Africa is a goldmine of opportunities. It is a continent replete with so many potentials that it would make the mind of the rhetoric sage shiver and quake to the cold tremors of wonder. Africa must realize the wealth of its resources-human and natural resources. Africa can transform itself. The continent indeed holds lots of investment opportunities to the world to push for its economies’ growth and development. Africa must eliminate the barriers preventing her from becoming the most significant investment hub that the world has ever seen.
“Africa is the fastest-growing economic region in the world. This is the right place to invest.” — Aliko Dangote.
According to the World Bank, Africa “has become the second most attractive investment destination in the world.” The continent is trailing behind North America. Investors are scavenging the countries of Africa for the next big thing beyond the established markets of South Africa, Nigeria, and Kenya. Changing the African narrative will attract foreign investments, which will help close the many gaps that the continent faces.
Africa has its strengths, weaknesses, opportunities, and threats. Africa must use its powers to eliminate its shortcomings. Africa must learn to leverage its opportunities to gain an advantage and grow. Africa must learn to eliminate its limiting threats before it becomes unsalvageable. Africa must learn to eliminate the many factors that act as drawbacks to becoming the world’s number one investment hub. These challenges are some of the key reasons why many investors reconsider the decision to come to Africa.
Thanks to the advent of technology and the World Wide Web, the world has become a global village. African leaders must break away from a myopic mentality and start thinking of making their nations attractive to outside investors. The era of self-serving thinking needs to become a thing of the past quickly. Citizens of all countries of Africa must become tired of voting corrupt leadership into positions of power. The quicker Africa transforms its thinking, the better, which is what this piece is here for, all things being equal.
10 Things Africa Must Do to Become A Global Investment Hub
Africa is locked and loaded to become the most incredible investment hub on the planet. Africa is a rocket ready to launch, ready to blast off into the meteoric heights of the business cosmos! If the fifty-four nations that make up Africa have a re-think and start priming the booster engines of Africa, the sky will not be the limit of Africa; the cosmos will be a steppingstone for its more incredible ascent! Here are some things the African continent requires to achieve even more progress to become the world’s most significant investment hub.
#1. Increased Collaborative Strategies
Countries in the African continent need to start working together more in various sectors such as Science and Technology, Education, Health, Security and Intelligence, Trade and Commerce, Tourism, Environment, Arts and Culture, etc. Collaboration among African nations is crucial if Africa is to become a global investment hub. There are only a few collaborative strategies for project development in Africa. Via collaboration, the countries that make up the African collective can start helping each other out, growing, and profiting equitably in the process. African nations must stop working in silos and support each other jointly. African governments must become collaborative sprockets to keep the continent’s engine running in the bulb of positive intelligible ideation. Satisfying this need for partnership between sectors as a continent will make the continent better equipped to deal with the rest of the world.
#2. Provide Fund for Infrastructural Development
There is a lack of funds for the development of infrastructure. A study establishes that there is an infrastructural gap in sub-Saharan Africa. There is a need for a yearly sum of $93 billion in infrastructural financing over the next decade in other to fill this gap.1 Shortage of funds means that governments cannot invest in new infrastructural projects and find it challenging to maintain existing ones. Africa needed to be way past this yesterday, and this variation should not be so in the community of nations that make up the continent of Africa.
African governments need to set their priorities straight—individually as independent nations and collectively as strategic and collaborative nations that make up the continent. There is a need for countries in Africa to concentrate on developing projects to solve the infrastructural gap problem while simultaneously providing employment opportunities to its teeming human capital. One possible way to address the infrastructural problem is Public-Private partnerships in various sectors on a scale of priority.
#3. Implementation of Good Policies
Continents become great on the foundations of sound policies enacted by its constituting countries by good leaders who want to work for the people under the auspices of righteous governance. Failure to act and implement reasonable policies under the watchful leadership lens of incorruptible control by member countries of a continent will lead to a lack of development and decadence of the continent as a whole. There should be public policies that will enable progress and systems to eliminate structural weakness and risk of marginalization.
#4. Need for Good Governance
Africa has great minds that can provide solutions to many of its problems. Unfortunately, Africa seldom feels the full effect of these policies because of the adverse impact of corrupt systems, governance, and leadership. That is the bane of Africa’s undoing, the Achille’s heel of her non-progress, growth, and slow development. The sooner the scales fall off the eyes of the different nation’s leaders and their populace, the better. The government, for the sake of proper accountability, should tackle corruption and inefficiency. The longer this gap remains, the longer the continent will remain under the dark shrouds of slow-dom.
There should be no careless use and misappropriation of government funds, and there should be a reform of the civil service across the continent to enhance efficiency. Transparency must become Africa’s mantra among all its nations. Until Africa becomes fed up with the plague of corruption, it will remain the impedance that will stall investors from entering the continent in their droves. If Africa does not embrace transparency, how can investors trust that their venture will be viable and yield any value? Becoming a global investment hub will be far-reaching so far as this variance remains at the forefront of affairs. Good governance is not an option; it is a must and the only option towards a continental shift towards change at a grand scale, ceteris paribus.
#5. Need for Skilled Labor Force
In many African countries, most persons in the work-age group are either unemployed or underemployed. This population, mainly consisting of youths, is significant. According to the United Nations statistics, about 226 million youths (15-24 years of age) lived in Africa in 2015, which must be up by now. However, that number is approximately 69% of the total U.S. Population, which sits at 328.2 Million. Because this makes up a large segment of Africa’s population, it is clear that this is a severe problem. There is the need to provide them with the necessary skills, support, and education by making it affordable and easily accessible. There is also the need to investigate vocational training targeting the corporate and private sectors.
#6. Conducive Investment Conditions
Africa needs to create an enabling environment that will make the funding of ventures conducive to outside investors. There needs to be the elimination of all trade barriers. Such barriers could be reduced transport, high energy costs, inadequate security, good access channels (e.g., roads, rail, air, waterways, etc.), poor waste management processes, inadequate governance policies, leadership corruption, inhumane treatment of the human capital, poor ethics and lawlessness, poor communication access, inadequate healthcare, etc. The list could go on ad infinitum. The push for a more flexible labor market and good competition policies will make Africa an attractive global investment hub. All these barriers need expunging because global supply chains require transparency, accountability, and reliability.
#7. Promote Growth Through Agribusiness
Africa needs to concentrate on boosting agricultural productivity within its constituting nations, especially within rural areas, to increase investment within the continent. Africa could quickly become the food basket of the world. This strategy will promote growth, expansion and will contribute to economic returns. Despite the sector being quite viable, it is still not at its good apex spot. African nations should support their rural farmers to improve their conditions and processes. They should also empower them to go into large-scale mechanized farming for greater efficiency and productivity.
#8. Ensure Economic Security and Reform Financial Sectors
Africa needs to ensure the proper framework to ensure economic security. They also need to reform the financial sectors to create the right enabling environment for Multi-National Entities (MNEs) to invest. Carrying out these actions across Africa will reduce uncertainty plaguing economic decision-making in some regions of the continent. When these happen, Africa must protect and secure the golden-egg-dividend of the reforms that ensue. Much needs to be done, especially in Africa, to strengthen its financial systems as most of them are not at optimum regarding their management. These must happen to boost the investment confidence of outside investors to the continent.
#9. Better Security Measures
Some African countries experience civil unrest, tribal and religious war, genocide, terrorism, abduction cases, and more. All of these are security issues, and more make these regions unsafe for investors. Potential investors are reluctant to consider those regions experiencing these security issues. Governments of these regions should ensure better security measures to address these issues. They must become aggressive to tackle these variations and eliminate them pronto. These nations can do so via robust security reforms, retrain and rebrand law enforcement, invest in their militaries, and adopt a zero-tolerance attitude towards domestic and internationally bred terrorism, to mention but a few. It will not be a small measure to curb these matters. However, as the ancient Chinese Proverb states, “A journey of a thousand miles begins with a single step.” Africa must start taking steps today.
#10. A Culture of Innovation
The most prosperous and developed countries are usually those that, through true innovation, have been able to provide value to the world. Disruptive innovation is one of the most significant catalysts to business growth. In the Oaekpost article titled, “10 Facts About the Role of Innovation in Business Growth,” you will see how businesses deploy this strategy to become very profitable. As these businesses profit, the economy of the nations where they are also improving. They provide other countries of the world with valuable goods and services that transform lives en masse.
Africa is the dumping ground of the developed nations where innovation is moving at full force. When companies innovate and create new products or services, they always test out their products in Africa. Africa is a dumping ground because the leaders that be and the populace alike allow it. Africa needs to break the cycle of being the dumping ground of the world. Africa needs to innovate and become self-sufficient, thereby reducing the need for imports. Doing this will make its economies more robust and more competitive globally.
Africa can become the investment magnet hub of the world. Before this can happen, Africa must play its part in the process of transforming itself. The listicle and piece are not exhaustive. However, suppose the constituting nations that make up the African continent start working on eliminating these barriers. In that case, it will be a step in the right direction of transforming Africa into a grand investment hub. An excellent first step for the wise constituting nations of Africa is to contemplate this piece on Oaekpost. A perfect next step is to consult with its writer for broader recommendations and bring it to the discussion table in all Government Houses across Africa and start implementing its recommendations and more one after the other.
“Africa is open for business. The days of aid are over. We are now on a highway to boosting Africa’s prosperity, through greater trade and investments ‘without borders’ among nations.” — Akinwumi Adesina.
Africa has a role to play for it to become a global investment hub. As we have seen, first, there must increase collaborative strategies among African nations. Second, a plan to fund infrastructural development across Africa must take center stage fast. Third, embracing a rational policy implementation strategy is requisite. Fourth, the assumption of top-notch governance is pivotal. Fifth, a well-trained workforce is fundamental. Sixth, investment conditions must be conducive. Seventh, growth can happen via a focus on Agribusiness. Eighth, economic security and financial reforms are a must. Ninth, stealth, steady, and sure security measure should be seamless across Africa. Tenth, Africa must embrace innovation. For Africa to become, the onus lies on her citizenry to achieve the strategies mentioned above and more.
- Gutman, J., Sy, A., & Chattopadhyay, S. (2015). Financing African infrastructure: Can the world deliver. Retrieved from https://www.brookings.edu/wp-content/uploads/2016/07/AGIFinancingAfricanInfrastructure_FinalWebv2.pdf