to her， that she could never enter. A world that only foreigners seemed to be able to afford.

Off the beaten path

Thirty years later， China has become the second largest economy in the world and Helen Hai is a high-profile businesswoman. Two years ago， she founded the Made in Africa Initiative， an organization that provides knowhow to industries seeking to relocate from China and other economies to African countries. It facilitates“triangular collaborations，” bringing together Africas comparative cost and geographical advantages， Asias manufacturing knowhow and the global market.

Hai started the initiative because she longed for more. “Before the age of 30， my life was like that of a typical Chinese girl born in the late 1970s - fulfilling my parents dream， which was to get a good job in a global corporation and then climb up the ladder. But after achieving a very high position， I started to think that in life there is [not only] achievement but [also a] purpose.”

Sent to England to study actuarial science at 17， followed by a career in the London corporate world， Hai came back to China in 2007 as the chief actuary for the insurer Zurich Financial Services. Though thrilled by her professional success， she longed for more and decided to take a sabbatical. At first， she considered creating a shoe brand and met Zhang Huarong， Chairman of Huajian， one of Chinas largest shoe manufacturers.

Zhang had been invited by the then Prime Minister of Ethiopia， Meles Zenawi， to invest in the country. That was how Hai found herself traveling to Ethiopia as an adviser in late 2011. During the trip， she stayed at the Sheraton Addis Hotel and what she saw there brought back her childhood memory.

“When I looked around， I didnt see any local people. What went on in my mind was that outside the big gate of the Sheraton， there must be a lot of young girls thinking exactly like I did 30 years back. In their mind， the beautiful Sheraton was a world that did not belong to them. But what they didnt know was that if their country could capture the right path of development， their life would change dramatically.”

At the end of the trip， Zhang decided to invest in Ethiopia and Hai was asked to set up the operation from scratch.

“It took me three months， from design to investment， to actual production and to export. At the end of the first year， I recruited 2，000 local workers. By the end of the second year， I recruited 3，500 local workers，” she said.

The success of the operation made the Ethiopian Government appoint Hai their adviser for industrialization and investment promotion.

Following the development theory of Justin Yifu Lin， former Chief Economist of the World Bank， Hai decided to promote African development. The theory attributes Chinas economic transformation in the early 1980s and other economies in the 1960s fundamentally to capturing the window of opportunity during the relocation of industries. These economies courted the relocating industries which enabled them to create millions of jobs.

“Now， after 30 years， China is about to relocate 85 million jobs，” Hai said. “This is a golden opportunity for Africa because if Africa can capture this， it can enjoy the same economic transformation.”

Showcasing Africas advantages

To make it possible， it is a priority to improve Africas image in investors eyes. Hai believes this can be managed by improving the “information asymmetry.”

“Investors outside Africa dont know anything about African countries. Before I went to Africa， what did I know about Africa？ If youd asked me for a few words， I would have said war， disease， corruption and safari. Because thats the Africa we know from the BBC， from CNN， from all the media.”

To challenge this image， Hai shares her African experience in investment forums around the world. “I worked very closely with then Ethiopian State Minister for Industry [Tadesse Haile]； I would call him at 10：00 in the evening. He would have a very busy schedule the next day， but he would meet me at 7：00 in the morning in his office to try to understand my problem. So for me， yes， there are a lot of problems in Africa in the early stage but if you have a minister willing to come to office earlier than the cleaner， that means a lot.”

The Made in Africa Initiative helps African countries discover what their comparative advantage is and provides them with the Asian manufacturing knowhow needed for industrial development. Hai says competitive labor is the advantage of many African countries. In addition， some have treaties with the United States and Europe that allow them to enjoy zero tariff on many imported goods.

“This is a big advantage because by shifting their orders from China to Africa， buyers in Europe and the United States can immediately enjoy up to 30 percent savings because of those duties，” she pointed out. Finally， geography is also an advantage for the continent， being closer to the European and American markets. The Made in Africa Initiative focuses on “quick successes，” like the Ethiopian shoe factory that got off the ground in three months. “We focused on making quick successes， within six months time [or] one year， so people can really see that it can be done quickly，”Hai said.

Last year， Hai went into partnership with Chinese textiles manufacturer Candy Ma to expand to Rwanda. She says the factory created 500 jobs. The businesswoman has also been a consultant for the Diamniadio Industrial Park in Dakar， Senegal. Impressed by her work， the United Nations Industrial Development Organization named her its goodwill ambassador.

“I am a beneficiary of Chinas economic development and transformation，” is how she sees it. “And now I am actually moving from beneficiary to contributor in African development.”

Helen Hai has found her purpose.