African investment

Africa's economies were on the rise when the financial crisis hit in 2008. Growth was running high on the back of commodity price increases, with African exports almost doubling between 2000 and 2006. Over the same period, foreign capital flows quintupled. Yet the crisis has jeopardised this progress, resulting in a severe investment slowdown, particularly in oil and mineral production, and halving Africa's growth rate from 5.7 % in 2008 to 2.4 % in 2009.

There are numerous new opportunities for private and international investors in Africa. For example, investment in Africa's energy sector, an essential engine of growth, falls short of US$40.8 billion a year. At the same time, demand is overwhelming: more than three-quarters of Africans lack access to electricity, presenting an impediment to both human and economic development for the continent.

How can African governments channel scarce resources into productive investment in the energy sector? An effective solution would be to increase private participation in power infrastructure. "In the global race for green growth, increasing investment in clean technologies is critical," says OECD Deputy Secretary-General Mario Amano. In new markets, such as renewable energy, gaps in investment financing could also be filled.

While Africa's future is inextricably linked to global markets, it is also dependent on home-grown regulatory reform. Critical bottlenecks in, or obstacles to, the development of African energy sectors include weak regulatory frameworks, expensive credit, underdeveloped capital markets and a lack of innovative risk-mitigation instruments. Keeping markets open to international investment is also vital, particularly given commitments made in G20, UN and OECD contexts.

As a lead reformer in Africa and a member of the G20, South Africa is an ideal host for the 4th NEPAD-OECD Ministerial Meeting on Mobilising Resources for Trade and Investment and Boosting Energy Investment and Carbon Finance in Africa. Key messages from the meeting, held in Johannesburg on 11-12 November, will be sent to the UN conference on climate change in Copenhagen in December. Says Ibrahim Assane Mayaki, CEO of the New Partnership for Africa's Development (NEPAD): "It is important to design Africa-owned national, regional and continental policies that provide a sound basis for emerging from the crisis."

The NEPAD-OECD Africa Investment Initiative's Ministerial Meeting and Expert Roundtable events gather key policymakers, the private sector, regional organisations, international partners and technical experts from African and OECD countries. They are hosted by South Africa's Department of Trade and Industry and are organised by NEPAD.

For more information see www.oecd.org/daf/investment/africa

©OECD Observer November 2009



Bookmark this


Economic Data

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter

Twitter feed

Editor's Choice

  • Economic Outlook_video
  • Economic Outlook: The global economy is expected to continue expanding at a moderate pace over the coming two years, but policymakers must ensure that instability in financial markets and underlying fragility in major economies are not allowed to derail growth.Click to watch the video.
  • OECD Forum 2014
    A public event that brings together all sectors of society to share policies and ideas to help shape responses to global challenges.
    Join us on 5-6 May.
  • "There is no shortcut to equipping people with the right skills and to providing them with opportunities to use their skills effectively."

    - Andreas Schleicher, Special Advisor on Education Policy to the Secretary-General, OECD Yearbook 2014

  • Data Lab Image
  • Interactive charts showing aid (ODA) provided by DAC members; by recipient countries and by sector. Click to compare your country.
  • OECD Insights Blog
    OECD Insights Blog by Brian Keeley:
    Results are out for the OECD’s PISA student assessments on “creative problem solving”.
  • Better Life Index
    How do you measure a Better Life?
    On 5 May, the OECD will be launching a new interactive infographic where visitors can explore the priorities of people worldwide. Be a part of it. Create and share your Better Life Index.

Most Popular Articles

Subscribe Now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the opinion of the OECD or its member countries.

All rights reserved. OECD 2014