Africa 2016, the continent is ready for business.
The conference was held in Sharm-El-Sheikh in Egypt on the 20th/21st of February 2016. It was hosted by Abdel Fattah Saeed Hussein Khalil el-Sisi, the President of the Arab Republic of Egypt with the primary intention of finding new ways in which panafrican investments and business opportunities can be improved, along with an increase in International trade.
Whilst the focus of the conference is not restricted to the private sector, it does once again feature predominately on the agenda, specifically; IT, Food, Tourism, Finance and Retail.
The delegates attending and speaking at the conference include; Political leaders, Heads of State and policy makers from around the world, Financiers, legal experts and representatives from leading international organizations, all of whom are considered potential investors.
By sharing ideas and lessons learnt, the forum believes that investments can be accelerated, creating more jobs as well as sustainable growth and development.
In addition to hosting the event, Egypt has also proved its commitment to improving business opportunities in Africa by having already invested over $8 million on the continent, as well as helping to facilitate the launch of the “Tripartite Free Trade Area” (TFTA).
The “Tripartite Free Trade Area” (TFTA)
The TFTA comprises of 27 African countries and is a free trade agreement between COMESA, EAC and SADC. It was signed on the 10th June 2015 however it is yet to be ratified.
Five days after the signing of the TFTA agreement, negotiations began on the creation of a “African Continental Free Trade Area” (CFTA) which is expected by 2017 to include all 54 African countries as opposed to just 27.
This type of regional integration is seen as essential by key policy makers in Africa, in order to avoid incompatible legislation and therefore unnecessary and contradictory overlapping or conflict.
This is not the first time such regional trade agreements have been made, with a number of others over the last few decades. Whilst it is difficult to precisely ascertain the success of these types of trade agreements, exports between the member states did increase from $2.3B to $36B between the years of 1994 – 2014.
Africa is very much open for business, it has huge potential and its growth is evident when you look at the current economic figures; GDP is in excess of $2tn, unemployment levels are falling and consumer spending has just exceeded $1tn.
The global economy is forecast to grow 3% in 2016 however in Africa growth is forecast at 4.4% in 2016 and 5% in 2017, making it an excellent investment opportunity.
Investments will never reach their full potential if investors are fearful and/or unclear on how partnerships work in Africa, including how it differs from other markets. Trading with Africa is very different to trading with Europe, the Gulf or Asia and this is an important part of the message coming out of the conference.
There is currently a huge focus on the young population, in fact an investment in education is seen as a crucial part of ensuring the continent can not only meet its needs now, but also in the future. The economic growth of a country with an untrained/unskilled population will always stall.
For Africa to ensure it can successfully compete with the rest of the world and therefore ensure long term growth, barriers need to be broken down.
Hailemariam Desalegn Boshe, the Ethiopian Prime Minister stated “Today, in our globalized world no country can achieve development in isolation”.
The President of the African Development Bank, Akinwumi Ayodeji Adesina was also very clear when he stated that a number of key challenges have to be dealt with before success can be attained, “We call them the High 5’s for Africa: Light Up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the Quality of Life for Africans.”