World Economic Forum On Africa - One Goal, Many Views
The 20th World Economic Forum on Africa took place in Dar es Salaam, Tanzania recently, with the theme: Rethinking Africa’s Growth Strategy, in the light of efforts by countries on the continent to attract direct foreign investments. In this write-up, TUNJI AJIBADE, a Consultant Writer, states that as Africa makes renewed efforts to attract direct foreign investment, there is still much to do if the continent must gain investors’ confidence.
"We must attract foreign investors to Africa," African Development Bank (AfDB) President, Donald Kaberuka, said while participating in the World Economic Forum (WEF) on Africa which started on Wednesday, May 5, 2010, in Dar es-Salaam, Tanzania.ã€€ His view summarized the position ofã€€the cream ofã€€Africa’sã€€continent that gathered at this year’s meeting. The organizers themselves had noted the relevance of this year’s gathering, and more specifically, the fact that it had Tanzania as a venue.
"The World Economic Forum on Africa is an important opportunity to take the pulse each year of the most influential of Africa's stakeholders. We look forward to holding the meeting in Tanzania at a time when the whole East Africa region is expected to experience stronger growth," Andre Schneider, Managing Director, World Economic Forum, had earlier announced. The Forum headquartered in Davos, Switzerland, who are the organizers of the annual event, further stated that the meeting continues a long-standing tradition of uniting African and global leaders to shape the agenda for the continent. ã€€
The Forum’s Global Redesign Initiative (GRI) played a prominent role in this year’s debate which had the theme: Rethinking Africa’s Growth Strategy. There was a Summit of Young Global Leaders and it held concurrently with the meeting in Dar es Salaam. Of the over 200 of the world’s top young leaders integrated in the meeting, five were Nigerians who had been contributing to development in local communities. In line with the theme, sessions that had more than a dozen of Africa's leaders in attendance, addressed how African nations manage relations with key economic partners.
The continent’s young population, natural resources and market potentials were discussed as catalysts for significant future growth and development. However, underlying blockages to social and economic progress were addressed as needed materials in order to harness these potentials. Key issues include access to education, healthcare and affordable capital. Other debates focused on new models of governance and a unified approach to ensuring peace and security in troubled areas. Discussions also addressed how a more conducive business climate and regulatory reforms can encourage both local and international investment, among other issues.ã€€
Investment for the continent’s economic growth was central in the mindset of many of the key speakers at this years gathering. Stronger growth needs foreign investment, and many of the leaders that came used the opportunity the Forum provided to appeal for it. This was underpinned by the unannounced arrival of Zimbabwe’s President, Robert Mugabe, who’s Prime Minister of Zimbabwe was the one on the list of speakers. Both leaders put up a strong presence, appealing to foreign investors to come to their country, which in recent time had experienced political logjam and controversial government policies. But one speaker, who described herself as an investor into Zimbabwe, said that what she heard during the debate was "a Zimbabwe that is not a reality today".
She said that Zimbabwe is "not predictable enough, not stable enough". And she added, "Capital is a coward. It doesn't go where it perceives danger." Her question was: What would the leaders do to make sure Zimbabwe does not miss the opportunity to attract new investment? Itã€€was the same question most stakeholders whose view matter to those who may bring their capital to the continent asked. As there were many questions, so there were answers, and views on the way to go about achieving sustainable growth and development for Africa.
However, while the meeting’s agenda basically focused on how to achieve sustainable growth and development, it integrated some key issues under the thematic pillars of Building Effective Institutions and Governance Structures; Fostering Sustainable Growth and Development; Managing Risk as Opportunity, and Fostering an Empowerment Mindset. ã€€
There is no doubt that the continent needs investment. The smallest share of global exports comes from Africa - just 3.5%. But only a trickle of global foreign direct investment (FDI) comes to Africa at 0.96% and the continent is not integrated into international financial markets. "This cannot continue," President Jakaya Kikwete of Tanzania said, adding thatã€€"if there is any predicament to African development, it is this state of affairs." While he might have left some other issues out, he still had a supporter in Klaus Schwab, Founder and Executive Chairman, the World Economic Forum who observed that there are "deep misconceptions" about Africa in the world.
This is more than commendable for an outsider who knows that the continent has real challenges. And South Africa’s Finance Minister, Pravin Gordhan, went on to say that the continent remains the most competitive in terms of returns on investment. He dismissed some international investors who perceived and described Africa as a risky place to do business as people who were out of touch with reality. But such investors’ perception ensures that Africa loses between US$200 billion and US$400 billion annually in capital flight alone. The challenges they confront, for which policy makers are often blamed, cannot be exonerated.
One of such challenges is physical infrastructure. Nigerian leadership, for instance, uses every opportunity it has to talk of its challenges in the area of power generation, good roads, good transportation and the rest.ã€€ President Goodluck Jonathan mentioned itã€€when he visited the U.S recently while he invited investors to come. But the problem is more than physical infrastructure. "Give business reasonable certainty and predictability and we can [create more] partnerships", advised Pat Davies, Chief Executive, Sasol, South Africa, and Co-Chair of the meeting. The voice of Arcelor Mittal South Africa's Chief Executive Officer, Ms Nku Nyembezi-Heita, agreed with him, and she criticized Pretoria, for instance, for inconsistent fiscal policies. And left out is the endemic corrupt atmosphere at ever stage of an investor’s show of readiness. Cases of corrupt officials who had to be bribed before they awarded contracts are rife such as the America’s Halliburton bribe-for-contract deal, as well as Germany’s Siemens case both of which has the cream of Nigeria’s political elites on the list. ã€€ã€€
And yet, there is the issue of political institutions over which President Jacob Zuma warned that democracy is not a simple matter of holding elections. Lack of strong democratic institutions, he pointed out, has been undermining democracy on the continent. He drew examples from a number of countries where elections have failed simply because of lack of strong institutions to manage them while stating that political parties, the media and civil societies are some of the institutions which could be used to strengthen democracy.
But then he would also regret that there are people who have been abusing such institutions. This observation is significant in the light of what a former OAU secretary general, Dr Salim Ahmed Salim said when he pointed out that at continental level, and the African Union has managed to put control over undemocratic governments but has failed to control leaders who have been using their power to stay in power.
This is equally dangerous. It paves way for instability such as the growing trend of forming unity governments to contain election disputes, something Kenyan Prime Minister, Raila Odinga pointed out, from the experience in his country. While he stated that the trend should be discouraged, he noted however that Africa has moved towards constitutional order, political stability and democracy during the last 15 years.
Views on the many problems identified as challenges to foreign investment on the continent were as many as the solutions proffered. And many of them are fitting considering the current realities on the continent. ã€€According to panelists at the opening plenary, Africa urgently needs to build partnerships if it is to unlock the continent’s immense growth potential. Kikwete called for partnerships at local, bilateral and international level to help overcome the many obstacles faced by African nations.
He however added that unleashing entrepreneurship is key, but will depend on quality education of Africa’s next generation of business and political leaders. "The future of our nation is in the hands of our youth. How can we empower them? By building their capacities, such as the investments we are making in education." Pointing out that 60% of Africa’s population is young people who are resources, not problems," Kuseni Douglas Dlamini, Chief Executive Officer, Old Mutual, South Africa,ã€€said,ã€€ "If we can focus on harnessing the potential of young people, and the potential of women, it will have a powerful impact."
To this the Forum already provided a practical answer. It founded, way back at the World Economic Forum in Davos in 2007, the Global Change-makers which consisted of youth. They had partnered and participated in, World Economic Forum events as well as withã€€the Clinton Global Initiative, the Global Humanitarian Forum, and the G20. In Dar es Salam, this youth group had five Nigerians, including Miss Olukemi Abimbola Akeju. They were among over 1,000 young applicants from across Africa who were selected based on their track record of achievements in their local communities and their work in the fields of education, human rights, health, and environment. These Change-makers met with leaders such as Tanzanian and Liberian Presidents Jakaya Kikwete and Ellen Johnson-Sirleaf respectively and business leaders. The youthã€€also had their own session where they presented innovative ideas to catalyze future growth and development in Africa.
There is no doubt that, many agreed,ã€€that as leaders across the continent strive to attract investors, much of the local situation can still to put investors off, and thus they need to be better managed. A local reality in which corrupt officials allow themselves to be recipients of bribes from companies that bid for contracts such as the one that led to currentã€€bribe for contract scandal in Nigera – Halliburton, Siemens and so on, cannot make a country investors-friendly. Such issues as this, as experts pointed out,ã€€have the potentials of making the continent unattractiveã€€to investors, unless there is a clean cut with the past, and a new direction is embarked upon. ã€€
Incidentally, Presidentã€€Kikwete took note of this, saying thatã€€theã€€numerous challenges confronting countries on the continent could not be addressed in isolation, and insisted that it was important for African countries to work together through the forum. "There is no way the problems of any country could be solved without working together with the rest. This forum is cardinal because it brings all of us together to share knowledge and ideas," he added.
Ajibade lives in Abuja.ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€ã€€