Welcome to Green Rising – Can you build a large business in Africa by aligning with climate goals? 

Clearly the answer is yes. Nairobi-based M-Kopa started out by providing consumer loans for solar home systems. It offered solar panels, inverters and batteries – and got paid healthy interest rates. 

Then it expanded to focus on electric motorbikes. The customer base increased from 4 million to 5 million in the past year, most of them unbanked. M-Kopa’s pay-as-you-go model makes that possible. Annual revenues grew from $250 million to $400 million last year. 

Its network of door-to-door sales agents expanded from 3,000 to 30,000 across five countries. It took more than a dozen years to get there. Inflation, tax challenges and exchange rates disasters loitered along the way.

But Africa’s green economy is fertile ground for large businesses creating 1000s of jobs.

Earlier this year, The Economist magazine published a long report bemoaning the relative lack of large corporates in Africa. This still has people talking. Something struck a chord.

Does Africa need fewer but bigger businesses? Large companies can be more efficient and productive and hence can create more jobs – whereas startups and family shops, the mag says, leave a big productivity hole at the heart of African capitalism. 

To create jobs for a fast-growing population, the continent needs corporate hulks, not entrepreneurial shrimps, right? It would certainly make things easier for service providers, selling to just a few name-plate clients.

And yes, big companies have historically created lots of jobs. But in practice many of Africa's largest businesses are also its most inefficient and unproductive. 

• We recently featured Eskom, South Africa’s dysfunctional utility behemoth.

• The Nigerian economy has plenty of self-dealing fossil fuel monsters.

• Nairobi’s skyline is littered with the proud towers of insurance zombies such as Britam and Jubilee with thousands of desks but no future.

Does Africa need more business giants? And why is it struggling to get there? We’ve followed the lively debate on social media. The big-is-beautiful faction rallied early. 

• Alex Mutemi, a Kenyan finance leader: “As long as African governments continue to glorify SMEs as the key to economic growth, the continent will continue to lag behind.” 

• Gyorgy Feher at African Investment Advisory Services wrote it’s “hard for SMEs to grow”. 

Notes of scepticism were not far behind, some appealing to realism, others to nuance. 

• Rebecca Harrison at the African Management Institute said, “Small and micros generate the majority of Africa’s jobs.” 

• Hilton Theunissen at GrowthWheel wrote, “SMEs are crucial for job creation, innovation, and economic resilience. The goal is not to choose between big or small.” 

The last point seems especially sensible. Nobody is against having productive (!) large companies. 

The real debate should be about how to get there. Predictably, The Economist’s answer is a “capitalist revolution” (see its cover above). Great, where do we sign up? 

The real problem is that Africa has too many tired old giants blocking the path of younger, more agile competitors… by hook or by crook. The grandaddies aggressively and often extra-legally defend dominant market positions and with it their own dysfunction. 

A revolution is one solution. Good luck. The other is to invest in the few sectors mostly free of crooked incumbents: The green economy. 

Here is the good news:

• So few fuel-powered cars and motorbikes are historically made in Africa, the electric variety is facing minimal obstacles. 

• So few rural households have grid connections that solar mini-grids can be installed without making commercial enemies. 

• So few industrial manufacturers are entrenched that setting up green hydrogen production appears to be a simple net gain. 

Is it really? 

Please do feel free to use favourite management jargon here… blue ocean… blah blah… leapfrogging… blah blah... disruption… blah blah.

The basic point however is this: Africa’s green economy is lucky to bypass many ossified business structures (not all, admittedly). 

Just in time for a populous future… 

What job-hungry Africa needs are not only big companies – but a different kind of big companies. 

Small companies in dysfunctional markets don’t suddenly become efficient and create lots of jobs when they scale. 

On the other hand – Africa’s newfangled green economy has already started to create big companies that are far more efficient than ageing counterparts in the old economy. 

We’ve compiled lists of impressive green corporates that possess heft without too much girth.

Lists are boring to read, but do please click here for a data-driven answer to the question: Who are the green corporate giants of the future? 

Number of the week 

… stoves is the ambitious distribution target by 2030 under Ghana's clean cookstove initiative. This is part of a broader carbon market strategy, expected to attract over $1 billion in investments in the coming five years.

Network corner

Top green jobs from…

• UNEP: Deputy Director, Programme (Kenya)

• M-KOPA: Head of Compensation & Benefits (South Africa)

• BURN Manufacturing: Head of Indirect Procurement (Namibia)

• CIFOR-ICRAF: Programme Manager - Regreening Africa (Senegal)

• IUCN: Regional Coordinator-Forest (Cameroon)

• SunKing: State Business Manager, North Region (Togo)

• Schneider Electric: System Integration & Automation Manager (Egypt)

• Mott MacDonald: Teaching and Learning Lead (Tanzania)

• Husk Power Systems: Marketing Manager (Nigeria)

• ARC Power: Distribution Manager (Mozambique)