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

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Low interest rates here to stay for half a century, says OECD director Adrian Blundell-Wignall.
  • OECD speak on support it will offer to Greek
  • 3.4 bn people or 56% of the world's population live only just above the global poverty line, on US$2-10 a day. The global middle class is both smaller and poorer than thought. Read more about the results of this Pew Research Centre's new study on the Financial Times.
  • Resale of charity shop rejects has destroyed Kenya's local textile industry but a proposed ban on the importation of used garments risks putting thousands out of work. Read more about this economic dilemma on The Guardian.
  • Bill Gates visited the OECD on 26 June. He met with the Secretary-General Angel Gurría to discuss areas of collaboration with his foundation and participated at a briefing session on official development assistance modernisation with OECD experts.
  • "Countries that are home to high proportions of immigrants tend to have better integration outcomes”, according to the OECD Indicators of Immigrant Integration 2015, released on 2 July 2015. Read more on The Guardian.
  • The People’s Republic of China decided to enhance longstanding collaboration with the OECD and to join the OECD Development Centre, in a historic visit by Chinese Premier Li Keqiang on 1 July to the OECD in Paris.
  • In order to face global warming, Asia needs at least $40 billion per year, derived from both the public and private sector. Read how to bridge the climate financing gap on the Asian Bank of Development's website.
  • One dollar in aid for trade generates eight dollars in extra trade for all developing countries and 20 dollars for low-income countries. Read OECD Secretary General's post on the newly released Aid for Trade at a glance 2015.
  • Catherine Mann, OECD Chief Economist, explains on Bloomberg why "too much bank lending can slow economic growth".
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .
  • Come va la vita in Italia? How's life in Italy? The OECD Better Life Index is an interactive online platform in seven languages that goes beyond GDP by offering important insights into measuring well-being and quality of life. Try it for yourself!
  • What does it mean to live on less than US$2 a day? Xavier Godinot, Delegate for International Affairs of ATD 4th World and René Locqueneux, a member of this NGO, gave an insightful presentation on the topic based on their field experience, at the 2015 OECD Forum.
  • How to jump-start slack investment to drive global growth and jobs dominated discussions at the annual OECD Ministerial Council Meeting, chaired by the Netherlands, which ended 4 June.
  • The IMF calls for a decisive energy subsidy reform in order to use the freed resources to meet critical public spending needs and to reduce pollution ahead of the Paris climate change summit.
  • More than 35 million young people, aged 16-29, across OECD countries are neither employed nor in education or training according to the newly released OECD Skills Outlook.
  • Have a look at these posters representing a world without fundamental rights at work – including child labour, forced labour and inequality. Read more about this ILO image competition here.
  • Rising inequality threatens social cohesion and growth. Income inequality has reached historical highs in most OECD countries and is still rising.
  • Time to vote! As the dust settles after the UK general election, let’s remember that voting at the ballot box is not an innate right enjoyed by everyone. Indeed, although the number of democracies across the world has spiked from 48 in 1989 up to 95 today, billions of people are still living in non-democratic, authoritarian regimes.
  • How can we achieve a zero-carbon future? A new World Bank report provides a few insights.
  • Today alcohol causes more deaths worldwide than HIV/AIDS, violence and tuberculosis combined. In order to reduce damages to health, the OECD recommends that regular drinkers reduce their consumption by one unit a week, that is, a small glass of wine for example. In addition, increasing prices, regulating advertising, effectively treating drinking problems together with stricter police enforcement would greatly contribute to reducing damages done to individuals and society.
  • video alcohol
  • Africa vs profit shifting African countries heavily rely on the income generated by multinationals’ taxation, which can represent as much as 88% of a country’s tax base. Little wonder Africa is involved in the OECD’s initiative to address tax base erosion caused by profit shifting, known as BEPS. The need to strengthen inter-governmental co-operation to curb cross-border tax losses was reaffirmed at the Africa Tax Administration Forum (ATAF) in Sandton on 21 April 2015.
  • Africa v. profit shifting
  • Rana Plaza
  • Wal-Mart, Other Retailers Sued over Bangladesh Factory Collapse Two years after the April 24, 2013, Bangladeshi factory collapse in the capital of Dhaka, the victims' families filed a lawsuit in U.S. federal court in Washington against Wal-Mart Stores Inc and other U.S.-based companies that sourced out their products from the Rana factory. Read more on Telesur's website.
  • #OECD360: Your country in figures.
  • How to ensure transparency in public procurement? Read Cobus de Swardt's article on OECD Insights.
  • After three decades of extraordinary economic development, China is shifting to a slower and more sustainable growth path, according to the OECD's latest Economic Survey of China.
  • In pursuit of the American Dream
  • Tim Harcourt Video
  • G20 and Australia: Bestselling economist Tim Harcourt speaks to the BBC about how Australia has gone from "Down Under to Down Wonder".

Most Popular Articles

Poll

What issue are you most concerned about in 2015?

Euro crisis
Unemployment
Global warming
International conflict
Other

OECD Insights Blog

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

All rights reserved. OECD 2015