On 25 May 1963, the foundation of the Organization of African Unity (OAU) which is the landmark accomplishment and turning point in Africa’s history, was laid in a spirit of solidarity and unity to pave the way for a more prosperous Africa. In this context, to commemorate the 60th Anniversary of the foundation of the Organization of the African Unity & subsequently the 21st Anniversary of its successor, the Africa Union, the Economic Development Board is pleased to celebrate the Africa Day with the issuance of this dedicated newsletter highlighting the economic prospects of the continent.
In this post Covid era, referred to as an era of Polycrisis, reflecting the combined effects of the pandemic coupled with galloping inflation levels globally, the war between Russia & Ukraine, and more recently the increasing vulnerability of long standing and trusted financial institutions, many investors are seeing Africa as the new investment frontier.
The continent has undergone fundamental changes over the last decade and investors are showing an increasing appetite which is driven by the fact that Africa is home to 17% of the world’s population, currently standing at 1.4 billion. This is coupled with the fact that Africa is the fastest growing demography globally, with over 60% of the current population under the age of 25 and expected to grow to around 2.4 billion by 2050. Africa is further blessed with over 30% of the global mineral reserves and according to the Food & Agriculture Organization (FAO) of the United Nations, around 60% of the world’s untapped arable land is also in Africa.
This in turn, has fueled the demand for infrastructural services including energy, transportation, air & maritime connectivity, and urban infrastructure. According to IMF, the continent has an annual infrastructural development gap estimated between USD 150 to USD 200 billion, which is a major constraint to optimizing FDI flows in Africa and to deliver the increasing demand resulting from the growing demographic and the ambition of moving up the value chain.
On the other hand, global investors and financial institutions are looking for higher returns on investment in new projects and territories and this is where Africa can play a significant role given that four out of the top 10 fastest growing economies are projected to be from Sub Saharan Africa, with the Democratic Republic of Congo expected to grow at 8.6% and Cote d’Ivoire at 7.6% respectively, according to the IMF.
It is, therefore, the opportune time for Africa, to build on its inherent competencies, improve on its governance and ease of doing business to attract investors, skills and technologies and ensure sustained economic growth over the next decades and beyond.
Moreover, the African Continental Free Trade Area (AfCFTA) is expected to herald a new dawn for African States and will be a crucial driver for economic growth, industrialization, and a sustainable development in Africa. The continent should build on the excellent deployment of the AfCFTA by the African Union (AU), to promote intra-regional trade, invest massively in infrastructure to meet the need for proper connectivity, communication, and free movement of people.
Only then, the black tea of Kenya, along with the Ethiopian coffee, the cocoa of Côte d’Ivoire, the copper from the DRC and the diamonds from Botswana will be able to be transformed within our shores, enabling more value addition within the continent and thus propelling the continent towards economic prosperity.
Subsequently, the Mauritius International Financial Centre (MIFC), has to date successfully structured investment to the tune of USD 82 billion to Africa, generating USD 6 billion of fiscal income annually to several African states. Moreover, the Mauritius IFC could play an instrumental role to close the finance gap of the continent and complement Africa’s economic rise by fervently pledging its competencies in structuring funds, talent and know-how onto the continent.
While opportunities across the African continent are increasingly being tapped into by global investors, access to timely and up-to date information and analysis on Africa remains a challenge in many circles. In this respect, EDB will be relaunching the Africa Centre of Excellence, aimed at promoting peer-to-peer learning across the continent with the ambition to making the continent more investor friendly and more attractive to global investors.
Last, but not least, the Economic Development Board will host its flagship Africa Partnership Conference on 2nd & 3rd October 2023, bringing together representatives of several African Investment Promotion Agencies, private sector promoters and investors from across the globe, policy makers and Government officials with a view to create a renewed dynamism amongst African countries. This conference will further showcase the successful expansion of Mauritian-based enterprises that have exported their expertise across several African states in a panoply of sectors such as the cane industry, textile, financial services, hospitality, ICT, amongst others.
On this note, I wish you all a Happy Africa Day 2023.
Long live Africa! Long live the Republic of Mauritius!
Ken Poonoosamy
CEO
