attracting global investors to africa
DESCRIPTION
Professor Nicholas Biekpe President: Africagrowth Research& Professor of Development Finance & Econometrics University of Stellenbosch. Attracting Global Investors to Africa. Introduction. Economic growth & Poverty alleviation - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/1.jpg)
Professor Nicholas BiekpePresident: Africagrowth Research&Professor of Development Finance &
EconometricsUniversity of Stellenbosch
![Page 2: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/2.jpg)
Attracting Global Investors to Africa
![Page 3: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/3.jpg)
Introduction
Economic growth & Poverty alleviation– Direct link between economic growth, poverty
alleviation and resource mobilisation efforts;
– Links between human resource capacity and efficient resource mobilisation outcome;
Investment and development conundrum – Development requires resources;
– Resources require relevant skills-lacking in Africa
![Page 4: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/4.jpg)
Why Invest in Africa?
Under-utilised human and natural resources;Expanding consumer base; Improving governance structures in
governments and private sector; Improving economic and political security;A continent is hungry for development- can
only get better;
![Page 5: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/5.jpg)
Investor’s Checklist
Purchasing power of population; Level of Education; Level of Infrastructure Development; Level of flow of FDI into country; Skill of labour force; Degree of militancy of Unions; Geographical location; Consumption pattern;
![Page 6: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/6.jpg)
Figure 1:Trends in Private and Public Investment in Africa, 1985-2001 (% of GDP)
![Page 7: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/7.jpg)
Resource mobilisation: A brief
historical perspective Great depression and the need to mobilise
domestic resources; Positive intervention of states during the
depression; Europe and the US- Intervened to create
favourable conditions for resource mobilisation efforts;
Post-independent Africa- Intervened to create centralised political and economic administrations (this did not work!)
![Page 8: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/8.jpg)
NEPAD and Resource Mobilisation- what is new now?
Involves business for the first time;NEPAD has well defined objectives;Emphasises on partnership rather than
donor support;Puts governance at the top of its agenda; Stresses on self-reliance rather than
donor reliance.
![Page 9: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/9.jpg)
Some key objectives of NEPAD on the Resource Mobilisation Front
Facilitate business development in Africa; Promote transparency and good governance; Attract Investment (e.g. FDI and ODA); Reduce cost of doing business; Promote the spirit of entrepreneurship; Create environment for efficient taxes and
savings; Marketing Africa as an investment destination.
![Page 10: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/10.jpg)
Impact of development grants on economic development
Grants mostly create obstacles to development;
Grants tend to serve donor interest;Historical pattern of failure from donor
models;Grants create a cycle of perpetual
dependency ;
![Page 11: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/11.jpg)
Main resources channels: Inflow & Outflow
Figure 2: Resource Flow Channels
Inflow Channels Outflow Channels
Savings;FDI;TaxesODA;Debt Relief;Export Earnings;Capital markets and other financial instruments (e.g. venture capital, private equity, insurance etc.)Other private sector injections;
Capital flightImportsDebt servicesProfits paid to foreign investors/ shareholders
Source: ACIA & NEPAD (2004)
![Page 12: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/12.jpg)
Key obstacles that really prevent investment in Africa
Cost of starting a business Dealing with numerous licences; Cost of hiring and firing staff; Registering property; Getting credit; Investor protection; Paying taxes; Cost of trading across borders; Enforcing contracts Closing a business
![Page 13: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/13.jpg)
Dealing with numerous licences
![Page 14: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/14.jpg)
Difficulty in employing workers
![Page 15: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/15.jpg)
Ease of registering property
![Page 16: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/16.jpg)
Ease of getting credit
![Page 17: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/17.jpg)
Protecting Investors
![Page 18: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/18.jpg)
Paying taxes
![Page 19: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/19.jpg)
Trading across borders
![Page 20: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/20.jpg)
Enforcing contracts
![Page 21: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/21.jpg)
Closing business
![Page 22: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/22.jpg)
Conclusion
To attract global investors, Africa will need to:– Promote transparency and good governance;– Reduce cost of doing business; – Improve and speedup capital markets reforms;– Market Africa as an investment destination.
![Page 23: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/23.jpg)
continue
Encourage savings;Strengthen export capacity;Support venture capital initiative;Encourage small enterprise schemes;Help strengthen capacity to collect local
taxes;Develop schemes to attract sustained FDI
flow;
![Page 24: Attracting Global Investors to Africa](https://reader036.vdocument.in/reader036/viewer/2022070416/568150ba550346895dbed37e/html5/thumbnails/24.jpg)
THANK YOU