g20 africa infrastructure investment conference - EVENT PROGRAM
Infrastructure development is the bedrock of social prosperity, according to José Filomeno de Sousa dos Santos, Chairman, FSDEA.fund)
ROCKY ROAD TO
PROSPERITY T
he eyes of the world have been on Africa throughout the last decade, as more and more investors and businesses target their investment activities at countries in the region. In 2013 alone, numerous companies entered Africa to exploit what many commentators describe as an ‘oil bonanza’. Looking at a map of Africa is akin to looking at a who’s-who of oil companies. Gabon is playing host to Addax Petroleum, Total, and Perenco, a leading oil and gas exploration company. Angola and Nigeria are oil and gas economies. Angola, specifically, hosts several oil companies which include Sonangol, TOTAL E&P Angola, Chevron and Esso. These companies will soon be supported by the completion of Africa’s strongest crane, which will have a capacity to lift 2,500 metric tons. Angola’s oil accounts for 2.6 per cent of US imports and 12 per cent of China’s. These are boom-times for Africa, whose economies are projected to grow by 4.5 per cent in 2013 and accelerate to 5.3 per cent in 2014, according to a new report by the Organization for Economic Cooperation and Development (OECD). Between 2000 and 2010, Angola grew faster than any other country.Three African nations, Algeria, Angola and Libya appear in the Mundi Index top 20 biggest oil producing nations, ahead of Qatar and the United Kingdom. Multilateral debt relief to countries in Sub Saharan Africa provide much breathing space and puts them on a level pegging with other developing nations. These factors, tied in with Africa’s growing population, suggest that investors have everything to gain by investing in Africa.
Sustainable investment is required Striking growth figures and vast oil projections ignore a different kind of reality on the ground. More importantly they ignore a worrying fragility to the current economic progress. An unplanned expansion of population leads to greater hunger, poverty and inequality, according to the OECD report produced in conjunction with the African Development Bank. The report issues a stark warning that, “growth has been accompanied by insufficient poverty reduction, persisting unemployment, increased income inequalities and in some countries, deteriorating levels of health and education”. Reports such as these suggest that non-oil investment opportunities offer a far more sustainable future for Africa. The deficit of infrastructure in the region is an obstacle to achieving the diverse economy that Africa needs. Urgent action is required by investors and governments, and collaboration to develop key infrastructure needed to help Africa realize its potential. This urgency is exacerbated by the number of young people in the region. Demographics show that the average age in Africa is 18 years. Forty per cent of Africans are younger than 14. The fate of the region lies in the hands of this young population. The question is how can nations with developing democracies, war legacies and decades of political instability rise to the challenge of sustaining their current economic growth? The key to preserving Africa’s wealth for future generations is to build a diverse economy. Unlocking human potential now and in years to come means building an
16 | G20 Africa Infrastructure Investment Conference
Forty per cent of Africans are younger than 14 years. The fate of the region lies in the hands of these millions of very young people.
ecosystem that supports enterprise and promotes hard work. Before any of that can happen, however, basic infrastructure must be developed throughout the continent. Moody’s announced in May 2013 that Sub Saharan Africa needs at least US$90bn of spending on basic infrastructure development citing, ‘underinvestment in infrastructure, with energy, water system and sanitation networks requiring the most funding’. The lack of investment in infrastructure has a direct impact on the GDP performance of sub Saharan African countries. Moody’s estimates that per capita GDP growth drops by 1 per cent and annual productivity by 40 per cent for each year that the region misses the requisite infrastructure investment. Without infrastructure people cannot bathe, drink clean water, or drive to work. Without these most basic of services a nation will not be able to properly equip its people with the education and skills needed to compete on the world stage. Sanitation and access to healthcare facilities will save lives and improve the quality of life for millions. Public transport will usher in an era of mobility, opening up communities, linking towns to cities and giving millions of
