As part of the U.S.-Africa Business Summit being hosted by the Corporate Council on Africa this week, four African heads of state, participated in a Presidential Roundtable on regional integration. The presidents of Rwanda, Ghana, the Republic of Congo, and Sao Tome and Principe answered questions, along with Brian Herlihy, CEO of Seacom. Questions were posed by David Senay, CEO of Fleishman-Hillard. Following are excerpts.
Investment is much easier than it used to be in Rwanda. The Financial Times says it takes an entrepreneur just two procedures and three days to start up a business. I'm not sure there are many places in the world where that happens. Can you tell us how you did this?
President Paul Kagame - Rwanda: What we have done is what other people can do. It is not magic, but we have focused on stabilizing our country, making sure that there is peace and security; second, build institutions of governance that deliver the public good as required, and then interact with the rest of the world in a way that we should be able to do it and working within the region.
But for us to be able to achieve what you have said in terms of being able to make it easy for people to do business in Rwanda, we had to take stock of what the situation has been in Rwanda, in the region and in general our continent … and after identifying those obstacles, then we started working on them, especially the ones that were within our means.
It was about putting in place institutions that would deal with matters of investment and trade … putting in place laws and regulations that would facilitate … establishing and doing business. Most importantly, having put these in place, you have to make sure that they work. You can have good laws, you can have good regulations, all kinds of good things that are written on paper and very impressive. But if you don't follow through and make sure they serve the people they are supposed to serve then things will go wrong.
You have major ambitions for Rwanda for perhaps a regional hub for IT, for financial services, a regional airport, better roads, a rail link to the east coast of Africa. What are your highest priorities for the next years given the economic pressures right now, given the global recession? What do you want to accomplish next?
President Kagame: What we want to accomplish next builds on what we have already put in place that we need to consolidate, and also builds on the self-belief that we can actually do these things. Not only Rwanda. It will take Africa and the Africans ourselves to really take the lead in transforming our societies and develop our economies. Even if we are to partner with different people, still we have to take the lead ourselves.
But infrastructure is very important, for example, in facilitating businesses. You cannot talk about increased volume of trade when there are no roads, there are no rails, there are problems of air transport. At the same time you cannot talk about increased investments unless you can show that you will be able to supply electricity to industries. You cannot talk about communications and all that comes with it … unless you are able to put in place Internet and infrastructure providing that.
So focusing on infrastructure and believing that we can actually do it is what we are building on. The other major focus is on how we uplift our people … and bring them to participate in businesses at different levels and therefore be able to build on the infrastructure … This is the best way to fight poverty, through business, and this is the major focus we have in the next few years to come.
You preside over a nation of 24 or 25 million people with oil reserves, rich in precious metals and other commodities – a diversifying economy. You have the presence of many multi-national companies operating in Ghana. Tell us a little about your plans, or your vision for regional integration in West Africa. And we'd also like to hear a little bit about the economic partnership agreement that you're in the process with other West African nations of negotiating with the European Union. Because that is a whole other phenomenon going on in Africa right now.
President John Atta Mills - Ghana: First of all, every political leader, especially in Africa, should ask himself or herself, why am I in power? To me the answer is very simple. The only justification for being in power is to help improve the living standards of our people. Nothing else matters.
How do I do this? By making sure that you have the necessary resources, you have the manpower, you create the necessary environment to promote businesses, either locally, or to attract foreign direct investment. Foreign direct investment has no fixed allegiance to nationality. It goes wherever it is most welcome.
Now for us in Ghana we have realized that we cannot go it alone… We believe that charity begins at home and therefore the issue of regional integration is very important … In unity lies strength.
We are a group of very poor countries but we are very rich in national resources and therefore we have very common interests if we pool our resources. For example, if we strengthen cooperation among us we can have common services, common infrastructure, common energy programs. We think therefore that in West Africa the need for us to integrate is now more important than ever. We have been making strides although I must say we are not moving at the post that I think would guarantee us the kind of development we want in the time avail to us … In West Africa as a whole we have not done as well as we should.
(Regarding interim trade agreement with the European Union) let me say what is the use of an economic partnership agreement where you do not know what it is that you are putting into the partnership? There must be a level playing field, you must make sure that there is realistic quid pro quo. You must also make sure that from this partnership you will be able derive benefits [which will be] to the advantage of both partners.
Ghanaians must be empowered to take advantage of the partnership agreement. In West Africa right now you have three different trade regimes … How can you achieve anything when you have this divergence of interests? But we are working hard toward this.
The important thing that we should all realize, especially in West Africa, is that the people who voted us into power don't owe us anything. They only want us to help improve their standard of living.
It is important that we bear this in mind. Sometimes certain events, certain positions taken by us political leaders are helping our people lose confidence in us. What our people have is only hope in a better future and we cannot disappoint them.
One of the concerns with economic partnership agreements used to be the whole question of market access, and that can go in different directions. Here you are trying to create new entrepreneurs, domestic businesses that can help your own economies and create employment. When you enter into trade agreements, you're opening yourself up to competition from other countries, whether they're within Africa, from Europe, wherever. Is that a real concern for you or not?
President Mills: Well, it is a concern. That is why I said that we must be sure that the parties to the partnership are equal. Equal in the sense that you will be able to derive the maximum advantage from this. Now, very often we have goods dumped on us. Sometimes you find that you signed this agreement but you don't have a reliable supply chain. What we think is that, in these agreements, we should talk about a program for development. We should ensure that we are in a position to export and to export meaningfully.
A lot of countries are quite unhappy about some of these partnerships because they say there is no element of reciprocity - that we live an inter-dependent world and nobody is going to open their markets to you but we have to fight for this. Poor countries, if we are going to develop, must have access to the markets of the rich countries. It shouldn't be the other way around. But there's the question of quid pro quo and we'll insist that we derive the maximum advantage from any such agreement.
You're president of a country with, I think, more than four million people, [and] large oil reserves. We'd like to hear a little about your own plans for diversifying your economy. I know that you have some infrastructure priorities for your own country. Can you talk about what you're doing in the Republic of Congo and then tie it back into this discussion of economic integration with your neighboring states.
President Denis Sassou Nguesso - Republic of Congo: (as translated) We believe that the development of Congo relies on the regional integration of Central Africa … This represents a market of more than 100 million consumers. … These are ten countries with huge potential and a young population, who only need to be educated because training is a very important issue.
We are lacking roads, railways, airports, electricity, and we have a lot of potential in the Congo basin for electricity. If you only take the Inga dam in DRC you could produce electricity that could provide for more than the central African countries.
We think that economic integration goes through the development of basic infrastructure. In our country in the last decade we emphasized basic infrastructure, roads, airports, we built some hydro-electric dams and we are producing electricity from gas because we have oil and gas also … Now we are building the fiber optic to improve the capacity of Internet and we will follow these efforts.
We think that through regional integration … we will be able to improve the living conditions of our population by working in collaboration with other countries of the region.
You are representing, I believe, the smallest country of the 53 in Africa and you are offshore. The challenges of integration must be very important to your country especially now that you're going to be doing oil exploration, trying to diversify your own economy beyond your primary industries, cocoa and so forth. So can you talk about from your perspective, what integration means to a smaller country in Africa.
President Fradique de Menezes - Sao Tome and Principe: Regional integration is very important for Sao Tome and Principe. The problem here is we [have] a different language. We are Portuguese and the sub-region is basically French-speaking countries. We are not a member of the monetary union of central Africa, the CFA. We have our own currency and just tried to link our currency now to the euro about three months ago.
We are one of the only African countries which has this law, a law which fixes how the resource of oil be used, so nobody can touch the oil resource. All the money is sent to a U.S. Treasury account. We created an account in the U.S. Treasury. Each year when we need some money we go to that account and we transfer the amount for the budget.
This is to protect the future generation because it is said we have oil resource. We are making some drilling. We have a joint development zone with Nigeria.
We believe we cannot develop a country without regional integration. We belong to a sub-region and we must understand each other … We are thinking about the island country not only as Sao Tome itself. We are encouraging investors that in Sao Tome arrive to the central African sub-region.
The first container terminal in Africa will be in Sao Tome. Annually we are talking about three million containers will be stored in Sao Tome and from Sao tome small boats will come and send them to the continent. We want to use the island as a hub for the sub-region.
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Infrastructure communications, wireless communications, electricity, obviously are going to be the lifeblood of economic development going forward in Africa. Tell us about what your company and other companies are doing to try to accelerate that because it will make all the difference in terms of sustainable growth.
Brian Herlihy, CEO of Seacom: Through our studies we're starting to realize that the cost of doing business in Africa is incredibly high. We're a group with seven billion dollars [worth of] investments in Ghana, Rwanda, all of East Africa, in Guinea. You start looking at these costs of doing business. It's the cost of energy, the cost of communications, and it's corruption. When you land at Kigali airport and you drive out the first thing that you see is business not corruption. The leadership in Rwanda is absolute evidence that that is being implemented.
Seacom is the first submarine fiber optic cable to connect south and east Africa to the rest of the world. It went live two months ago. But you go back to this cost of doing business. All the presidents have said that communications and power are really enabling, sustaining and bringing up the people but it's also what attracts foreign direct investment.
Infrastructure in Africa has been led by supply side economics. There isn't a belief that you should build a road until there is a mine there that's going to pay for that. There isn't a belief that you should build a hydro [power station] until there's a major industry there.
But with Seacom we realize there's a huge amount of pent-up demand in communications. Coming from a group that was American owned [we] realized we weren't going to succeed as an American company so we turned to partners in Africa and we're now a 75 percent owned African company and we're very proud of this.
But it was also a necessity - a necessity to navigate between real political risk and noise, a necessity to understand markets in Africa, also a huge revelation that there's a huge amount of money in Africa looking for smart investments. So we're trying to figure out how do we evaluate market intelligence, how do we look at regional infrastructure in a way that understands demand economics as opposed to supply side economics? Not always have it be that the mines are determining that you should build a road, but actually build a road and a mine and other projects come forward through that.
I appreciate having the private sector voice here because all of the regional cooperation makes this much easier for us. It shows transparency, it shows cooperation, it shows a larger market to focus on. As the president of Ghana said you have to know who your partner is and what your getting from that partnership.
