Africa is the world's second largest and second most populous continent, after Asia. Although it has abundant natural resources, Africa remains the world's poorest and most underdeveloped continent, the result of a variety of causes that may include the spread of deadly diseases and viruses (notably HIV/AIDS and malaria), corrupt governments that have often committed serious human rights violations, failed central planning, high levels of illiteracy, lack of access to foreign capital, and frequent tribal and military conflict (ranging from guerrilla warfare to genocide). All these problems make the international community believes that Africa, with only 1.5% of global trade, is the less active continent in the trade world.
Now that Energy prices and commodity prices are up all over the world, Africa is becoming a strategic location for all parts of the world. With the demographic explosion of middle class, with lots of resources and commodities that are attractive to the world, with lots of investment commitment in the infrastructure sector, we believe that these opportunities can translate to investment opportunities and that Africa will rise and contribute to the rest of the world. As evidence, those foreign companies which are already installed in Africa are doing well and are seeing the results of their investment.
In term of investment, Africa is becoming an investment destination and a trading block. We can divide the continent in to economic blocks where the East Africa for example, with more than 150 million of inhabitants, builds custom protocol to increase trade between countries in the region. This reduces barriers and frees the market so that people, goods and commodities can move within the region. And other region like the south SADEC region is building infrastructure to support the growth and is opening borders as well to welcome more trade and attract investors. So if you are doing business in one country, let say Kenya for example, you also have other countries of the region with you.
Chinese investment in Africa China came in Africa, 11 years ago; they found it very difficult to be adopted by the continent and the countries were hostile and uneasy. But after years of hard work and good strategy execution, china has really penetrated the continent and African countries are more receptive to the Chinese ideas and interest to the continent. China started off studying the continent and the large African market. They found the urbanization and the demographic explosion of the countries as a huge opportunity. One famous quote says “The difference between Africa and the western countries is the abundance of business opportunities”.
Unlike other western countries that extract African resources to only profit their countries, China appreciates these resources and uses them to serve the African market. They also have the strategy and qualified human resources to import goods and build product in Africa. Most of the Chinese investment is in infrastructure sector for opening up the continent. All new investors will have to compete with china because it’s pretty well established.
Other investments:
India is also systematically getting involved but their interest in not known yet. They are mostly focusing in the IT retail sector which is quite developed in India. Other countries like Russia or Brazil are also interested in Africa, and lots of African immigrate are coming back to build their country given the recession and global crisis faced by the western countries. And really what Africa offers now that the western countries don’t is “business opportunities”. The overall western contribution also played a productive role with goods and services distribution, job creation and transfer of practices and this value chain is backed up by setting up manufacturing in their industry and bringing telecommunication and financial services to the continent.
In conclusion, we can agree that foreign investment is always welcomed, but to the question “what role Africa has to play in its own future”, I believe that Africa should drive its own economic growth because our future depends on us. We should drive the behavior and the development as opposed to being in the receiving end of whatever the international community gets interested in, in Africa.
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