Investment Climate: The Journey so Far. Investment Climate Facility for Africa (ICF) and the African Development Bank. June 02, 2015.
On 28th May 2015, ICF and the African Development Bank held a joint event to promote investment climate reforms in Africa. The event, titled “Investment Climate: The Journey so Far”, was held as part of the African Development Bank’s Annual Meetings which took place in Abidjan, Ivory Coast, from 25th to 29th May 2015.
The event explored the progress that has been made so far in improving the investment climate in Africa and called for countries to make greater changes and to do it faster.
Conversation with Leaders
The event provided an opportunity for participants to hear from Benjamin Mkapa, former President of Tanzania and ICF Co-Chair, and also from Daniel Kablan Duncan, Prime Minister of Ivory Coast.
Prime Minister Duncan explored the benefits that Ivory Coast has received from improving its business environment and giving the private sector an opportunity to contribute to economic growth. This includes a bridge that was constructed through private sector funding, and the provision of electricity by the private sector. “We think the private sector should be the driver of change,” the Prime Minister said, adding that government does not always have the funding to provide the infrastructure that the country needs.
The Prime Minister also pointed out the need for governments to improve their performance in order to reduce bureaucracy and work with the private sector in a more efficient manner. “We need to retrain people to improve the effectiveness of our administration. Time is money and we need to move faster,” he said. He called for the use of information and communication technologies to improve government efficiency because, as he put it, “they provide a shortcut to development”.
President Mkapa highlighted the fact that many countries are afraid of integration, and have the wrong belief that integration will reduce their independence. “Integration actually enables you to develop and therefore to enjoy your independence in larger freedom,” he pointed out. He urged African governments to focus less on politics and more on the economy so that they can see the benefits that economic integration offers.
He also called for governments to not only give the private sector a chance, but to also pay attention to the feedback they provide as they are best placed to say whether economic policies are working or not. “Make a deliberate effort to listen to the private sector,” he urged.
Engagement with Public Sector, Development Partners and Captains of Industry
A panel consisting of Public Sector officials, Development Partners and Captains of industry explored the progress that African countries have made in creating a conducive environment for business and the gaps that still exist.
The panelists included Baroness Lynda Chalker, former UK Minister of Overseas Development, current ICF Trustee and Chairperson of Africa Matters; Ebenezer Essoka, Standard Chartered Bank’s Vice Chair of Africa; Naglaa Al-Ahwany, Egypt’s Minister of International Cooperation; Jean-Louis Ekra, Afrexim Bank CEO; Thomas Duve, KfW’s Director of Regional Funds; Mahamadou Sylla, IPS CEO; and Abdourahmane Cisse, Ivory Coast’s Minister of Budget.
From the discussions, it was evident that many African counties have, in the past decade or so, made efforts to improve the investment climate in an effort to boost their economies. These reform efforts are bearing fruit and businesses are benefiting.
However, a lot more needs to be done to enable businesses in Africa to operate in a fair and transparent environment. One of the areas that was highlighted by the private sector as needing urgent improvement in many countries is the legal system and especially mechanisms for resolving commercial disputes. Another area was the need to build the capacities of small and medium enterprises to enable them to succeed. “Many Africans come up with great ideas, but these ideas need to be turned into bankable business plans,” said Jean-Louis Ekra, CEO of Afrexim Bank.
Mahamadou Sylla, CEO of IPS, pointed out that improving the investment climate is one thing. Equally important is the need for governments to improve their day to day interactions with the private sector so that businesses are treated in a fairer manner.
Abdourahmane Cisse, Ivory Coast’s Minister of Budget, explained that governments are paying closer attention to the private sector and are hearing their call for government to improve the business environment. He gave an example of Ivory Coast where the Government has made efforts to reduce bureaucracy. “We have heard the private sector and we are making improvements in how we work with them,” he said.
Benjamin Mkapa, ICF Co-Chair and former President of Tanzania, called upon African countries to increase the pace and scope of investment climate reforms so that Africa can achieve the economic progress it urgently needs.
And to help countries achieve this, ICF and AfDB are increasing their collaboration through joint investment climate projects, analytical work, and promotion of the investment climate in Africa.
About 300 participants attended the event.