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Africa’s growth has slowed considerably —EC President
Growth in Africa has slowed considerably since 2009, notwithstanding continued demographic growth.
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Combined with significant security issues, this trend exacerbates poverty, the President of the European Commission (EC), Mr Jean-Claude Juncker, has stated.
He said investment was also a key factor in transforming development policy and assistance in order to facilitate the attainment of the Sustainable Development Goals (SDGs) to address the multiple challenges facing both Africa and European Union’s (EU's) neighbourhood.
“Smart and sustainable investment can play an essential role in boosting jobs and growth in developing countries, bringing in more stability and improving conditions on the ground in fragile countries affected by conflict,” he stated.
Presenting his 2016 State of the Union address in Strasbourg, France, last Wednesday, President Juncker said the commission set out how it planned to further boost investment to support jobs and sustainable growth, both in Europe and globally.
The Commission, he said therefore, proposed to extend its successful European Fund for Strategic Investments (EFSIs) at the heart of its Investment Plan for Europe in order to increase its firepower and reinforce its strengths.
He said the commission further sought to set up a new European External Investment Plan (EIP) to encourage investment in Africa and the EU neighbourhood to strengthen their partnerships and contribute towards achieving the SDGs.
The EC President’s address, which was made available to the Foreign Desk of the Daily Graphic, through the EU office in Accra, said removing barriers to investment, the Commission had already tabled concrete initiatives to help support investment and facilitate the financing of the real economy.
This, the President stressed, involved lowering capital charges for insurance and reinsurance companies as regards infrastructural investments.
Some of the main challenges for developing countries remained achieving inclusive and sustainable growth and employment, he noted.
Foreign Direct Investments
As regards foreign direct investments (FDIs) going to developing countries, he said only six per cent went to fragile countries, pushing down the investment per capita to a level almost five times lower than in other developing countries.
Similarly, the cost of starting business was almost three times higher in fragile countries than in non-fragile countries.
On June 7, 2016, the European Commission adopted a Communication establishing a new Partnership Framework with third countries under the European Agenda on Migration, through which the EU had significantly increased its support to partner countries for managing migration and refugees.
Mr Juncker recalled the launch and rapid deployment of the initial €1.8 billion EU Emergency Trust Fund for Africa was a tangible example.
To date, projects worth around €930 million had been approved under the Trust Fund and the first ones had started to be implemented on the ground.
He said projects ranged from improving capacities to better managing migrant and refugee flows, to more long-term support addressing resilience, stability and job creation with a particular focus on youth.
Mr Juncker said another example was the EU Regional Trust Fund in Response to the Syrian Crisis.
“The fund provided for a more coherent, faster and integrated EU response to the crisis by merging various EU financial instruments and contributions from member States into one single flexible and quick mechanism with a target volume of €1 billion, primarily longer-term resilience needs of Syrian refugees in neighbourhood countries, as well as supporting host communities and their administrations, “ he stated.
The fund has now reached a total volume of €733 million, Mr Juncker added.
In addition, he said the Energy Union, the Capital Markets Union, the Single Market and the Digital Single Market Strategies, as well as the Circular Economy package contained specific measures that would remove barriers, promote innovation and further improve the environment for investment, if fully implemented.
Moreover, member states must continue to implement the necessary reforms to remove obstacles to investment identified in the context of the European Semester in areas such as insolvency, public procurement, judicial systems and the efficiency of public administration or sector-specific regulations, he advised.