Africa lures investors at Davos forum | Business| Economy and finance news from a German perspective | DW | 25.01.2013
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Africa lures investors at Davos forum

Many African politicians are attending the World Economic Forum in Davos. Above all, they want to find investors and present their nations in the best possible light, but even problems can turn into selling points.

The heads of state and government from Guinea, Ethiopia, Nigeria, Rwanda, Tanzania, Kenya and Mauritius are debating the future of their continent over dinner at a Hotel in Davos. In the jargon of the World Economic Forum, the event is called an "Interactive Dinner Session." Journalists are not allowed in, but entrepreneurs and investors are.

South Africa's President Jacob Zuma (right in the top picture) is in Davos, too, but obviously has something else on the agenda. Zuma's trying to downplay the violence surrounding miners' strikes in his country last year when almost 50 people lost their lives. After all, violent strikes and calls for much higher wages could put off investors, couldn't they?

"We have seen the worst, we are dealing with the matters," Zuma said. "All of us - organized, labor, business, the government - we are dealing with it to correct it because it cannot go back to a situation that created the impression that there's no governance of this matter."

Eying investors

Behind South Africa, Nigeria is the biggest economic power in Africa south of the Sahara. For a long time, the country has focused solely on its oil exports, neglecting its agriculture. But that is to change now. Nigeria wants to modernize its agriculture via a large-scale investment program. The aim is to become self-sufficient or even to become an exporter rather than spending billions on the import of agricultural produce.

Agriculture Minister Akinwunmi Adesina was straightforward about why a whole delegation from Nigeria has come to Davos.

"Absolutely, I have tried to attract investors," Adesina told DW. "President Goodluck Ebele Jonathan hosted a fantastic meeting attended by global CEOs, and today I've been in discussions with Syngenta, DuPont and several others that are talking to us about coming to Nigeria."

"Why are they coming to Nigeria? They can see the opportunity," he continued. "And I can tell you, there is no better place to be for agriculture in Africa than Nigeria."

No trade without roads

In other sectors, too, investors marvel at the opportunities the African continent has in store for them. That also applies to the extension of mobile telephony and Internet services. Sunil Mittal, the founder and CEO of the Indian telecom firm Bharti, has been active across Africa for 17 years.

DEBRE ZEIT, ETHIOPIA - AUGUST 01: Two African boys play with a cellular phone Photo by Justin Sullivan/Getty Images For The Clinton Foundation)

Mobile telephony has a huge growth potential across Africa

"All emerging markets offer growth," said Mittal. "But today, really the last real bastion of big growth is the African continent. One billion people of which 500 million are connected and 500 million are yet to be connected. And those who are connected want to move up to the next level of mobile Internet. And that's what excites investors like us."

But poor infrastructure in many African nations has proven to be in the way of economic expansion. Electricity and water supplies are often miserable, not to mention the lack or poor condition of roads.

"The infrastructure gap is significant in Africa," said Nigerian President Goodluck Ebele Jonathan. "And of course that is why trade between African countries is quite limited, because it's easier to move from African countries to Europe and the rest of the world than to move from one African country to the other."

Doubling growth?

Considering such obstacles, it's amazing to see many nations south of the Sahara log 5-percent annual growth. The figure could be twice as high, if more were invested in critical infrastructure.

"Can you imagine if Africa would start investing heavily into infrastructure, what it can do to uplift people from poverty - the economic growth rate that is required there," Mittal said. "So to my mind, the single biggest factor remains focus on infrastructure."

Some studies suggest that some $100 billion (74.2 billion euros) would have to be invested in Africa's infrastructure each year to achieve real improvement. African representatives at the Davos forum hope to raise awareness for that issue. And they argue that whoever fails to invest in Africa today, will be sorry tomorrow.

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