•  geneva
• Monday, March 21, 2011
• Inter Press Service

Local and foreign investment on the African continent is slowly moving away from agriculture and raw materials to manufacturing, services, communication and tourism, despite poor infrastructure and low skills levels.

'Africa is the last frontier of growth. In the past, investment opportunities were mainly in oil, diamonds and property. But today resources are diversifying, with 60 percent of growth coming from non-traditional sectors, such as retail, manufacturing, financial services, telecoms, real estate and tourism', stated Nozipho January-Bardill.

She is the group executive for corporate affairs at Mobile Telephone Networks (MTN), a South African company that has invested in 21 countries, both in Africa and in the Middle East.

While most economies have contracted during the recession, African gross domestic product (GDP) has been expanding, she told the fourth Swiss- African business exchange, a gathering of businesspeople from Switzerland and African states that ended Mar 17.

'Africa is in a take-off phase, with foreign direct investment (FDI) increasing from 15 billion dollars to 80 billion dollars in eight years. And the per capita GDP of the top performing economies - Algeria, Botswana, South Africa, Libya, Mauritius, Morocco and Tunisia - exceed that of BRIC (Brazil, Russia, India and China), the traditional emerging countries,' January-Bardill noted.

In 2008, the collective GDP of the continent was 1.6 trillion dollars - equal to Brazil’s or Russia. In 2020, it is expected to be 2.6 trillion dollars. African governments are playing a larger role in foreign investment. In the World Investment Report 2010, UNCTAD noticed that developing countries are increasingly pursuing a double strategy: attracting foreign investment while, at the same time, regulating it and directing it to sectors that are conducive to development.

Maggie Kogozi, the executive director of the Uganda Investment Authority, told IPS that, 'our aim is to attract investment, both foreign and local. Since we have an educated workforce, we want it to go into value-addition: manufacturing, services, information and communication technologies, the financial sector, education and health are picking up quite well. There are also tourism opportunities, with a big need for hotels and lodges.'

Uganda, like other countries, is also rich in petroleum and minerals. 'But the good news is that they are still in the ground, so now we can manage them better,' she said. 'We have a strong standards and environmental body and a solid revenue authority, so we are ready to exploit our resources.'

With six billion barrels to be exploited, Uganda is putting out bids for an oil refinery in the country. It has also huge deposits of gold and a gold refinery for processing the metal locally, thanks to Russian investment. 'And we would like that model for everything: adding value before we export,' Kogozi affirmed.

But there are problems too. Infrastructure remains the most obvious area to improve. Infrastructure bottlenecks, such as poor road networks, inefficient railway systems and expensive and unreliable electricity supply, are major hurdles.

© Inter Press Service (2011) — All Rights Reserved. Original source: Inter Press Service

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