BOI Africa Partnership Conference calls for greater collaboration on investment promotion to boost African growth
The Board of Investment (BOI) kicked off its Africa Partnership Conference on 20 September, bringing together representatives of investment promotion agencies and industry representatives from Mauritius and Africa to discuss the opportunities and challenges of driving growth in Africa through greater collaboration on investment promotion. Two new MoUs were also signed between the BOI and the Swaziland Investment Promotion Authority (SIPA) and the East Africa Trade and Investment Hub (EATIH).
In his opening address, the Hon Pravind Kumar Jugnauth, Minister of Finance and Economic Development of Mauritius, highlighted that Africa still has far to go and a lot to achieve, and that it will require tremendous policy efforts, since Africa still faces deficits on many fronts.
The Minister highlighted that the new Africa Strategy of Mauritius would focus, first, on a partnership for development, with the aim to focus on collaborative learning models, adaptable and cost efficient solutions; second, on an innovative government to government approach, with a new model for cross border investing and trade that transcends multilateral efforts and taxation agreements; and third on capacity building, namely building human and institutional capacity in relation to FDI, transfer of technology and knowledge, explaining that citizens from 49 African nations can now obtain a visa upon arrival in Mauritius. He also noted the active role of the private sector, technology and innovation to get out of ‘middle income traps’.
The Chairman of the BOI, Gérard Sanspeur, focused on the role of investment promotion agencies in creating the right environment for a competitive economy and highlighted that the BOI had just held its first seminar on the blockchain, with the new Regulatory Sandbox Licence setting the right legal framework. He noted that the BOI was increasing its role as a business facilitator, that it had opened an office in Johannesburg earlier this year, and that it hoped to expand into other countries in coming months.
Offering an external perspective, Bostjan Skalar, CEO of the World Association of Investment Promotion Agencies (WAIPA) from Slovenia said it was important to recognise that investors decide first on a region and then on a particular country, and it would be easier to attract investors ‘if we join forces’. He also delivered the stark message that ‘to receive FDI you have to make your pastures appear greener than they do at present. The British MP, and former Africa Minister, James Duddridge stressed that ‘aid alone will not eliminate poverty in the continent’ and that what is needed is to unleash the power of the free market as profitable businesses pay people and taxation, leading to greater employment and better paid jobs. He spoke in defence of low tax economies but not ‘no tax economies’ and said that Mauritius should be proud of its position, while Africa should look towards a flatter tax across the continent and not position itself purely on tax rates.
The first day included a session on financing for growth, with Valerie Dabady Liverani, Manager of Resource Mobilisation and External Finance at the African Development Bank, warning that anyone investing has to take a long view and there are no ‘easy wins’. Harvesh Seegolam, CEO of the Financial Services Promotion Agency (FSPA), noted that the Mauritius IFC remained very bullish on Africa, which was opening up in a number of sectors, such as fast moving consumer goods, telecoms and financial services amongst others. Mr Seegolam highlighted an increasing trend of global investors using Mauritius to explore opportunities in the mainland continent. Raj Dussoye, Chief Executive of SBM Bank (Mauritius) Ltd saw that Africa was ‘still the goldmine’ but explained that banks do perceive projects as risky, and there was a huge mismatch when it comes to infrastructure funding as banks normally act short term and they were ‘made to act long term’. He added that new capital requirements reduce the available capital, and that there were further challenges related to management and corruption. On a more positive note, Michael M. Selassie, Country Director and Principal, CEO of Ascent Capital, commented that all indications point to the fact that Africa is the place to be for private equity companies, and noted that high collateral requirements imposed on commercial banks in Ethiopia posed a major challenge to the traditional market in lending.
The conference will continue on 21 September, with an address from Hon. Seetanah Lutchmeenaraidoo, Minister of Foreign Affairs, Regional Integration and Trade, and from HRH Princess Abze Djigma, Goodwill Ambassador for Energy, Ministry of Mines and Energy, Burkina Faso, and Founder of AbzeSolar