EU-Africa policy to focus on wealth creation

EU-Africa policy to focus on wealth creation

Wednesday, 07 October, 2009

The Third EU-Africa Business Forum concluded its discussions in Nairobi, Kenya, (28-29 September 2009) with a consensus on the need for Africa to shift its policy objective from poverty reduction to the more dynamic goal of wealth creation. There was also broad agreement on the need for greater regional integration, increased investment and improved infrastructure.

Some 300 African and European business leaders, representing multinationals, large corporations, small and medium-sized enterprises and confederations, and multilateral and regional institutions, came together at the two-day forum, hosted by Mr Raila Odinga, Prime Minister of Kenya. They concluded their discussions with a number of recommendations, the full details of which will be made available on the EU-Africa Business Forum website.

Looking to the future

The Forum made a number of draft recommendations (due to be officially adopted in the coming days), including:

  • The need to deepen regional integration, in particular through the strengthening of institutional, technical and organisational capacities in the area of standards, metrology, testing and accreditation.
  • The need to pursue industrial modernisation, facilitate trade and reinforce work on the development of a quality infrastructure. Greater private sector involvement in this process was called for, particularly in the form of Public Private Partnerships (PPPs).
  • The need to improve the availability and accessibility of project financing across the region, whilst paying greater attention to predictability and quality. Greater involvement of SMEs was called for as a means of increasing local ownership of projects.
  • The identification of information and communication technologies (ICTs) as essential tools to improve the delivery of sustainable development and as a sector for increased investment in the future.
  • The development of de-centralised rural electrification, with more support from the raw materials industry in the production of energy.
  • More local involvement in the transformation of raw materials in Africa.

The EU has pledged some €5 billion in funding, 1.5 billion of which has been earmarked for the specific goal of promoting regional integration. Commenting on the Forum, Stefano Manservisi, the European Commission’s Director-General for Development noted that now, more than ever, good policy must be in place along with a sound enabling framework allowing the private sector access to credit, knowledge and skills.

Summing up the discussions, African Union (AU) Commission Deputy Chairperson, Erastus Mwencha, stressed the need to address the imbalance in EU-Africa trade, with Africa continuing to export mainly raw materials and import finished products. If Africa’s huge potential is to be unlocked, he said, the continent will need to pursue regional integration and promote greater investment in manufacturing and infrastructure. He also called on African countries to reduce bureaucracy which is hampering the creation of a climate conducive to business.

SMEs in the spotlight

There was a call, too, for greater focus to be placed on the role of small and medium-sized enterprises (SMEs) and entrepreneurship. During the Forum, the working group led by EUROCHAMBRES insisted that SMEs should be at the heart of the Joint EU-Africa Strategy and called for the development of an ‘African Charter for SMEs and Entrepreneurship’, implying specific national measures and regulatory reforms to improve business conditions. They also identified the need to strengthen the role of intermediary organisations in Africa in co-operation with their European counterparts. These two recommendations will be submitted, along with the above-mentioned recommendations, to the African Union Heads of State summit in January 2010.

Fair play for business

European Union companies were encouraged to increase investment in Africa to take advantage of the huge opportunities that currently exist on the continent. Erastus Mwencha stressed that the continent offers impressive returns on investment and immense potential, particularly in areas such as agro-pressing, industrial production, construction and the service sector. He also pointed to the paramount importance of infrastructure and energy which feature prominently on Africa's development agenda and where, he noted, huge opportunities exist for joint ventures.

Stefano Manservisi pointed to the high level of private investment from South America and the emerging economies and urged European companies to look at their experiences and learn from them. He added that this requires fair competition and that it is largely the task of regional and national authorities to create conditions for everybody to do business in a fair way.

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