EZEKWESILI: AFRICA NEEDS $80BN ANNUAL INFRASTRUCTURAL INVESTMENT
World Bank's Vice-President, Africa Region, Obiageli Katryn Ezek-wesili, has said that African countries require an annual investment of $80 billion on infrastructure if it hopes to become competitive in the global market.
Ezekwesili, who spoke at day two of the World Economic Forum (WEF) in Cape Town, South Africa, yesterday observed that the new global economic landscape had changed the composition and level of traditional capital flows to Africa.
These capital inflows include sources such as foreign investment, remittances from the Diaspora and traditional development aid.
'Eighty billion dollars annual investment is not the kind of sum African countries can mobilise easily,' Ezekwesili who was Nigeria's former minister of education said.
According to her, 'It's true FDI has declined lately due to the global economic crisis, yet there's so much that could be achieved if African countries improve on their efficiencies or effectiveness in deploying capital.
'We have to ask ourselves what we do with the resources at our disposal and not so much about whether the aid we receive is sufficient. Are the governments taxing and utilising the taxes as efficiently as it should?'
The session also examined how the economic crisis has further worsened the already critical problem of unemployment in Africa, citing the imperative of taking a fresh look at previously neglected areas.
'The face of unemployment in Africa is not male and urban but female and rural. Any activity aimed at galvanising change has to consider the huge population of the continent's rural population engaged in small-holder farming,' she said, adding that Africa could increase its productivity by as much as 40 per cent if it solves its infrastructural needs.
All the discussants agreed that with FDI recording a 40 per cent fall, it was expedient to consider some sources of capital that could be mobilised domestically.
For Governor of the Bank of Botswana, Linah Mohohlo, the key could lie in expanding the capital market which she described as rudimentary.
On the debate regarding the necessity of foreign aid, she said: 'it's downright foolish to suggest that Africa doesn't require aid' in a session that had promoted names such as Director-General of Nigerian Stock Exchange (NSE), Ndi Okereke-Onyiuke and Dambisa Moyo (both were absent) as panellists. Moyo is the author of Dead Aid: Why Aid is Not Working.
The session also considered factors or developments that could strengthen Africa's profile as an investment destination in the current economic climate.
The moderator, Lerato Mbele, CNBC, South Africa's business anchor asked the panellists what Africa could do to mitigate risks.
'We have to manage the perception that policies of the state don't last the long term because investors always take the long-term view,' Donald Kaberuka, President of the African Development Bank (ADB), said. 'There has to be an atmosphere of predictability.'
But Zimbabwe's Deputy Prime Minister, Arthur Mutambara, would rather take the optimistic view.
'Sometimes risks have to be taken for major success to be made,' he said, citing the scepticism that heralded MTN's entry into the Nigerian market at the early stage. 'Today the story is different because MTN makes more money from the Nigerian market than it does from South Africa.'