No doubt, perceptions about Africa, especially in the west, is far from the realities on the ground. These not-so-correct perceptions have adversely affected trade on the continent as the average western business would rather trade with other blocs than with Africa, in spite of the tremendous potentials and opportunities that Africa has to offer. As a result, the continent continues to lag behind, in the Western business leaders’ trade partnership agendas. Between 2014 and 2016, US exports to Africa fell by almost half, from $38 billion to $22 billion. Also, the latest available UK continent-specific export data showed that total UK exports to Africa in 2018 stood at only 2.3%, compared to 46.6% to neighbouring Europe, 24.1% to Asia and 15.3% to North America.
However, the prevailing circumstances in most African nations, notwithstanding, savvy business leaders and leading governments have continued to sustain the narrative that Africa represents enormous opportunities as the last trade frontier. This narrative can be seen in the swelling number of business and investment conferences centred on Africa, and more nations and governments joining the Africa business and investment talk circuit, with Russia being the latest following her recently hosted Russia-Africa Summit in October 2019. The United Kingdom is also poised to hold its first-ever UK – Africa Trade and Investment Forum in January 2020, underlining the scramble, as it were for what opportunities that Africa represents.
While this global attention on the continent has not risen out of just sheer love for the African people, but in furtherance of the strategic interests of these nations, which often goes beyond only trade; it does signal the beginning of mutually beneficial relationships that could significantly leapfrog the continent in the areas of critical development indicators much needed in Africa today. Some of these vital areas are in jobs creation, healthcare delivery, education, energy and infrastructural development, among others.
To buttress the case for jobs creation, according to the United Nations statistics for 2015, there was over 226 million youth between the ages of 15-24 in Africa, and a staggering 75% of Africans are under the age of 35, making her the world’s youngest continent. Moreover, the share of Africa’s youth in the world is forecasted to increase to 42% by 2030 and more than double the current levels by 2055. These young people need jobs, and every possible opportunity they can get, be it in education, healthcare, and the various fields of human endeavour. They also represent tremendous value and are potentially Africa’s greatest asset.
The distinct role of the African Development Bank in leading investments into Africa is unequalled through the provision of both financial and technical support to its member nations. The quality of data, facts and figures, products generated by the bank, the multi-level engagements and partnership and her expert advice are unmatched. And the success of the recently concluded Africa Investment Forum 2019, with 56 boardroom deals valued at $67.6 billion tabled. This is the way to go, and as the AfDB President, Akinwunmi Adesina proclaimed, Africa is indeed bankable. .
It is, therefore, time for leading OECD countries, and the rest of the west, to prioritize trade and investments engagements with Africa above aid, governance and every equally good consideration. While several African countries would still require aid in the coming years, what is more essential and mutually beneficial would be to deepen fair trade engagements and well-thought-through investments and agreements that embraces international scrutiny and meets best practices, as this would ultimately result in jobs creation, technology transfer, improved infrastructure, and a lift in the overall standard of living of the people.
Other areas that Africa have fared well that makes a case for increased trade and investment engagements on the continent are the following:
Political Stability:
According to Freedom House’s “Freedom in the World 2019” ranking, approximately 61 per cent of sub-Saharan African countries are “free” or “partly free” compared to 1990, when only 40 per cent were considered “free” or “partly free”. Citizens are becoming more aware of their rights, and in many countries, they are demanding same from the leaders. African Governments are increasingly embarking on reforms, thereby creating enabling environments for business to thrive, better than some countries in the west. Countries like Mauritius have risen significantly in the 2020 World Banks Ease of Doing Business ranking no. 13th and respectively. Other African countries like Nigeria, Togo and Kenya have also improved on the index, despite challenges that still abound.
Technology Pool:
Companies like Andela with over 1000 world-class developers, building software for fortune 500 companies have made advanced technology accessible to a large number of Africans. According to the Internet World Statistics of 2019, Africa has 11.9% of world internet users, which accounts for 525, 148,631 estimated internet users.
The World Bank’s World Development Report 2019, says that Africa has an opportunity to forge a different path from the rest of the world – if digital technologies are harnessed correctly by governments and businesses by ensuring that critical policies and investments are in place. African’s technological woke will increase economic growth and prosperity in Africa.
Rapidly increasing middle class:
It is projected that by 2030, African countries will have the highest number of working-class populations with greater purchasing power and improved overall livelihoods according to the AfDB outlook 2019, thereby creating a robust middle class with high purchasing power and ability to buy – an amazingly huge market by all standards. This, by implication, means that 30% of Africans by 2030 will have regular income, be able to afford quality education for their children and can provide a paid holiday annually. Also, 45% of Africans are predicted to live in cities which will make the continent the most urbanized continent in the world. Herein lies opportunity for trade with the continent.
Integrated Trade Regions:
According to the AU, Africa currently has the lowest percentage of intra-regional trade in the world at 18%. However, African Export-Import Bank believes that this figure could more than double within the first decade after implementing the recently signed Africa Intercontinental free trade deal.
Hence, from the foregoing, Africa’s economic attractiveness and appeal continue to be on the rise. Since the African Growth and Opportunities Act (AGOA) was approved by the US Congress in May 2000, and the very first Forum on China-Africa Cooperation in November 2006, major leading economies, are strategically positioning themselves for the future prosperity that is trade and investments in Africa.
In all of this, what quickly comes to mind are myriads of questions such as – does Africa clearly understand the sheer scope of the opportunities that lie within her boundaries? Do we have integrating mechanisms to maximize the benefits of the FDI these summits may likely generate? Is the future wealth of Africa sustainable, judging by the level of future skills deficiency on the continent today? Do we have our trade deals structured and designed to ensure the terms of engagement with foreign investments are not dangerously skewed in favour of some of the so-called investments, almost making certain “FDIs” look like day-light robbery? How productive are the conversations around the AfCFTA and how ready are the African nations to sign on to implementing this agreement in individual countries? Answering these questions may well help us structure better deals for the future of our unborn ones, as we explore homegrown solutions and strategies for the future we seek.
Conclusively, amid our considerations, let us remember the UN Foundation 2019 reports that assert that in an age of ever-complex and interconnected challenges and risks, we are greater than the sum of our parts. Africa is currently at a most defining moment where partnerships, collaborations and international cooperation must be strategically harnessed to combat the challenges and risks of aborting the projected future. Let us harness Africa’s investment potentials – Let us harness the future today.
