Get more bang for your buck by investing in Africa
Africa is
ready for the great leap frog of attracting investment, displaying its
innovative talent and capability and catapulting itself to greater heights of
human development.
These were
the words of President Cyril Ramaphosa when he delivered the keynote speech at
the Financial Times Africa Summit 2019 in London on Monday.
The Summit,
which has built a reputation for attracting key decision-makers, financiers,
investors and development partners from Africa and across the world, provides a
platform to discuss potential for scaling up investment and trade with and
within the African continent.
“Africa is ready
to partner with investors and the private sector because its been proven many
times over and in numerous countries that discerning investors who have the
foresight to invest in Africa can earn good returns.
“We have
reached a moment in our history where Africa needs investment more than it
needs foreign aid,” said President Ramaphosa.
This year’s
Summit comes as Africa begins the countdown to the launch of the African
Continental Free Trade Area.
The treaty
brings together into a single market 54 nations of some 1.2 billion people and
a combined GDP of over $3 trillion.
Trade among
African countries is currently at 15%, compared to 47% in the Americas, 61% in
Asia and 67% in Europe.
By some
estimates the new free trade area could increase the value of intra-African
trade by 15% to 25% by 2040.
In addition
to its economic impact, the African Continental Free Trade Area (AfCFTA) will
have far-reaching political, social, physical and international effects.
On the
economic front, it will improve access to existing markets and lead to the
creation of new ones. This, President Ramaphosa said will ensure investors who
bank on Africa will reap the rewards.
The free
flow of goods and services will enable African businesses and entrepreneurs to
expand their horizons. It will lead to the creation of a huge number of both
big and small businesses.
This treaty
will unleash the manufacturing and industrial capability of the continent as
companies will seek to make products for the burgeoning African market.
The removal
of trade barriers will lower prices and benefit consumers. Business costs will
be reduced and business efficiency will be raised.
“The
convergence of economies and the integration of markets under the AfCFTA will
make the case for investing in the African continent even stronger.
“This is a
continent with abundant natural resources such as minerals, oil and natural
gas, but also vast tracts of arable land and water, as well as wind and sunshine
– the drivers of the renewable energy revolution,” said President Ramaphosa.
The African
Development Bank estimates that Africa’s infrastructure needs amount to some
$130 billion to $170 billion a year.
For its
part, South Africa is in the process of setting up an Infrastructure Fund to
leverage investments from financial institutions, multilateral development
banks, asset managers and commercial banks.
Further
making the case for investment in Africa, President Ramaphosa said with the
global move towards cleaner energy sources, Africa is perfectly situated for
investment in wind, solar, bioenergy, hydro and natural gas.
South
Africa’s renewable energy independent power producer programme, for example,
has attracted approximately $14 billion in private sector investment in 102
projects and created around 40 000 jobs.
“Africa’s
success will lie in collaboration, in cooperation and in partnerships for
mutual benefit.
“It also depends on African countries working to
advance the interests of their people, seeking African solutions to African
problems
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