Taking action to de-risk some key sectors and driving connectivity on the continent will create an investment-ready environment for Africa, according to Prime Minister Edouard Ngirente.
He was speaking during a panel discussion dubbed "Conversations with Heads of State: Accelerating Africa's Economic Transformation" as part of the Africa Investment Forum 2023, in Marrakech, Morocco, on November 8.
The three-day forum held under the theme: "Unlocking Africa's Value Chains", is Africa's major marketplace for investments. It brings together Heads of State, government officials, captains of industry, philanthropists, investors, and development finance institutions to advance investment-ready deals. It aims at stirring investors' interest in bankable deals in energy, agribusiness, manufacturing, and other sectors where Africa holds a comparative advantage.
Ngirente shared the panel with other four Heads of State and Government including; President Samia Suluhu Hassan of Tanzania, Azali Assoumani of the Comoros and current Chairperson of the African Union (AU), Julius Maada Bio of Sierra Leone, and Mia Mottley, the Prime Minister of Barbados.
The discussion addressed Africa's potential to play a larger role in global value chains by looking at ways to accelerate its industrial development and explore how best to drive value addition on the continent.
Ngirente noted that it is important to discuss investment actions because Africa already knows its potential, capacity, and challenges. "Implementing Africa's agenda 2063, we need cohesion and synergy to work together as a continent."
According to him, this can be driven by governments' action to de-risk sectors of priority for investment flow while channeling efforts to increase connectivity on the continent in terms of infrastructure to facilitate the movement of goods and people.
"We have been talking about south-south cooperation but we cannot work together if there is no movement of people. We first need skilled people but also facilitate their movement from one country to another."
Ngirente shared Rwanda's journey of creating an enabling environment for investment and economic growth, mentioning key contributing areas of intervention including national security, investment in infrastructure, progress on universal electrification, driving internet penetration, and a visa-free regime, among others.
President Maada Bio said that African governments need to diversify economies from common commodities such as oil and gas, cocoa, and coffee whose price volatility greatly affects countries.
He added that there needs to be value addition for increased job creation and revenue that is greatly needed for development and retaining Africa's youth on the continent.
Premier Mottley believes that the global south should be working together in key areas of just industrial strategy, lowering the cost of capital, and substantively working together to expand markets through enhanced connectivity to create a platform for a financial and economic capacity to become more resilient in the current climate crisis.
Put your money where the future is
Adesina Akinwumi, the President of the African Development Bank (AfDB), said African economies present some of the best investment opportunities in the world.
"As investors, put your money where the future is. The future is in Africa. The continent's default rate on infrastructure financing is the lowest in the world at 2.1 percent compared to Europe which is over 10 percent. Africa is not as risky as you perceive," he said.
Available data suggests that the number of deals in private equity and venture capital in Africa increased by 91 percent from 211 in 2018 to 404 in 2022, with a total transaction value increasing from $4.7 billion to $8 billion under the same period.
"Invest in Africa and reap high-risk adjusted returns...let's be concrete, bold, and decisive," Akinwumi noted.
Since its inception in 2018, the AIF has drawn $143 billion in investment interests, and closed investment deals worth $11 billion - ranging from liquefied natural gas, renewable energy, agribusiness, industrial manufacturing, creative industry, housing, and transport.
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The Forum has the ability to crowd in private sector financing for transformative projects with huge developmental impact. This is conducted by profiling transformational projects, matching the projects with investors, convening project stakeholders, and offering de-risking tools, designed by the African Development Bank and its partners.
Transactions are sourced from the investment pipelines of the AIF's partners including the African Development Bank, Africa50, Africa Finance Corporation, Afreximbank, Development Bank of Southern Africa, European Investment Bank, Islamic Development Bank, and the Trade and Development Bank.The Trade and Development Bank is a trade and development financial institution operating in eastern and southern Africa.
Formerly the PTA Bank, it is the financial arm of the Common Market for Eastern and Southern Africa, although membership is open to non-COMESA states and other institutional shareholders.
