Oliver Cann, Director, Public Engagement, Tel.: +41 79 799 3405; Email: Oliver.Cann@weforum.org
Cape Town, South Africa, 4 June 2015 – African economies are implementing reforms that are creating opportunities for investors in areas such as infrastructure, where capital is essential to drive development, said business, government and civil society leaders in a session on Africa’s investment environment at the World Economic Forum on Africa. The meeting opened today in Cape Town.
“We are removing all barriers to private investment,” said John Rwangombwa, Governor of the National Bank of Rwanda, noting that his country has reduced the time it takes to register a new business from two weeks to just minutes or hours by using an online, one-stop platform. Rwanda’s competitiveness and ease-of-doing-business rankings have risen as a result, he noted. “This creates an environment that attracts investors to bring in capital mainly through FDI (foreign direct investment) and also through IPOs (initial public offerings).” He added: “The main function of government should be to create an enabling environment.”
Due to the improved business climate, Rwangombwa remarked, “private investors are willing to co-invest with government in infrastructure.” Rwanda has set up a clear framework for private investors to fund projects, notably in the energy sector, which previously the government alone would have done, he explained. If an economy in Africa wants to attract capital from within or outside the continent, the ability of investors to repatriate profits is key, Rwangombwa reckoned. More reforms are needed. To stimulate intra-African investment, easing controls on the movement of people across borders would be important. “That will really catalyse capital,” he stressed.
Simpiwe K. Tshabalala, Joint Chief Executive Officer of Standard Bank Group of South Africa, agreed that there are significant investment opportunities in infrastructure in Africa due to the severe lack of adequate roads, ports, airports and other facilities. “We have among the lowest investment to GDP ratios among the regions, which suggests that there are huge opportunities to execute projects that are developmental in nature but will remunerate those willing to take risks,” he said. He advised investors to partner with local players.
“There is a lot of work to be done in infrastructure,” said Nathan Kalumbu, President of the Eurasia and Africa Group at the Coca-Cola Company, Turkey. “The infrastructure deficit is close to double what we are currently investing” in the continent. But such enormous and complex challenges “cannot be resolved by any single institution or organization,” he said. The key for business is to build innovative partnerships with government and civil society to pursue projects that will have social and economic impact.
Coca-Cola, for example, has worked with the Bill & Melinda Gates Foundation to help fruit farmers in East Africa bring their produce to market by accessing the company’s supply chain. This collaboration is an example of private capital catalysing African growth and development. “Private finance can help drive it and make it sustainable over the long term,” concluded Mark Suzman, President of Global Policy, Advocacy and Country Programmes at the Bill & Melinda Gates Foundation, USA.
More than 1,250 participants are taking part in the 25th World Economic Forum on Africa in Cape Town, South Africa, from 3 to 5 June 2015. The theme of the meeting is “Then and Now: Reimagining Africa’s Future”.
The Co-Chairs of the World Economic on Africa are: Antony Jenkins, Group Chief Executive, Barclays, United Kingdom; Phumzile Mlambo-Ngcuka, Undersecretary-General and Executive Director, United Nations Entity for Gender Equality and the Empowerment of Women (UN WOMEN), New York; Patrice Motsepe, Founder and Executive Chairman, African Rainbow Minerals, South Africa; Paul Polman, Chief Executive Officer, Unilever, United Kingdom; and Sir Michael Rake, Chairman, BT Group, United Kingdom.
Notes to Editors
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