Africa Investment Forum delegates underscore pathways to Africa’s rapid industrialisation
The industrialise Africa session at the Africa Investment Forum ran late into the evening on Thursday, with delegates focussing on how to drive investment, expand trade and industry and create African industrial champions.
Among the panellists were Ibrahim Mayaki, CEO of the New Partnership for Africa's Development (NEPAD); Emma Wade-Smith, British Trade Commissioner for Africa, and Geoffrey Qhena, CEO of South Africa’s Industrial Development Corporation (IDC).
Wade-Smith says that the UK wants to become the leading investment and trading partner with Africa among the Group of Seven (G7) countries. The British government is putting a lot of effort into reducing risk and the cost of business across the continent’s borders, she said.
The panel also featured Basil El-Baz, Chairman and CEO of private petrochemicals group, Carbon Holdings in Egypt, and Sara Masmoudi, CEO of TERIAK, a Tunisian pharmaceutical manufacturer under license from leading multinational companies.
Mayaki said that the private sector was critical to Africa’s development, but that 54 countries cannot all have different industrial strategies. Progressing towards a common market for Africa is vital, but “first we need to think regionally and plan nationally.”
Agriculture will be crucial to industrialisation, as will policies that boost small and medium enterprises. “A very important issue is human capital,” Mayaki said. He added that 400 million jobs will need to be created by 2030 for a young and vibrant continent.
Mayaki also told forum delegates that building of critical infrastructure needs political will, and social and regulatory stability.
Abdu Mukhtar, Director of Industrial and Trade Development for the African Development Bank, noted in a welcoming address that there is a need for the continent to improve the overall investment climate,” markets must be regionally integrated, and there must be more support for intra-African investment,” he said. Industrialisation on the continent is one of the African Development Bank’s “High 5” priorities for developing Africa.
To this end, the African Development Bank supports investment in more than a dozen sectors, including information technology, mining, agriculture, pharmaceuticals, transport, chemicals, building materials and textiles. Mukhtar noted that foreign direct investment in greenfield African manufacturing projects has risen from 23% to 30% since 2008.
Qhena, who heads up South Africa’s IDC, said the African Development Bank had just provided the country’s industrial development agency with a line of credit to invest in the rest of Africa. The IDC which has US$ 11 billion in assets, has invested US$1 billion in the continent outside South Africa.
Much of the IDC’s funding is in import substitution. Qhena says the agency also “crowds-in” private sector funds for energy infrastructure, agro-processing projects and ports, roads and railways.
El-Baz, Chairman and CEO of private petrochemicals group, Carbon Holdings, also says that Africa needs to find a way to rapidly employ nearly half-a billion people. He says countries cannot industrialise without manufacturing basic materials, including petrochemicals. This happened historically in major manufacturing nations, such as the US, Germany, and more recently South Korea.
His group’s proposed US$11 billion Tahrir Petrochemicals complex in Egypt is being funded by credit agencies in the US, Britain and Germany. It is the country’s first naphtha cracker and will produce petrochemicals that are used to make various consumer and industrial goods.
El-Baz also stressed that women’s rights were fundamental to industrialisation in Africa, as women make up half of the continent’s consumers and potential workforce.