WASHINGTON, May 25, 2011 – Africa offers endless possibilities to investors, the World Bank said Wednesday.
“Investors going into Africa today are taking advantage of the continent’s endless possibilities,” World Bank Vice President for the Africa Region Obiageli Ezekwesili told investors and African ambassadors accredited to the United States in a speech delivered as part of celebrations marking Africa Day.
Observed each year on May 25, the day commemorates the founding in 1963 of the Organization of African Unity, the forerunner organization of the African Union.
Ms Ezekwesili noted that at a time of major global economic turmoil when even rich economies need bailouts, debt buy-backs and IMF funding to stay afloat, Africa is poised to rise as one of the world’s most important growth poles in a multi-polar world.
Africa has rebounded from the global financial and economic crisis, posting GDP growth of 4.5 percent last year. The continent’s GDP is expected to reach 5.1 percent and 5.8 percent in 2011 and 2012 respectively.
“For many, many years, we have been told that Africa has a bright future… that future is now. This is Africa’s time,” Ms. Ezekwesili said.
Capital flows to Sub-Saharan Africa rose from US$35.8 billion in 2009 to an estimated US$41.1 billion in 2010 and are expected to reach US$48.5 billion this year.
Ms. Ezekwesili applauded investors flocking to Africa, encouraging them to ignore the stereotypes in media reports and films that continue to paint the continent as a region of misery, disease and war.
“At the World Bank, we are bullish about Africa. We believe that the continent is perhaps at about the same point today as India 20 years ago and China 30 years ago… just before their economic boom set in,” Ms. Ezekwesili said.
Foreign direct investments to the continent have risen nearly nine-fold – from a mere US$10 billion in 2000 to US$88 billion in 2008 – dwarfing flows to India (US$42 billion in 2008) and approaching flows to China (US$108 billion). The African Union estimates that foreign direct investments to continent could reach US$150 billion by 2015.
Understanding that something new is, indeed, happening in Africa, the Wall Street Journal argued in a recent article that “Catching Africa’s Investment Bug is Proving Contagious.”
While Africa is, indeed, open for business, it is not open to “just any business”, Ms. Ezekwesili cautioned. She explained that the continent can only afford responsible investments. She described these as investments that are people-focused and pro-poor; promote Africa’s efforts to achieve the Millennium Development Goals; promote transparency, accountability and good governance; build innovative partnerships with and within the private sector, helping to create jobs, promote prosperity; foster local enterprises, grow opportunities for trade, create new or expand existing markets; bring about the emergence of an African middle class and build the skills Africans need to compete in today’s global and knowledge-based economy.
“Africa does not need the irresponsible investments that have for many decades unleashed corruption and degrading conditions upon those they claim to serve,” Ms. Ezekwesili said.
In particular, Ms. Ezekwesili pointed to agriculture as “Africa’s next big thing,” provided that governments across the continent continue implementing the right reforms, policy choices and institutions. Although agriculture is the source of livelihoods for 70 percent of Africans, the sector remains underfunded. Africa accounts for more than a quarter of the world’s arable land, and yet currently generates only 10 percent of global agricultural output.
“African governments, including those of you in diplomatic service, who can be Africa’s best salespersons, need to do their part,” Ms. Ezekwesili told the African ambassadors. She cited the need for African governments to honor the pledge they made in Maputo in 2002 to provide at least 12 percent of their national budgets to agriculture.
Recalling the direct involvement of thousands of Africans in the formulation of the World Bank’s new strategy for Africa, Ms. Ezekwesili pledged that her institution will stay on the side of the poor, helping to create the kind of new partnerships needed by Africans “to protect their rights and preserve their dignity and pride.”