Africa is Rising – But Much Remains to Be Done

Abuja, Nigeria, 9 May 2014 – Africa is on track to achieve the 5.5% economic growth in 2014 predicted by the International Monetary Fund, but it must create jobs, improve infrastructure, foster intra-African trade, fund the agri-business revolution and find new pockets of industrialization. This was the consensus of panellists at the closing plenary of the 24th World Economic Forum on Africa.

“I want us to drive quality, inclusive growth that creates jobs,” said Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance of Nigeria. She pointed to the housing sector and agriculture, which holds huge potential. “Agriculture matters and is three times as effective in reducing poverty. It is important for young people to understand that farming is “cool”, she added.

With the right infrastructure, enormous growth can be achieved from agriculture, said Hendrik du Toit, Chief Executive Officer, Investec Asset Management, United Kingdom. “This is where long-term capital is needed if you want to exploit the agri-business revolution,” he added. “One of the most momentous changes from a business point of view is that Africa is integrating itself, particularly via China. It is not just an African local market, but it is Africa in the world,” he explained.

Agriculture featured prominently at this meeting. The Forum’s Grow Africa Initiative partners doubled their commitments for agriculture and food security to $72 billion. So far, $970 million has been invested, resulting in 33,000 new jobs and support for 2.6 million small farmers.

Cross-border payment systems; transregional and pan-African infrastructure developments; deeper financial markets across the continent; the free movement of people, capital and goods; and exploiting short-term wins are the most urgent action points, according to the panel.

Claver Gatete, Minister of Finance and Economic Planning of Rwanda, noted that money cannot be raised just from the banking system. “We need to develop and link to capital markets. We have been relying on public money. We must bring in the private sector, which requires structuring investment [deals],” he said.

“It is Africa’s turn; Africa is rising and leadership and political will is emerging,” said Pravin Gordhan, Minister of Finance of South Africa. “As Africa becomes more connected to Western economies, there is optimism, but we must be aware of the risks of contagion and we must be aware of how to manage those risks,” he said. Gordhan noted that it is important to find “new pockets of industrialization”.

According to Julian Roberts, Group Chief Executive, Old Mutual, United Kingdom, “Huge progress has been made but to unlock Africa’s potential, much work must be done … Opportunities exist in each individual country, but the power will come in when the countries are working together.”

Africa has a great opportunity to realize its potential, but must put its house in order, said Jin-Yong Cai, Executive Vice-President and Chief Executive Officer, International Finance Corporation (IFC), Washington DC. “We must fill the infrastructure gaps and make economies competitive by establishing competitive industry sectors,” he added. To fast-track this process, Africa must ensure a supply of electricity and create a regulatory framework that allows investors to make money. “We need to work out the details and get rid of the perception of risk.”

Results from this 24th World Economic Forum on Africa, the first to be held in Nigeria, prove that Africa is rising. Elsie S. Kanza, Director, Head of Africa, World Economic Forum, reported that partnerships forged in Abuja resulted in $59 billion in an investment boost for the continent, which will create more than 230,000 jobs and support for 500 schools.

Li Keqiang, Premier of the People’s Republic of China, unveiled a plan to invest $42 billion in Africa, including $10 billion in investment financing; $30 billion extending credit lines; and an additional $2 billion into the China-Africa Development Fund. Other commitments were provided by the private sector.

To reinforce solidarity with the government and the kidnapped girls, Nigerian business people pledged $20 million to the Safe Schools Initiative, which will be equally matched by the government. The initiative is a partnership involving government, media, civil society, young people, parents and teachers to pilot 500 safe schools in Northern Nigeria.