Most students are unaware, for instance, that amid bearish performance of developed stock markets over the past years, several leading African stock markets in Ghana, Egypt, Botswana, Nigeria and Uganda have bucked the negative trend and recorded solid triple digit performance. Since year-end 2001, African stock markets on average have accumulated index returns of 127% in US dollar terms led by Ghana with a whopping return of 564%, which is the highest in the world over the period. These positive trends, coupled with Africa's low correlation to world markets make investment in the region attractive for portfolio diversification.

Naming the Elephant on the Table: A Case for Africa

By Kwame Boateng and Ije Ikoku (April 18, 2005)

One of Wharton's objectives is to prepare students to operate in different environments. As we move towards the future, emerging economies in Africa, Asia, and South America are going to be increasingly influential in the business world and in our careers. Prof. Jeremy Siegel in his op-ed in the WSJ three weeks ago said that "today the developing countries, despite comprising 87% of the world's population, produce less than one-quarter of the world's output measured in dollars. It is likely that by the middle of this century, they will produce over half the world's GDP. Indeed, the growth of these economies will become the dominating factor in the world's capital markets."

With such a backdrop, one would expect Wharton to progress in the direction of this changing business environment. Unfortunately, this has not been the case. The class of '06 will be wrapping up their core curriculum in a couple of weeks, and they are yet to see a single case on business in emerging economies. The class of '05 will be graduating in about a month and they too have very little exposure to issues in currently less industrialized nations.

With the exception of a few features on current healthcare issues, Africa in particular has barely been mentioned in the Wharton curriculum. This represents a missed opportunity for Wharton to further expose students to the increasingly attractive business environment in Africa.

Most students are unaware, for instance, that amid bearish performance of developed stock markets over the past years, several leading African stock markets in Ghana, Egypt, Botswana, Nigeria and Uganda have bucked the negative trend and recorded solid triple digit performance. Since year-end 2001, African stock markets on average have accumulated index returns of 127% in US dollar terms led by Ghana with a whopping return of 564%, which is the highest in the world over the period. These positive trends, coupled with Africa's low correlation to world markets make investment in the region attractive for portfolio diversification.

A collective group of students from the Wharton African Students Association (WASA) have been working with the administration to incorporate cases from Africa into the curriculum. We've identified over 300 cases from HBS, the European Case Clearing House and the University of Witwatersrand, South Africa that could be immediately incorporated into our curriculum. Some examples include Woolworth South Africa's expansion strategy for sub-Saharan Africa, AES's entry into the Nigerian energy sector through a recent acquisition, Anglogold's merger with Ashanti goldfields in Ghana, and South Africa Breweries' purchase of Miller USA as a market penetration strategy. In addition to this case database, a number of WASA members are working with Wharton faculty to develop a case study on a private equity portfolio investment in the region. We plan to make this part of the case readings for MGMT809: Private Equity in Emerging Markets, offered in the spring semester each academic year.

There are numerous examples of emerging markets cases that can be used to broaden the scope of our business education without compromising the pedagogical objectives of the curriculum. A region that will account for over 50% of the world's output deserves more than a handful of cases and class time.

The case for Africa and other emerging countries must continue to be made. There are about 346 students out of 825 in the Class of 2006 who are international, and over 30% of the class has interests in emerging economies. Some of these students intend to pursue business opportunities in these countries. This is an indication that there is a need for the school to place more focus on emerging markets to better equip those students who decide to pursue international ventures.

The Wharton School has a proud history. Business education, which we conceived over 100 years ago, has to change to meet the challenges of the future. Who is better positioned to lead the change in business education than the inventor?

Originally appeared in Wharton Journal. Boateng (2005) and Ikoku (2006) were graduates of Wharton Business School at the University of Pennsylvania.


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