Friday,20 October, 2017
Current issue | Issue 1284, (25 February - 2 March 2016))
Friday,20 October, 2017
Issue 1284, (25 February - 2 March 2016))

Ahram Weekly

African opportunities

A meeting in Sharm El-Sheikh this week explored trade and investment opportunities on the African continent, reports Mona El-Fiqi

Al-Sisi
Al-Sisi
Al-Ahram Weekly

Africa 2016, an African international business forum was held on 20-21 February in Sharm El-Sheikh in southern Sinai. It was inaugurated by President Abdel-Fattah Al-Sisi and attended by African heads of state, including Nigeria’s Muhammadu Buhari, Teodoro Obiang Nguema of Equatorial Guinea, Gabon’s Ali Bongo and Sudan’s President Omar Al-Bashir.

The forum aims to promote African ties, highlight economic opportunities in Africa, and accelerate private-sector engagement and investment in Africa.

Addressing more than 1,200 businessmen and numerous heads of state and government officials, Al-Sisi, in his opening address to the forum, spoke about developing logistics and transportation routes “from Cairo to Cape Town” as a means of strengthening trade. He also highlighted the importance of the Suez Canal Corridor in supporting this trade network.

Egypt’s total investment in the African continent has reached more than $8 billion, helping to create tens of thousands of job opportunities, especially in the fields of construction, infrastructure, energy, agriculture, mining, communication and information technology, according to Al-Sisi.

Among the official meetings taking place was one between President Al-Sisi, Ethiopian Prime Minister Hailemariam Desalegn and Sudanese President Al-Bashir, who discussed the building of the Grand Ethiopian Renaissance Dam (GERD), a critical issue for Egypt.

 The three parties agreed to establish a constitutional framework to enhance cooperation between them in different fields and to create a mutual fund for development across the three countries. They also agreed to form political, economic, social and cultural committees to monitor the progress of cooperation in these fields.

The business meetings ended with the signing of 34 agreements, according to Minister of Investment Ashraf Salman. An official memorandum of understanding on the exchange of information was signed between the Egyptian General Authority for Investments and Free Zones and the Gabon Investment Export Promotion Agency.

The Rift Valley Company, the railway operator affiliated to Qalaa Holdings, signed a memorandum of understanding with the Export Council for Chemical Industries and Fertilisers to benefit from transferring goods to East African markets by rail.

A cooperation agreement was also signed between the Social Fund for Development and the Egyptian Agency for Partnership for Development to conduct a development plan for Africa.

Banque Misr announced it is considering expanding its business in Africa to include Côte d’Ivoire, and the Islamic Development Bank announced it has provided $1 billion to support African trade projects.

 He called on African leaders to invest in education so that the continent’s peoples can acquire the skills needed to contribute to the region’s economic growth. “Africa needs to concentrate on transforming societies using innovation and research as a basis for future success,” he said.

Egypt’s trade volume with African countries is $5 billion, which it aims to double in the next five years, Al-Sisi said.

The figure is only moderate since Egypt has many investment and trade opportunities with the African countries and it could easily be doubled, according to Nagwan Saad Eddin, former manager of the Investment Studies Centre at the National Planning Institute in Cairo.

Minister of Trade and Industry Tarek Kabil said that opening direct shipping routes linking Egyptian ports with others on the continent and inaugurating 12 Egyptian logistics zones across Africa, in partnership with the private sector, would help inflate the trade figures.

Egypt plans to send trade delegations to boost exports, including one to Côte d’Ivoire

in March, and is studying establishing a permanent exhibition in Angola for Egyptian goods, according to Kabil.

“Hosting such events in Egypt under the patronage of the president sends a positive message to African neighbours who have felt neglected in the past. Boosting relations with the African countries is a very important objective that Egypt should be keen to achieve over the coming years,” Saad Eddin added.

Egypt should also focus on building ties with African countries in sectors including culture, religion and politics, according to Saad Eddin.

A comprehensive study should be conducted of African countries that are rich in natural resources so that Egypt, with its technical experts, can help to transform these into final products.

Saad Eddin said that there are large investment opportunities in infrastructure and IT in many African countries and Egyptian companies have already started doing business on the continent, among them the giant construction company Arab Contractors.

“Trade agreements with African countries, particularly those along the Nile River, would benefit all sides. Egypt could import its needs of wheat from African countries instead of from Russia and Europe, for example,” Saad Eddin said.

 While the president had said that Egypt was looking forward to the future establishment of an African free-trade zone, Saad Eddin said it might be more realistic to start with bilateral trade agreements with each country, according to each side’s needs and potential.

Concrete steps towards this zone were taken in June 2105 when Africa’s three largest regional economic blocs, namely the Southern African Development Community, East African Community, and Common Market for Eastern and Southern Africa, agreed to expedite efforts to unite into a single, trans-African free-trade zone to be known as the Tripartite Free Trade Area (TFTA).

 The TFTA would cover 26 countries stretching from Egypt to South Africa and from Mauritius to Namibia. The TFTA countries collectively account for 632 million people, or 57 per cent of Africa’s population and nearly 58 per cent of its gross domestic product.

A continental free-trade area would give Egypt free access to seven other African nations. It would create free trade for goods immediately and the hope of introducing services and intra-continental investor opportunities at a later stage.

The African continent needs further financial support to encourage investors and to make up for its many infrastructure challenges. Over 645 million Africans currently do not have access to electricity, 700 million do not have access to clean cooking energy, and 600,000 die each year from indoor pollution as a result of a reliance on biomass for cooking.

Africa’s share in global trade and industry remains low, currently accounting for just 1.9 per cent of global manufacturing. As a result, the continent urgently needs to improve its industrial sector and increase the added value of everything it produces, instead of relying on exporting raw materials.

Africa has great potential for growth since it has 65 per cent of all the arable land left in the world. While the global economy is projected by the International Monetary Fund to grow by three per cent this year, Africa is projected to grow by 4.4 per cent in 2016 and strengthen further to five per cent in 2017.

Akinwumi Adesina, president of the African Development Bank Group, said that the bank will continue supporting and financing development projects in Africa. In 2015 alone, Adesina said, the bank approved projects to the tune of $9 billion, with $2.2 billion earmarked for private-sector projects.

add comment

  
 
 
  • follow us on