Africa Rising: Many Business Opportunities but Challenges Also ...

It is apparent interventions Nitin Pandea, Senior Director in the Board of Investment (BoI), Steven Dimitriyev, coordinator of development programs for the region of the Indian Ocean in the World Bank, and Kamben Padayachy, Deputy CEO AfrAsia Bank, at a meeting held yesterday morning at the Hilton as part of "Africa Rising" conference. Jointly organized by the Mauritius Institute of Directors and the Institute of Directors Southern Africa, this two-day conference ended last week.

First speaker, Nitin Pandea former bank executive and director of the division of business facilitation in BoI has immediately focused on the performance of Africa as a continent attracting foreign direct investment (FDI). In 2012, Africa was one of the few areas to record growth of FDI although in absolute terms the amount recorded was lower than those obtained, for example, China, Brazil and the United Kingdom. The share of Africa in global FDI accounted for only 3.7% but said Nitin Pandea, it is gradually increasing. Countries occupying the first places in the African group are Nigeria (U.S. $ 7 billion), South Africa (U.S. $ 5.7 billion) and Mozambique (U.S. $ 5.2 billion). Mauritius, he noted, has attracted a budget of around U.S. $ 400 million.

The main foreign investors in Africa were the United States (14%), the UK (13%), South Africa (9%), the United Arab Emirates (6%) and France / India (5 %). This is the service sector (finance, commerce, communication and IT) who made the best progress in FDI over the last decade.

"Africa must improve access to finance, access to markets and skills of its people and facilitate regional integration. The connectivity problem is acute. Africa must also make great efforts to facilitate business, "said the representative of the BoI. According to him, the country at the bottom of the ranking of the "Ease of Doing Business" World Bank report are African. He noted, among other things, that in these countries the conditions for obtaining building permits are more difficult time being estimated at an average of 243 days, while for the connection to the grid, it takes an average of two months.

"The Mauritian companies are gradually turning to Africa and to date some 70 companies have invested in projects, among others, financial services, agro-industry, health, real estate development and new information technologies and communication, "further notes Nitin Pandea. It was announced that since the beginning of 2013, approximately 40% of investments to Africa have been structured by international companies across the sector Global Business. The BoI has he said, proposes to conduct a dozen "roadshows" in African capitals in 2014.

Continent of Opportunities

"Africa is definitely a continent of opportunities," says Kamben Padayachy, deputy CEO of Bank AfrAsia. The latter showed that the continent has made much progress in terms of democracy, business facilitation and the fight against corruption. He observed that many African countries are ranked higher than China under the terms of democracy and are in better shape than Russia in terms of transparency. "It is worth noting that 17 African countries last India in Ease of Doing Business report and the five new projects in Africa last year, three were executed by African investors," said the speaker .

The sectors attracting major investment are, among others, construction, infrastructure, trade and real estate. With rapid urbanization facing Africa, it is conceivable that the sectors offering attractive investment opportunities are: infrastructure, energy, water supply, roads and rails. "The investment in the distribution of consumer goods and manufacturing should be strongly considered," highlighted Kamben Padayachy.

Africa, said the banker, will also require significant financial resources to develop oil exploration, mining, agriculture, infrastructure and ICT. However, he observed, "the banking is still at a low level in Africa." Kamben Padayachy expects to see substantial investment in the financial sector in Africa. But he has warned, the risks associated with the investment are still present saw that there still has pockets of political instability and other social problems including strike threats. Africa must, in addition, other challenges such as lack of physical as legal and fiscal frameworks require rework and labor laws should be made more flexible infrastructure.

Economic resilience

Steven Dimitriyev the World Bank, argued that the African continent has demonstrated economic resilience to the global crisis, that while making progress in good governance. The economic growth rate for the period 2000-2011 was on average 4.9% and in 2012 it stood at 4.6%. "Africa has made progress in macro-economic terms, in terms of governance and political stability. The development of a culture of entrepreneurship plays a catalytic role in the development of the private sector, "he said. Steven Dimitriyev believes to continue on the path of economic reforms, it is imperative that entrepreneurs, especially medium-sized companies continue to advocate good governance, particularly with the government.

Africa, said the representative of the World Bank, has many challenges: unbalanced growth, level of development of non-comparable structural imbalances in the economy, too much dependence of some countries of mineral resources and oil, among others. Social inequalities, said Steven Dimitriyev are also glaring. He mentioned, among others, poor distribution of wealth, overcrowding, poverty, environmental problems with climate change and pollution, lack of diversification in activities likely to create enough jobs to reduce unemployment the problem of corruption, inadequate infrastructure, low productivity and lack of skills.

The World Bank, he argued, is in favor of a multidimensional approach to development, arguing that growth must be inclusive. WB also advocates public-private sector partnership and support actions in favor of good governance.