Although Africa comprises 54 countries, each with their unique challenges and opportunities, many of Africa’s economies are highly dependent on extractive industries. This makes them vulnerable to shocks when commodity prices fluctuate. However, diversification is taking root in these extractive industries. The 2012 Ernst & Young Africa attractiveness survey indicated that 64% of FDI capital invested into African manufacturing from 2003-11 has gone into beneficiation-type activities in the extractive sectors, allowing African economies to derive greater value from their natural resources and buffer commodity price shifts.

Many African countries are actively seeking to break their over-dependence on extracting minerals: Kenya, for example, is pushing the development of its ICT sector. Continent-wide, over the past 100 years, there hasn’t been enough emphasis on this type of diversification.

Private businesses can also support economic diversification in this sense. In Angola, for example, a business incubator I run is funded by a large oil firm, and the incubator’s mandate from the client is specifically to develop entrepreneurs who are not linked to the oil industry so that the community is sustainable beyond the client’s activities.

The next level of diversification to discuss is that of gender diversity in the workplace. In South Africa (one of the most developed African economies in this regard), a statement by the Commission for Gender Equality indicated that only 16.6% of company directors and 6% of company chairs are women. This deplorable state of affairs is depriving African economies of the tangible benefits that a diverse leadership pool brings to companies.

Finally, there is the question of dealing with inequalities that lead to social strife throughout Africa. South Africa is addressing diversification in this regard through Broad-Based Black Economic Empowerment (B-BBEE). From 2014, B-BBEE legislation will pressure corporations to diversify the racial profile of their supply chains to be demographically representative, assisting in redistributing wealth to historically disadvantaged business owners.

These diverse aspects of diversification all represent areas in which clear-sighted policies can lead to sustainable economic growth, helping Africa to deliver on its previously undreamed-of promise.

Author: Allon Raiz is the CEO of Raizcorp

Image: Women working on a call centre in Senegal REUTERS/Finbarr O’Reilly