On October 20-21st 2016, I had the honor of moderating the African Development and Infrastructure Convention (ADIC) 2016 in Zurich, Switzerland, a two day event geared towards opening up avenues to allow African business Owners (both small and large) pitch projects to the rest of the world. In its second edition the turn out was great. It brought together some of the top business minds from Europe, Africa, North America, Asia and the Caribbean. But what is always baffling about these global events is the readiness for investment from the rest of the world and the somewhat unpreparedness of some investors or entrepreneurs from Africa. Giving credit where it’s due, as an African one thing we are good at is introducing our product and giving the narrative of what is not right in our nations. The beauty about this kind of branding is that it is what shows the level of opportunity for most foreign investors (You know the saying some people find opportunity in crises).
At the end of ADIC 2016, a good number of investors from Africa were able to come back home with signed MOUs on various business investments. Where were the government representatives at this convention? I wondered! Maybe too busy taking care of business back home or maybe cutting down on international trips to spare money for the so many crises bedevilling our continent, I hoped.
But then a few days after I returned, I too part in the first renewable energy solutions for Africa summit held in Nairobi and organized by an investment thirsty Italian non-profit organization RES4MED/RES4AFRICA. The two event’s main goal was to look out for opportune areas for investment in clean renewable energy across sub-Saharan Africa. It brought to Kenya over 30 clean energy company business leaders from Italy 🇮🇹, like Enel Green Power one of the largest solar investors in Latin Europe. And while this time we saw some government representation at the event, it wasn’t those at the decision making level that participated. Again, maybe they were busy taking action on more urgent matters or maybe it was fatigue of attending the various investor events, I thought.
However this reminded me of the World Economic Forum on Africa(WEF Africa) in May 2016 in Kigali, Rwanda where leaders from around the world met to chart a way forward for Africa under the theme, “Connecting Africa’s Resources through Digital Transformation”. This event was attended by less than 10 African heads of state; a number less than half the number that formed the OAU back in 1963.
What is rather disappointing is the slow progress being made in solving Africa’s key economic challenges. There is undoubtedly more attention paid to political events around the continent and less to economic events meaning while we strive to better the lives of citizens, the selfish political agenda tends to stagnate the economic agenda. Africa’s leaders spend more time flying out of the continent to seek grants and loans with the West and now increasingly the East and not much with fellow African countries, yet we ask why Intra-African Trade looks like a far-fetched dream to us! When investors come to us, we are either unavailable, busy, out of the country or have no interest. When we are invited to Europe, we are so fast to rush to embassies get visas to travel, even paying fast tracking visa fees only to get there and return with little or no investment to our nations. Even we know it is easier to fast track a visa out of Africa than it is process one within the continent some countries) but yet this has not been a matter of urgency in trying to solve the challenge of closed border or open skies policies on the continent.
Not once has it been said but severally, that it is far much easier to get a visa to countries outside of the continent than it is those within. To go to Tunisia 🇹🇳 in North Africa, one must first go Turkey 🇹🇷 which is outside the continent. For Kenya’s flowers to reach Nigeria🇳🇬 , they must first head to the United Kingdom 🇬🇧 and then to Nigeria.
According to statistics cited by the World Trade Organization, Intra-African trade currently stands at 12 percent of total trade, compared to 60 percent for Europe, 40 percent for North America, and 30 percent for Asia. Today it is far more beneficial to export goods outside of Africa than to other African countries. It is more enriching to do business with multi-national companies outside of Africa than those within. But again we lament about bad road networks across the region, when our very own goods head out of the continent by air. How can we build infrastructure that inter-connects Africa if we are not doing business with each other.
Each year the continent loses in excess of $50 billion to Illicit Financial Flows(IFFs) partly because we care more about the companies coming in and establishing business and less about whether or not they’re paying taxes.
These are some of the challenges the OAU now African Union sought to find solutions to but all that is still work in progress. Progress that one could sum up as, snail pace. International Centre for Trade and sustainable development recommends that African leaders urgently pursue changes in three crucial areas;-improving cross-border trade, removing a range of non-tariff barriers to trade, and reforming regulations and immigration rules.
Given a worsening euro zone crisis that could reduce Africa’s GDP growth by as much as 1.3 percentage points, the World Bank warns that effective regional integration is of particular importance at the current time.
One would nearly conclude that we are our own enemies – signing agreements with each and backing out of them even before they yield any fruit, pretending we are united as Africans but then make it difficult to do business with one another. Corruption is mercilessly devouring all the good our countries have tried to build. Some of our leaders have all these secret havens in unknown countries in parts of the world as millions of citizens on the continent languish in poverty and live under a dollar day. Our youth have the highest percentage of unemployment around the world and yet our population is bursting out of control.
At the just concluded World Economic Forum in Kigali, President Uhuru Kenyatta of Kenya🇰🇪 said, “the youth are Africa’s greatest asset yet the same youth could be a ticking bomb if nothing is done to create jobs for them”.
Agriculture which is the backbone of majority of African economies is treated as a development program rather than income generating business.
We seem to have made tremendous progress in some areas but also stagnated in others.
The good news still remains that the rest of the world wants to do business with Africa’s 54 countries. In each of these countries lies untapped resources, undiscovered wealth and untapped potential that if guided by good policies, could see our economies rise by more than the collective 3%, as a continent.
The world’s largest economies want a piece of us. fDi Intelligence and This Is Africa both Financial Times services reports show that, “Western Europe accounted for more than half of all greenfield investment into Africa in 2014, with an estimated $47.6bn invested. North America was the second-largest source region for investment into Africa, at $13bn.
In December of 2015, China pledged $60 billion investment in development across Africa by 2018, stamping its increased interest in the continent. While it remains unclear the price African governments will have to pay as a result of the red dragon’s closed-door agreements, China-funded infrastructure development projects like roads, railways etc, could be what Africa needs to trade better within the continent”.
What is rather frightening with African nations is how we’d rather seamlessly do business with “strangers” (outside the continent) than do it with ourselves and build each other.
So as we commemorate Africa day, let’s not forget about the dreams that our liberators had when in the struggle to gain independence from colonial rule. But as we do so, let’s also be brilliant enough to make decisions for our nations that 50 years from now, we will look back and be proud we each collectively played a role in building our respective countries.