Myths and misperceptions holding back investment across Africa, Global Manufacturing and Industrialisation Summit hears

Abu Dhabi, UAE, March 30, 2017: 

Industrialisation across Africa is being held back due to misperceptions about the risk of investing in the continent, according to a panellist at the Focus on Africa session held on the second day of the Global Manufacturing and Industrialisation Summit (GMIS), taking place at the Paris-Sorbonne in Abu Dhabi.

Dr. Carlos Lopes, Professor of Economics; University of Cape Town; Visiting Fellow, Oxford Martin School, University of Oxford; Former Executive Secretary, United Nations Economic Commission for Africa (UNECA) said Africa exported US$500 billion of goods per year, adding: “Business is not bad, and regional market opportunities are increasing, due to the demographics of a growing population, but also the growing Middle Class.”

But he said the narrative surrounding the continent was still too negative, citing examples ranging from piracy and conflict casualties, which he said were far higher in other regions, to per capital GDP, which, on a continent-basis was higher than India’s.

He also said it was a myth that China was now the biggest investor in the continent. “That’s simply not true,” he said. “It’s an important trade partner, certainly, but it’s only the fifth biggest investor.” He said the EU, taken as a single bloc, was the biggest, followed by the US.” Where the Chinese had been smart, he said, was in seizing the opportunities Africa offers as a contractor and trade partner. “Other nations are factoring in a risk factor that does not exist,” he said. “Africa offers a return on investment of 9 per cent, against a global average of 7.2 per cent.”

Ethiopia’s Minister of Industry, His Excellency Ahmed Abetew, said his nation had made great progress in industry and manufacturing over the past decade, but there was still much work to do.  “We have a vision to make Ethiopia a middle-income country by 2025,” he said, adding that increasing the pace of industrialisation would be critical to achieving that target.

Asked what other African nations could learn from Ethiopia’s experience, he pointed to the establishment of free trade zones and industrial parks – two out of 12 planned zones have already opened. In developing parks, he said, it was important bypass bureaucracy by creating ‘one-stop shops’ for all regulations and government services within the park.

Senator Joshua P. Setipa, Minister of Trade & Industry, Lesotho said his country’s experiences differed from Ethiopia’s – Lesotho being a tiny state compared with Ethiopia, one of Africa’s biggest countries with a population of more than 90 million – but that it demonstrated different models are needed across the continent. His nation is one of sub-Saharan Africa’s beigest textile exporters – on a good day the biggest, he says – but its potential is tied to South Africa, which surrounds it on all sides. That offered huge advantages in accessing the global value chain, he said, and allowed the tiny state be innovative. “We used our skills with textiles to enter the automotive sector,” he said. “It’s the same skills to make car seats, and that’s what we’re doing now – making car seats for BMW and other car makers.”

Kalilou Traore, Commissioner of Industry and Private Sector Promotion, Economic Community of West African States (ECOWAS), said improving infrastructure was critical to attract investment, but that this should be done on a regional, and not individual, scale. “We need to have our infrastructure in harmony,” he said, adding that the biggest barrier was a lack of political determination. “We’ve launched big projects to address this,” he said. “This will give a boost to the region, and throughout Africa, and allow us to exchange goods. But we need to better organise our approach.”

The inaugural Global Manufacturing and Industrialisation Summit is taking place at the Paris-Sorbonne Abu Dhabi, UAE, until March 30, 2017, under the patronage of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. The Summit, which is co-chaired by the UAE Ministry of Economy and the United Nations Industrial Development Organization (UNIDO), is the world’s first global gathering for the manufacturing community, bringing together decision-making leaders from governments, businesses and civil society organisations to shape a vision for the sector’s future.

The Summit is a global platform for participating attendees to learn from best practices from across the world. This unprecedented global gathering will spark new ideas and set the stage for debate and action – addressing ways in which manufacturing can shape and reshape the world, integrating activities between developed and emerging markets, and delivering on social responsibility towards future generations. Leaders from the public and private sectors, along with representatives from civil society organisations, will gather to discuss global challenges within the manufacturing sector, looking specifically at six themes: technology and innovation; global value chains; skills, employment and education; sustainability and environment; infrastructure; standards, and stakeholder alignment.