Investment and Leadership in Africa

What Africa needs most is private sector-led growth, investment and not aid. While this may not be new, it is refreshing to hear the west call for more investment than aid into Africa. This is according to a Chatham House Report  (see video below) which finds that Africa sits at the base of the global supply chain, with almost forty percent of the mineral resources, arable land, fresh water and energy required to secure global growth. 

With a billion people, Africa offers valuable market share, and for the past decade growth across much of the continent has outpaced every other region of the world. The truth is, if Africa's low income countries are to become middle income, the additional value to the global economy would be equivalent to that of another China: over $4.5 trillion. 

Certainly the time for Africa to step up its investment policies is now. However the missing link is leadership that translates challenges and opportunities into sustainable development solutions. Personally it has been useful to see President Obama spearhead initiatives to double exports, create jobs, engage the private sector (Presidents Executive Council) and he recently spelled out his trade policy and innovation agenda. 

Tom Cargill, Chatham House on Investment in Africa

In a previous post on China, we saw how investment was facilitated by joint ventures in Special Economic Zones. Investment between foreign firms and (mostly State-owned) firms, was key in China's export development, transfer of technology and dramatic increase in a strong domestic producer base.  A strong domestic producer base was important in diffusing imported technologies and creating domestic supply chains. However, facilitating technology transfer through investment requires a strong focus on Research and Development by regional organisations and the State based institutions as well. 

Without state support and publicly funded R&D, small producers in Africa would not be able to evolve given the technological dynamism today. Certainly more could be done by our leaders to enhance south-south cooperation in investment, technology development and transfer.