Tuesday, April 5, 2011

Experts discuss Africa’s new opportunities

Leading businesspeople and thinkers are gathering tomorrow at a roundtable to discuss emerging opportunities and challenges in Africa’s quest for development.

Business Times magazine, a monthly business publication for Africa with in-depth coverage and analysis of pertinent economic and financial issues, is organising the event as part of activities marking its 20th-edition celebration.

The topic for the roundtable, which takes place at the Alisa Hotel, North Ridge, in Accra, is “Africa: New Opportunities, New Challenges”.

“Africa has been branded by many as a continent of limited hope and progress. However, the continent boasts enormous business opportunities that every investor can benefit from. It’s time to expose the real issues about Africa so that, together, we can build it for a better future,” said Mrs. Edith Dankwa, Executive Director of Business & Financial Times.

“We therefore see this roundtable as coming at an opportune time to talk about Africa and its future,” she added.

Key personalities expected to speak on the topic include Dr. Kofi Amoah, CEO, Progeny Ventures Inc.; Mr. Foluso Phillips of Phillips Consulting, Nigeria; Mr. Kyle Whytehill, CEO, Vodafone Ghana; Mr. Prince Kofi Amoabeng, CEO, UT Bank; and Mr. Jamil Ampomah, ACCA Director for sub-Saharan Africa.

They will be joined by an audience of over 100 individuals comprising Chief Executives, Board Chairmen, Country-Directors of international organisations, and Diplomats among others.

Africa has been aptly described as the next frontier for global development; and this is no fluke considering the region’s recent impressive economic growth, its growing natural-resource wealth and the enormous flow of investments into its economies. Africa’s people also represent a promising market for the world’s producers.

The International Monetary Fund (IMF) estimates sub-Saharan Africa’s 2010 GDP growth at 5%, observing that most countries in the region recovered very quickly from the world financial crisis and recession. The Fund projects real GDP growth of 5.5% for the region this year.

Again - according to IMF estimates and excluding countries with less than 10million population - six sub-Saharan African countries make it onto the list of the world’s ten fastest-growing economies over the ten years to 2010. Africa is also expected to grab seven of the top-ten spots over the next five years - among which is Ghana, which is set to grow in leaps and bounds on the back of oil production.

High commodity prices, an associated feature of Africa’s previous growth runs, have persisted into 2011 due to continued robust demand and a sluggish supply response to tightening market conditions. Both oil and metals have witnessed considerable price growth since the end of the recession, providing a bulwark to support the budgets of many African economies.

But high commodity prices have never been a permanent feature of world markets; so African economies must brace up for the not-too-good times that always linger around the corner. Africa needs to diversify its productive base to tap into higher-value markets that will generate greater incomes and returns.

The downside to this upward price trend is the impact on staples - typically grains -which are a significant part of household spending in Africa. Addressing this threat in a broader context requires better social and governance policies that protect the poor and mitigate the impact of the harsh realities of the global terrain on vulnerable populations.

Another area of both opportunity and challenge is business development and performance. At the recent Reuters Africa Investment Summit, bankers and executives noted doing business in Africa is “not for the faint-hearted and requires patience, good local staff and respect for the continent.”

Sub-Saharan Africa is ranked close to the bottom in the World Bank and International Finance Corporation’s 2011 list of the most business-friendly regions - though overall many African countries are among those actively taking steps to improve the climate for doing business.

Ghana, for instance, came out the best reformer in enhancing access to credit. The country implemented measures in six important areas: it created its first credit bureau, computerised the company registry and overhauled its property registration system, moving from a deed to a title registration system.

The cost of business capital remains high, though; particularly credit from financial institutions. While macro- and other structural economic challenges account partly for this state of affairs, others cite rent-seeking by lenders, who, it is said, continue to reap huge profits even as they groan about a risky credit environment.

Better spending and fiscal actions are also urgent in these times to make economies stable and sustainable, experts say. The public sector must see greater efficiency of output and delivery and be a credible partner to a promising, underexploited private-sector.

These are the issues that will engage the critical minds of discussants as the forum seeks to elicit the right kind of ideas and perspectives for the advancement of the continent.

SOURCE:B&FT

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