Let me start by thanking The Times for convening this important summit so we can collectively reassess how Africa is viewed and, together, explore the diverse business potential in Africa, including my own country Rwanda. In fact, our hosts tonight should be commended for joining the debate on taking investment in Africa to the next level – it is a pleasure to be part of this engaging discussion.
I am convinced that Africa presents the next frontier for business and offers a prize market that every investor should seriously consider. Unfortunately, seizing this opportunity is hindered many times by how Africa is perceived more so than the reality on the ground.
Despite sustained progress over the past decade or so, Africa is still, for the most part, perceived and judged not so accurately and sometimes unfairly. It is regularly portrayed as a homogeneous place where conflict, disease and poverty prevail – rather than a Continent of 53 diverse countries, home to over one billion people with almost as many different stories and experiences.
Certainly, like all other regions, there has been, and remain, cases of conflict and instability – however, this should not be cause to paint the entire continent with the same brush. I do not imagine a scenario where, for example, the whole of Europe would be categorised today as a crisis area “bankrupt” because of the recent debt and financial issues we have recently witnessed, and the circumstances of a few countries.
Similarly, operating in most parts of Africa is often claimed to be “highly risky”, even when sufficient time and effort have not been spent on proper analysis of the circumstances affecting each country. There, quite simply, is not one region in today’s political and economic landscape that is entirely risk free.
Although the prevailing evidence on Africa warrants a different assessment, external commentators seem unable or unwilling to embrace a more positive image of the Continent – and despite concerted efforts by various countries, including Rwanda, to reform politically and economically they are all still viewed as requiring the old approach of charity, and not investment as much.
It is regrettable, therefore, that in a region where an investor can receive higher returns than anywhere else, only 3% of global FDI flows to Africa. I say regrettable because both sides lose out: the investor on potentially lucrative business, and our Continent as well, because it is through increased investment that Africa shall realise its full development potential.
My contention this evening is this: not only is the reality on the ground in Africa different to what is portrayed, but the conditions for investments are ripe.
Africa has shown remarkable resilience, recovering quickly from the global economic downturn and – according to projections by the African Development Bank – is expected to grow by an average of more than 5% in 2011. Rwanda’s economy alone is projected to grow annually by over 7% in the next three years – in fact, last year we grew by 7.4%.
African countries have increasingly adopted responsible fiscal and monetary policies that are investor-friendly and have contributed to the rising economic performance. Exchange rates are relatively stable; inflation is low and debt management has greatly improved.
Similarly, much of the continent is more stable than it has ever been, giving our different countries the opportunity to grow our economies and respond more readily to our citizens’ needs.
In Rwanda, we have endeavoured to create and sustain political stability. We restored peace and security, promoted reconciliation and empowered people to actively participate in their own development.
On the business front, our efforts to eliminate corruption, ensure transparency and accountability in the management of public resources has created a friendly environment for investors. For example, it now takes just one day to start a business because legal procedures and other documentation have been streamlined.
We have also strengthened the governance and legal framework to protect businesses and ordinary citizens, and our commercial courts function to ensure that disputes are fairly adjudicated within three months.
Aside from increasing political and economic stability, Africa’s primarily young population, with its growing urban middle class, generates greater internal demand for the consumption of goods and services. Projections indicate that by 2020, the number of middle class Africans will almost double, with combined consumer spending of USD $1.4 trillion.
This is a significant part of the population both as consumer and workforce. That is why in Rwanda we are investing in health, education and training, science and technology to create a knowledgeable and skilled labour force ready for this new economic reality.
Now despite all this, and given the staple coverage on Africa, one may still be tempted to ask: is there sufficient economic and political stability across Africa to inspire investor confidence?
My answer would be: certainly.
Perhaps the question we should be asking is this: will there be a change of attitude towards Africa that supports trade and investment aspirations? And of course, the same question goes to Africans themselves: whether they have the attitude to believe in themselves, and to act in way that promotes investments.
What we would all benefit from is more in-depth analysis and reporting of the reality on the ground, which I believe would clearly show a range of investment opportunities to be seized.
As you all know, Africa is a resource rich continent, and while many of these have been put to good use, others remain untapped.
Demand for these resources, such as oil and other energy sources, minerals and agricultural products will continue to grow – and we welcome investors in all these sectors. But Africans must remain at the driving seat and, as in the rest of the world, should be allowed to do business with whoever presents the most attractive offer, all relevant factors considered.
That is why African countries must build their capacity to identify and accurately document their natural resource availability so they can better facilitate investors and negotiate on level ground. In fact, private investments also play a crucial role of retaining capacity, as young, gifted professionals find rewarding livelihoods in their own countries.
And even in countries where natural resources are not abundant, investment in non-resource, IT and services-driven sectors like tourism, financial markets and telecommunications spur significant economic growth. This is one of the reasons why Rwanda has invested in ICT infrastructure to make doing business easier and faster.
In addition, across Africa we have been pursuing a policy of regional economic integration in order to create larger markets, reduce trade and investment barriers and increase the free movement of people, goods and services.
Regional economic blocs like the East African Community, the Southern Africa Development Community, COMESA and the Economic Community of West African States already have mechanisms to promote regional investments.
We need strong partnerships between business and governments that turn opportunities not only into profitable ventures but also have a lasting positive impact on the social and environmental wellbeing of citizens.
In Rwanda, public private partnership opportunities exist in mining, energy generation and distribution, infrastructure development such as the construction of a new international airport and a regional railway line linking us to the port of Dar es Salaam and other railway lines to EAC states that aren’t effectively serviced. Agriculture also remains a sector with a lot of growth potential. Investments in these areas will need to be serviced by ICT, banking and other financial services, which have been steadily modernized.
I can confidently say that Rwanda is open to business, and you will find us to be people who play by the rules and respect our commitments.
We look forward to working with partners willing to join us on our journey of mutually beneficial prosperity and socio-economic transformation of our country, and the African continent as a whole.
As I said at the beginning, Africa holds much potential for profitable business and I invite you to explore these opportunities with us.
Let me conclude by wishing you a successful summit– that, from my standpoint, moves beyond the stereotypes towards a new business relationship with Africa.
Thank you for your kind attention.