SADC Correspondent | Oct 30, 2018 | 0
It is an intense struggle for every FDI dollar
In the same week that our Ministry of Trade, Industrialisation and SME Development hosted a hugely successful investor conference, nine other similar events are scheduled by African countries all eager to get their slice of the foreign investment pie. Most of these will take place before the middle of December.
At this very moment, these nine investment promotion events are offering a staggering 119 fundable projects ranging from US10 million to US1 billion. If one adds the 13 tangible project offered at our own investor conference, it brings the total number of available projects to 132, and that is only in nine countries in southern Africa.
On the positive side, this is an indication of the vast potential in southern Africa alone. I assume if one look at the continent, the investment opportunities must run to hundreds if not a thousand or more.
On the negative side, it shows that our attempts at securing a small fraction of the available investment capital, are fraught with adversity and the competition for FDI dollar is beyond extreme.
Still, the investors conference, in my mind, was a major success.
It is often disconcerting to come across so many people who have never heard of Namibia. And this is not only at grassroots level in the slums of the rest of the Third World, it is often with very sophisticated people working high up in the financial world.
If I go by the recent statements put out by the African Development Bank, the amount of capital needed to build Africa’s infrastructure, is mind-boggling. Something like US$50 trillion over the next twenty years. And that is just a very rough estimate.
The practical problem however, is that investors may look at the continent as a whole, and at all the opportunities it offers, but we do not.
All the SADC countries first look at their own needs and their own projects, before considering the links any such project may have across borders. Despite all the rhetoric to the contrary, the Southern African Development Community remains fragmented, isolated, and disjunct. Take for example our relations with out closest neighbours. Only two trunk roads connect us to South Africa, only one to Botswana, one to Zambia, and two to Angola. That is about the extent of our connectedness in our own backyards. The other crossings that exist are minor roads usually favoured only by tourists and smugglers.
The investor promoters would immediately point out the tremendous opportunities for building more trunk roads. That is true. Given the close relationship between us and Angola, five or six trunk road links would make more sense. But then the inconvenient question arises, who are going to drive on these roads?
I think the same applies to rail, air and maritime links. Take for instance the almost universal absence of intra-African airlinks. There are almost zero lateral links. All the airlinks connect to international hubs of which there are only a very few. So our existing air infrastructure exists to helps us leave the continent, not to go visit our neighbours.
The reality is that we live in a vast continent, the size of which I sometimes suspect we ourselves do not fully grasp. To criss-cross this continent with roads and railway lines, will indeed take an amount of money which very few people can get their minds around.
Furthermore, we are at the very beginning of our development curve, so it will take another fifty years, perhaps even longer, before we have an established, urbanised middle class which will be the backbone to carry the massive financing we require.
In the meantime, I do not think we are wasting our time with investors conferences, I only know that the sparks will not fly immediately.
The number of people from outside our borders that showed up at this week’s event is already an encouraging sign. It puts us on the spot and it shows, that at least in our immediate neighbourhood and among our established relationships, there is much goodwill.
It also forces us to be honest, and to tell all prospective investors exactly what our intentions are with sticky stuff like the Investment Promotion Act, that essentially deters free investment.
Perhaps the biggest blessing of the whole conference is that is revived the almost defunct Investment Centre.
There is a whole lot of momentum generated by the exchanges at the conference. The address by the Premier of Gauteng at Tuesday evening’s dinner, not only spoke of the many opportunities, but also very clearly on the need for us to think beyond our borders. Industrialisation is extremely expensive. But if we look are regional partnerships, together we shall be stronger.