Alexa

Governments and business are bullish on Africa

Governments and business are bullish on Africa

Asia's still the economic darling but it's hard to find anybody in government or business who isn't optimistic about Africa as the hot new continent for trade and investment.
U.N. Secretary-General Ban Ki-moon is optimistic. So are Ethiopia's president, Zimbabwe's prime minister, former British prime minister Tony Blair, and business executives from South Africa, Egypt, India and many other countries.
But at the same time, there is also concern at the exploitation of poor nations by corporations and conglomerates as well as red tape, regulations and taxes in some African countries that hinder investment.
Nonetheless, at a panel Thursday on Africa's natural resources at the World Economic Forum chaired by Blair, there was a buzz of enthusiasm about the continent that is always relegated to last place when it comes to economic progress.
"It was unanimous. everybody's optimistic." Zimbabwe's Prime Minister Morgan Tsvangirai said. "Definitely Africa's moving positively forward. We're going to realign our policies so that we can exploit our national resources."
One business leader at the session, Prakash Hinduja, European chairman of the privately held Hinduja Group of Companies, one of India's major conglomerates, said the group operates in Nigeria, Ghana, Angola and Tanzania and "will welcome any partnership with the African countries."
"The African continent is going to be the golden continent of the period," he said, if African nations can meet and exchange knowledge about the continent's success stories.
Ban, who will be attending the upcoming African Union summit, said African countries have "huge potential," especially with their natural resources and increasingly educated work force.
"Basically I'm optimistic," he told AP before after a private meeting with Blair. "These are all very much encouraging developments but we need to do more. They need support to strengthen their capacity. This is what the U.N. is doing."
At a panel on globalization, South Africa's Trade and Industry Minister Rob Davies said "there's a growing consensus that the next growth story after Asia and after Latin America is actually Africa."
He pointed to a recent report by McKinsey management consultants which said there is a $2.6 billion revenue opportunity in Africa.
"There is now a commodity cycle which is moving upward sharply, in some cases, and African countries are poised to take advantage of that," Davies said.
While optimistic about Africa's potential, Ethiopian Prime Minister Meles Zenawi criticized the exploitation of Africa's resources.
"The major damage done by thieves in government is not the amount of money they take from the people," he said. "The main damage done is that they open the door for bigger thieves ... corporations, internationally respected corporations ... that rip off the population. So in many ways they have facilitated the bigger damage."
Are African countries learning to stop this exploitation?
"Some are learning," he said. "Some have been very good from the beginning and we can learn from their experience," he added, singling out Botswana.
Prof. Jeffrey Sachs, head of the Earth Institute at Columbia University, stressed the importance of balance, with investors and the country's people both getting good returns.
With governments and private investors buying up large tracts of land in Africa for food or other development projects, he warned that anyone owning a large plot is the middle of someone else's country is going "to be caught in politics beyond imagining," with rivals and likely instability.
"And it doesn't matter what deal you struck, it's not going to stand," he predicted.
On the business side, Tito Mboweni, chairman of AngloGold Ashanti Ltd., a South African mining company with operations in 10 countries on four continents, said "it's very important to create a climate conducive to investment."
For example, he said, governments must not take two to three years to decide on granting a mining license, and must ensure that their tax systems are "favorable."
"There are very, very encouraging signs about investment into the continent," Mboweni said, pointing to telecommunications which accounts for the largest investment in Africa and continuing interest in natural resources including oil and gas off Ghana.
Davies, the South African trade minister, said one of the continent's problems is that it has 54 separate countries.
He said discussions are under way between regional groups in eastern and southern Africa "around what we're calling a grand free trade agreement."
"If this starts to take off, I think we will be on track to create something akin to a domestic market with something like 500-700 million people in east and south Africa," Davies said. "I think that will be a very, very significant step forward."


Updated : 2021-02-27 03:39 GMT+08:00