‘Africa remains prime investment destination’
DESPITE the disruptive economic impact of the Covid-19 pandemic, Africa is still a prime investment destination.
Regional economic experts affirmed this position during a recent African Development Bank (AfDB) webinar for Asian audiences, which also noted that the policy recommendations of the African Economic Outlook (AEO) Supplement could be regarded as important opportunities for investments.
In an outcome statement shared with the media after the engagement, AfDB said participants endorsed the supplement report, which revises the growth projections and outlook for Africa for 2020 and 2021 and highlights the impact of Covid-19 on the continent’s socio-economic landscape. The report recommends policy responses to safely re-open economies and accelerate recovery and growth.
“Despite the Covid-19 pandemic, investment opportunities still abound in Africa,” said Tetsushi Sonobe, the Dean of the Asian Development Bank Institute (ADBI).
“Global markets are shifting to South Asia and Africa. In a sense, Africa is not very far for Asian investors who might be interested in the investment opportunities on the continent.”
Khaled Sherif, the AfDB’s vice president for regional development, integration and business delivery said despite the pandemic affecting all African economies, its magnitude will vary considerably from country to country, depending on the economic characteristics and initial conditions of the countries.
“This urges us to avoid the one-size-fits-all solution to address the effects of Covid-19 in Africa. For that, the AEO Supplement notes that the continent will need the support and expertise of all,” he said.
“This is an opportunity to enrich the debate on what appropriate measures are needed to support African countries to recover from the pandemic, drawing particularly from Asian experience.”
Sonobe observed that Africa’s Gross Domestic Product growth was projected to quickly rebound in 2021 following steady growth before Covid-19 and identified some of the potential opportunities highlighted in the outlook supplement.
“A large market with a very talented youthful population, a three-trillion-dollar market opportunity through the African Continental Free Trade Area (AfCFTA) agreements, greater manufacturing potential as low-cost manufacturing opportunities continue to move to Africa, improved business environment, and improving macroeconomic governance,” said Sonobe.
The webinar noted that the policy recommendations of the AEO Supplement could be regarded as important opportunities for investments. Participants also observed that although Africa is human-resource-rich, it will need to work on closing its infrastructure gap — an issue the African Development Bank has made one of its top priorities.
The AEO Supplement underlines the urgency to build the resilience of Africa’s healthcare systems and economies to improve countries’ preparedness for future shocks. This means that African countries will need to rethink their current development strategies and priorities, which have clearly shown their limitations.
“Policymakers must seize the new and real opportunities for participation in global value chains, particularly with Asia and within Africa and build the infrastructure needed to encourage large-scale teleworking, e-health, and distance learning architectures for a rapid, resilient, and sustainable recovery in a post-Covid-19 digital world,” said Chuku Chuku, officer in charge of the bank’s macro-economic policy, debt sustainability and forecasting division.
“The pandemic notwithstanding, Africa is open to business and we look forward to working with our Asian partners.”
Released annually since 2003, the African Economic Outlook provides compelling up-to-date evidence and analytics to inform and support African decision-makers.
Around 350 participants attended the virtual event, which was co-hosted by the Asia External Representation Office of the African Development Bank. The audience included government officials, representatives from the African diplomatic corps in Asia, development professionals, representatives of civil society, academics and think tanks.-chronicles
