African countries must welcome cross-border investors
Last week, the Minister of Trade and Industry, Dr Ekwow Spio-Garbrah, made a call on African countries to open up their markets to African investors in order to promote and deepen intra-regional trade.
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Trading among Africans averages a paltry 12 per cent, while the trade volume with the rest of the world, especially Europe, Asia and United States, form the bulk of the commerce. This is in spite of far-reaching efforts to promote regional integration in several blocs across Africa.
While the Economic Community of West African States (ECOWAS) has been at it since 1975 with several protocols to promote the free movement of goods, people and capital there are still artificial barriers that inhibit a seamless trading system in the sub-region.
Some countries go to the extent of directly banning imports from member states or making it challenging for investors to settle in their countries. South Africa and Nigeria are notorious for these aberrations and Dr Spio-Garbrah, a diplomat, statesman and international public servant ,did not mince words in his admonition to those countries to open up to investors from Africa (refer to our second story on the front page).
The GRAPHIC BUSINESS would wish to associate itself with the comments of the minister and urge African countries to take the issue of fair competition very seriously. Currently, almost all countries on the continent have embraced democracy and the liberal economic outlook. Whether it is the regional blocs or the mother African Union, there are protocols that permit Africans to invest and trade among Africans.
It is the only way to harness the various potentials and natural resources the continent has to its advantage. It is the surest way of keeping capital formation within the continent, without much flight to jurisdictions offshore.
Expertise and competitive advantages also vary and differ among African countries. Therefore, while Ghanaians and South African can export their mining prowess to Mali and Uganda, other East African nations can export their skills in leather processing to other parts of the continent to derive more from the resources the continent is endowed with.
The continent’s youth population is ever enlarging and tipped to be the most youthful population in the world by the next 15 to 20 years. It is only cross-border investments and trading that can help create the needed jobs to engage the teeming youth.
The call on South Africa, therefore, to open its investment environment to other players from Africa is a good call that must not fall on deaf ears. Indeed, South African has the resources and a comparatively developed economy with high number of educated and skilled individuals which should make a good destination for Africa Direct Investments (ADIs).
Ghana, for instance, boasts of some well performing state-own enterprises that can invest safely in South, Nigeria, Kenya, Botswana, Rwanda and the likes just as the likes of MTNs, Shoprites, Games, Rhapsodys and Mr Price have done in Ghana.
Creating an enabling environment should go beyond the local businesses into welcoming investors from within the continent. It is definitely one of the safest and fastest ways of further strengthening growth on the continent, creating employment, adding value to natural resources and putting money in the pocket of the creative youth of this and subsequent generations.
However, it is also true that African companies and corporations need to be ambitious, aggressive and pursue policies and strategies that would transition their businesses from one generation to another and from one country to another, starting from Africa.
