At the Forum, Kofi Annan, who was the 7th Secretary General of the United Nations, commented that whilst “Africa, with the world’s most uncultivated arable land, has the potential to help end the global food security and nutrition crisis”, its governments will need to improve their infrastructure.
In addition, Sunil Bharti Mittal, chairman of India’s Bharti Enterprises, said during a panel discussion that “Africa needs to build its infrastructure and for this, you need to have much more alignment from within”. South Africa’s President, Jacob Zuma, added that the lack of infrastructure on the continent is to blame for poor intra-Africa trade, saying, “if we don’t have inter-trade, if we don’t open our borders, if we don’t increase the economy among ourselves, we are not going to succeed”.
According to Geoff Cook, CEO of Jersey Finance, these comments reinforce the findings of the ‘Jersey’s Value to Africa’ report, which was published last year by Capital Economics and commissioned by Jersey Finance. That report found that whilst Africa has the opportunity to grow 5% each year to 2040, to do so it will need to invest $85 trillion in its infrastructure. At current levels of investment, it will fall $11.4 trillion short of that and aid, domestic profits and local governments will only be able to plug 48% of this gap. The remainder, $6.1 trillion, will have to come through foreign direct investment.
Geoff Cook believes well-regulated International Finance Centres like Jersey can play a key role in routing that investment:
“These comments at the highest level of the World Economic Forum perfectly echo the findings of the report we published last year, which highlighted the importance of foreign direct investment into Africa’s infrastructure, buildings, machinery and other physical capital if Africa is to reach its significant growth potential. IFCs have a fundamental part to play in facilitating this kind of investment, and Jersey is in a prime position to offer the continent the assistance it needs by providing protection for investors, protection for African wealth, access to capital markets, efficient cross-border investment pooling, robust regulation and tax neutrality.”
Paul Clark, Africa Equities Specialist at Ashburton Investments, who have an office in Jersey, added:
“As Africa’s political and macro-economic environment improves and business conditions get better in general across the continent, it is important not to allow some of the negative situations to cloud ones view of the bigger picture. Africa is reforming from within and improving its operating environment and, as investors across the world look for investment opportunities, the improvement in Africa’s infrastructure challenges will be a key area for future returns. In the World Bank’s latest “Doing Business” report they point out that out of the top ten improving countries globally over the previous year, five were from Sub-Saharan Africa.”
The “World Economic Forum on Africa” is due to take place in Cape Town in June.