THE Common Market for Eastern and Southern Africa (Comesa), and Africa in general, are being scoured by all and sundry seeking high returns on their investments.
Of the world’s 10 fastest-growing economies, seven are in Africa, and the continent is considered the last frontier of growth.
This is a continent of high returns in a world dominated by stories of diminishing financial fortunes and chaos, such as evidenced in Cyprus. But the continent has its challenges and is not for the faint-hearted.
We do not believe that anyone should assume there are easy pickings in Africa, and we do everything we can to ensure that business processes on the continent are properly understood.
As part of that effort, Comesa and the Dubai Chamber of Commerce and Industry will hold a second business forum from May 1-2 to drum up support for investment in Africa. It is a follow-up to one we held two years ago.
Delegates will learn first-hand about challenges and opportunities with regard to finance, agribusiness, logistics, trade, and how to maximise Dubai’s position as a strategic hub to Comesa and the other emerging markets within Africa.
We are returning to Dubai because, as the football adage goes, you don’t change a winning team, especially if the strikers are firing with all cylinders.
In 2011, 1,500 business leaders and government ministers met here and the result was tremendous. The Gulf African Bank was launched and so too were ventures in tourism, manufacturing, pharmacology and agro-processing. Further, we have seen the beginnings of some mining ventures.
This is not simple hype. The relationships we built two years ago were tangible and are working.
There are many ways in which Dubai can engage with Africa. The Middle Eastern region has extremely active sovereign wealth funds as well as private equity funds, and I dare say they should be looking to invest some of their money in our continent. We are not short of bankable projects: we have $15bn-$20bn in major infrastructure projects.
There is appetite for African projects. We are playing our part.
Last year, we launched the Comesa Infrastructure Fund, an initiative to address the pressing infrastructure challenges facing the region. Comesa recognises that without meaningful infrastructure development, the region cannot grow and achieve one of its key developmental goals: eradicating extreme poverty.
The purpose of the fund is to raise capital for investment in trade-related infra-structure projects in the region.
This is a $1bn fund — a mix of public and private investors’ funds.
The main objective of the fund will be to achieve a portfolio of viable and sustainable infrastructure assets, which will yield satisfactory returns to investors and deliver acceptable services to the Comesa region. The fund will be used to enhance co-operation among member states to improve the efficiency and competitiveness of their markets. This will be done by upgrading or increasing the supply of domestic and regional infrastructure services, through diversification of production and distribution capacity, with a view to promoting economic growth, wealth creation and poverty reduction.
We have targeted several sectors for immediate attention. These include: telecommunications, such as towers and broadband services; financial services, including commercial banks, insurance, as well as ancillary services ; agribusiness; infrastructure; oil and gas, including marginal fields, oil field services, as well as gas development; mining; and electricity.
We continue to press for greater African involvement in investment in Africa. South Africa, for instance, plays a significant role in intra-African foreign direct investment.
The share of African host countries in the outward stock of South African foreign direct investment has increased from less than 5% before 2000 to 22% in 2008, reaching almost $11bn, says the World Investment Report 2011.
Comesa would like to see greenfield projects and private-public partnerships. Specifically, we would like to see cash being invested in railways, highways, and especially energy. We also need to see financing in agribusiness to bring processing to where it matters.
• Sindiso Ngwenya is secretary-general and CEO of the Common Market for Eastern and Southern Africa.