Africa-Press – Mauritius. 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 sought over Africa. Opportunities exist, financing available, management is ready but projects need to 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. 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? The window of opportunity is opened only if we are daring.
Mauritian capital, Mauritian management and Mauritian marketing should ensure that the benefits of the value additions are created and retained in Africa.
There is excess liquidity and supply of foreign currency in the Mauritian economy. The demand is only driven by imports. There has been no substantial outward investment made by Mauritius Inc into Africa lately and this needs to be revived.
It will also increase demand for foreign currency, which is appreciating for once due to excess supply. Export-driven companies are complaining about an appreciating rupee even though procurement costs are being reduced, which is in itself a key competitive advantage.
Demand for foreign currency needs to be propelled, not by intervention, to reach equilibrium. What better way than to meet investment requirements in Africa.
Mauritian Inc should be encouraged, educated and pushed to look west! The Board of Investment has been successful in positioning Mauritius as an investment decision.
We need a similar exercise for positioning Mauritius as an investor into Africa. We need a concerted effort to explore and exploit opportunities that Africa offers.
Sugar, Agriculture, Leisure, Banking, Telecom, Insurance, Manufacturing, Trading, Consumer Finance are all industries where Mauritius Inc has excelled over the years and these can easily be replicated. Funding for investments in Africa, be it equity or debt, is readily available.
The risk appetite and risk profiling for Africa has favourably changed thanks also to Africans working in the first-world financial institutions and this has helped shaping the thinking process on African opportunities.
● Win-win situation for Africa-Mauritius Africa wants strategic partnerships that are just and equitable; partnerships that will not exploit unfairly its raw materials, like the past colonial rulers.
Africa needs partnerships based on respect, trust and equity. The continent today provides great value for investors with tremendous opportunities and risks, which need to be identified, managed and mitigated.
With the food crisis, investing in Africa is not an option but a necessity not only in agro-industries but also in all sectors. Every opportunity must be tapped into.
Mauritian management is an expertise, which is well sought over Africa. Opportunities exist, financing available, management is ready but projects need to be identified.
To mitigate risk, a facilitator who knows the terrain is needed for his/her knowledge of the local market, to identify the right strategic partner and to help achieving the objectives of Mauritius Inc as an investor.
Going it alone is a risky proposition. My firm and I, for sure, are staunch believers in Africa. President Thabo Mbeki had an inspiring title for his inaugural address, ?I am an African?; let?s go a step further, let?s re-brand our investment strategy for Africa, ?Mauritians: Proudly African?.
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