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Mauritius: Africa, The Oasis for Local Investment
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L'Express (Port Louis)
OPINION
23 April 2008
Posted to the web 23 April 2008
Afsar Ebrahim
Port Louis
The Black continent is set to become the ray of hope for Mauritius Inc. With its limited resources and restricted market, Mauritius has no other alternative than to look to its neighbour, which provides myriad opportunities. We are bound to take the road to investing in Africa; it will be a hard, exciting journey and, above all, one with hopes of exceptional returns.
In the context of the SADC conference on poverty and development, attended by heads of states and governments of the 14 member states, hopes have been revived for an increased cooperation between Mauritius and the neighbouring African states on the food and other issues.
Mauritius has been hosting since Friday 18th April the Southern African Development Conference on Poverty and Development as a recommendation of the Clinton Initiative. An array of distinguished dignitaries and several Heads of States from Africa were in the island to debate on how to effectively address the poverty endemic. Veni, Vedi, vici. They are indeed very impressed by the legendary Mauritian welcome and hospitality but more so, they have realized that, in addition to our hackneyed beach image, we have re-invented ourselves as a vibrant 21st century business hub.
The African leaders are inspired by our achievements in:
- Governance
- Political stability
- Rule of law
- Education
- Infrastructure
- Vibrant private sector
Mauritians, on the other hand, generally have a skewed perception of Africa. For the majority of us, Africa is all gloom and no hope, a reflection of what the Western media love to depict; Mugabe and his astounding four-digit inflation rate, civil wars, AIDS, human rights violations, poverty, despotism and nepotism.
Africa is not one country with a single set of problems. The various countries that make up the second-largest and second most-populous continent, after Asia, have their own distinct style, their varied cultures, their unique resources, their tribes, their religions and their own special way of doing business. Africa, to me, is a mixed bag of opportunities and risks; we simply need to learn to understand Africa and educate ourselves leaving aside any prejudice and preconceived notions. There is more sunshine than clouds, only if we dare to look.
Great leadership
Africa today is on the road to structural recovery. There is a new wave of political leaders who have emerged and committed to "get things done". They are business and investor friendly as wealth creation (and its distribution thereof) is the only sustainable way of winning the fight against poverty. Some of this new breed of political leaders are: Kagame from Rwanda; Museveni from Uganda; Kibaki from Kenya; Kufuor from Ghana; Ravalomanana from Madagascar; Kikwete from Tanzania; Sambi from Comoros; Mwanawasa from Zambia; Michel from Seychelles.
Great partners
In addition to strong leadership, Africa is being supported by a new generation of influential economic trading partners and probably, new masters: China and India who are fighting a proxy war of influence against US/EU on African soil. It is clear that the level of investment made by the newly found partners is changing the balance of influence and power. The war for Africa commodities and resources has begun. The traditional and pioneering partners/colonial powers like France, UK, Belgium and Portugal have clearly been left behind. China's trade in Africa reached some staggering $50 billion in 2006.
"Mauritian management is an expertise, which is well soughtover Africa.Opportunities exist, financing available, management is readybut projects needto be identified."
Vibrant Private Sector
This new African renaissance is also driven by the emergence of a private sector and also by foreign capital flows. Financial reforms and privatizations have attracted foreign direct investment and driven African stock markets, perceived as a defensive stock in the wake of global markets meltdown due to low correlation volatility. The financial system is at different stages of development but what matters is that significant development is underway.
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African economies have benefited from sound macro economic developments. Growth rates in most of the African economies have been strong and sustainable. Forecasts are even better in light of rising commodity prices. After a long time, there is a shift in terms of trade favourable to Africa as its produce is now commanding premium pricing.
The challenge now is to exploit the value additions by processing their basic commodities. Rapidly growing commodity prices are not sustainable in itself in the long term unless there is value addition in processing undertaken in the producing country itself; e.g. Coffee is produced in Africa at $1 per kg. It is sold in Europe for $20/kg after being roasted and ground. Therefore, Africa donates $19 to Europe in terms of opportunity loss.
What's for Mauritius?
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