For three days last week, African Development Bank [AfDB] organised the African Investment Forum [AIF] in Johannesburg, South Africa. Its aim was to ramp up intra African business and investment. The forum had in attendance several African heads of government such as the Presidents of Ghana and Guinea as well as Nigeria’s Vice President, Professor Yemi Osinbajo. Also in attendance were captains of industry including Nigeria’s Aliko Dangote. The forum enjoyed worldwide rating as unlocking a new vista of opportunities for the continent as a whole.
President of South Africa Cyril Ramaphosa said in declaring the forum open that “There is an urgent need to resolve problems that keep investors away from Africa, and address governance challenges such as policy uncertainty and corruption…As African leaders, we must demonstrate a firm commitment to act against corruption, both within public institutions and the private sector. We must deal with burdensome red tape, provide policy and regulatory certainty, and strengthen our financial institutions.”
Ramaphosa’s speech properly captured the core challenges facing investment domiciliation in Africa as it highlighted issues such as red tapism, policy and regulatory uncertainty as well as corruption in both public and private sectors. The full measure of the deleterious effect of these factors in trapping the continent’s economic development may not be easily appreciated. But suffice it to be mentioned that their combined effect has constrained development on the continent especially with respect to trade among African countries, believed to be at the paltry level of 15%.
AIF is therefore a welcome initiative on the African continent at this time when not a few countries are facing many challenges associated with changing the investment climate in their domains. For Nigeria in particular, AIF is a welcome development that beckons on the country to exploit whatever opportunities exist in other parts of the continent in mutually beneficial business. Already the likes of the Dangote Group and Global Communications Limited are actively involved in this enterprise as they are reportedly spreading their business links across the continent.
Yet the continent needs more of such entrepreneurs who see and believe in the African dream of being lifted to a new level of continent-wide industrialization. This is where the current paradigm of dependence by the various African governments on handouts and loans with dubious as well as debilitating conditions from the more developed parts of the world need to be addressed. The dependence of African countries on foreign debts especially from China has assumed a scandalous dimension. While many of the countries including the Nigerian government see Chinese loans as quick and cheap money, little thought has been applied to the terms and conditions attached to the loans. If these explode, they would expose us to the danger of the continent’s continued enslavement, if not now, then in the future.
The recent experience of Zambia where the Chinese were reported to have seized the country’s power facility with the failure of the country to repay debts owed China is a good pointer. Even in the Zambian example only industrialisation can generate enough domestic prosperity to repay such problematic loans. Africa in its essential state is a richly endowed continent which makes it a preferred destination for any big-time investor to exploit. With a combined population of over one billion people and a land mass that is rich in an assorted array of mineral deposits both discovered and otherwise, as well as a rich agricultural culture, the continent is an enduring attraction to investors, its aforementioned challenges notwithstanding.
Hence, if in the face of whatever handicaps investors can come from outside the continent to profitably exploit Africa’s resources, it is even more promising for African investors to adopt a new attitude of reaping the vast resources in their homeland and thereby boost the flagging intra African trade.