Conference report-comesa-ria-2011-50

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Conference report-comesa-ria-2011-50

  1. 1. Conference Report 23 – 24 March 2011 Dubai, UAE
  2. 2. Under the patronage of H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
  3. 3. 4 4th COMESA Investment Forum ContentsContents Preface 5 Executive Summary 6 Programme 11 Session Summaries Official Opening Remarks 16 Keynote Address 17 Plenary Session: COMESA – Dubai: The New Business Opportunity 18 Parallel Session: Trade – Dubai - Africa: Strengthening Trade Links 21 Parallel Session: Finance – New Models for Financial Growth 23 Parallel Session: Logistics – Identifying Opportunities in Logistics 27 Parallel Session: Agriculture/Agribusiness – Tapping into the Market: What are the Opportunities? 29 Parallel Session: Infrastructure – The Infrastructure Gap 32 Parallel Session: Finance – Private Equity 35 Bloomberg TV Debate 37 Plenary Session: Investing in COMESA: Reality versus Perception 39 Investor Success Story 42 Parallel Session: Trade – Increasing Intra-African Trade 44 Parallel Session: Logistics – Ports: Engine for Trade in the COMESA Region 46 Parallel Session: Infrastructure – The Importance of Connectivity for doing Business 49 Parallel Session: Finance – Strengthening COMESA’s Capital Markets 52 Dubai TV Debate 54 Parallel Session: Logistics – Rail: Key Drivers for Investment 57 Parallel Session: Agriculture – Moving up the Value Chain: Value-Added Processing 60 Parallel Session: Infrastructure – Energy: Powering COMESA 62 Plenary Session: Becoming Tomorrow’s Fast-Growing Emerging Market 64 Closing Remarks 67 About the Organisers 68
  4. 4. 5 4th COMESA Investment Forum PrefacePreface F ollowing the recent financial crisis and funda- mental shifts in global economic power, the Common Market for Eastern and Southern Africa (COMESA) finds itself in a stronger position as an attractive destination for investment, with its growing and diversifying economies. Investors are increasingly interested in the possibilities the region has to offer. This became evident on the 23–24 March 2011 when more than 1,500 participants from over 80 differ- ent countries flocked to Dubai to be part of the 4th COMESA Investment Forum. Also in attendance were 14 senior ministers and leading personalities representing some of the largest businesses in Africa and the world. In line with the theme of the 2011 Forum, “Unlocking the Markets of the Future”, the event uncovered investment opportunities in the new emerging markets that make up COMESA, the largest economic bloc on the African conti- nent. Participants gained a better understanding of what it means to do business within the COMESA Member States and forged new partnerships with policy makers and business leaders alike. Seasoned investors shared their success stories, emphasising that the returns on investment in the region are considerably greater than in more mature markets and even other emerging markets. Policy makers pointed to the great strides that have been made in terms of improving the investment climate, and implementing a regulatory and legal framework that is conducive to doing business. The Forum focused on five sectors: agriculture/agribusiness, trade, logistics, finance and infrastructure. The following pages provide an overview of the discussions and detailed summaries of the sessions that took place dur- ing the two-day Forum, examining the main issues impact- ing on the key sectors. Initiated by the COMESA Regional Investment Agency (RIA), the 2011 edition of the COMESA Investment Forum was organised in collaboration with Du- bai Chamber of Commerce & Industry, under the patronage of His Highness Sheikh Mohammed bin Rashid Al Mak- toum – Vice President and Prime Minister of the UAE and Ruler of Dubai. COMESA’s Member States include: Burundi, Comoros, DR Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
  5. 5. 6 4th COMESA Investment Forum COMESA – the Business Destination COMESA is Africa’s largest economic community, comprising 19 Member Countries stretching from the north to the south of the continent. Plentiful natural resources, a constantly growing population, an emerging middle class in need of new products, an increasingly aspirational youth and growing stability make it a vibrant economic community. The ideologies of the countries in COMESA are aligned: every state wants to move into capitalist market economies. This has helped the economic development of the region, which has seen a sharp increase in cross-border and foreign investments in the last decade, particularly from ‘newcomers’ such as Brazil, China and India. With a collective GDP of more than USD 70 billion, COMESA provides many opportunities for investment in various fields, particularly logistics, tourism, energy, infrastructure and mining. Investments in COMESA countries are not restricted to resources: value addition is equally on the rise. The region has become especially interesting for investors because of its high rate of return, which has stood at a staggering 29% since the 1990s, as opposed to the EU’s 10%. Until the financial crash in 2008, COMESA states’ GDP increased by 7% a year, as a result of stable macroeconomic environments, and liberalised capital accounts and markets. What is crucial is the unity of COMESA – only by strengthening the economic bloc can the region emerge as a strong entity. COMESA is also dedicated to cooperating with other regional economic communities, such as SADC and the EAC, in order to put Africa more prominently onto the global market. The Reality of Doing Business Investors see COMESA as a growing region where many reforms and developments are currently under way. Noteworthy is the commitment of both governments and policy makers, which are keen to engage with business leaders and support investors. Many reforms have been put in place, creating an environment that is conducive to doing business. Each COMESA state has an investment authority, as does the COMESA region as a whole. This ensures that all requisite licences are easily acquired in COMESA countries and all processes go smoothly. However, reforms still need to be unified and harmonised more effectively, particularly in terms of rules, policies, legislative powers, the labour environment, education and the movement of capital. Branding is of vital importance, particularly as Africa is often perceived as one big country. At the same time, every country in Africa is a case study on its own. There has been much general stereotyping due to ignorance, which has negatively impacted on investment prospects. The negative image of Africa in the media is still blocking investment. This needs to be changed in order to open doors and fuel investments. While there is increasing awareness around the world of what is happening in Sub-Saharan Africa, not enough information is available. Opportunities for business in the region need to be publicised, with information about them more widely distributed. For this purpose, investment authorities have been established in each COMESA country. However, investors who come into Africa ‘trip up’, not on the macro, but on the micro level, such as corruption. By partnering with local business people who know the markets, this can be avoided. Reliable local partners are key for international investors – they can assist with all matters related to the day-to-day issues of investing in the region. The biggest problem facing the growth of investment in Africa is talent. Finding good employees and managers can be difficult. However, this has been changing recently, because the financial crisis has led to many trained Africans returning home. The COMESA – Dubai Business Partnership The 4th COMESA Investment Forum was a further step in strengthening the partnership between COMESA and the UAE. Speakers from both the UAE and COMESA highlighted the importance of intensive collaboration between the two regions. Through this, they insisted, win-win situations will be created which will be beneficial for communities and businesses alike. Their geographical location and proximity make both regions Executive Summary H.E. Sindiso Ngwenya, Secretary General, COMESA (right) shaking hands with H.E. Hamad Buamim, Director General, Dubai Chamber of Commerce & Industry
  6. 6. 7 4th COMESA Investment Forum natural strategic partners. Today’s trade relations between the UAE and the COMESA countries reflect a historic relationship, which commenced when the lands making up the modern UAE connected Africa to the Silk Road. The past trading relationships between the Gulf region and Africa have now evolved to include more sectors of the economy. Dubai’s success story is widely recognised and admired: it has exploited its geographic position and progressed with creativity and innovation. Hence COMESA, in many ways boasting similar preconditions to Dubai, should learn from the Dubai experience, particularly in terms of its effectiveness and speed, in order to improve its national and international competitiveness. But Dubai can serve as more than just a model for the region. Through its facilities (such as technology, infrastructure, free zones, zero trade barriers, and global market access), Dubai can also serve as a gateway which links Africa, and specifically COMESA, to the world. Dubai is a re-export centre for goods coming both in and out of Africa, thus making it an ideal entry point into the continent. At the same time, Dubai can take advantage of COMESA’s growing consumer markets, natural resources and vast tracts of land to ensure its food and water security. The boundless resources the COMESA countries have to offer (such as minerals, foodstuffs, etc) will continue to foster trade between the two regions and encourage dialogue on development and business facilitation. COMESA and Dubai must focus on business partnerships rather than governmental partnerships. This has already happened, and is evident through the various projects the UAE is involved in on the continent, such as the Port of Djibouti, or through the telecoms giant Etisalat. More business partnerships are arising. To continue this relationship between the two regions and to facilitate the exchange of information, it was decided that a COMESA Regional Investment Agency representative office will be established in Dubai. Trade A central topic was trade. The main issues discussed were how trade can be increased, not only within the COMESA region but also within Africa, and how the region can be positioned more prominently onto the global trade platform. Much has already happened to increase trade. The nineteen countries have agreed to harmonise laws and implement duty free agreements. The recently launched COMESA Customs Union will be operational in the next few months. At the same time, institutions such as the COMESA Clearing House and the African Trade Insurance Agency have been set up to help businesses mitigate risks. Various financial institutions also support businesses with trade finance tools. The region’s biggest weakness is infrastructure, which needs to be improved if COMESA is to compete more effectively. Intra-African Trade Although a large part of Africa’s population works in small and medium enterprises, the main issue is exporting to neighbouring countries, not to Europe. COMESA is already seeing substantial cross-border trade and investment, especially in the manufacturing and services sector, but this can only be increased through diversification of the economy. Infrastructure development is key to promoting intra- African trade: railways and road networks need to be developed rapidly, as well as storage facilities to allow farmers to store perishable goods before distribution. There are plans to set up a commodity exchange in COMESA, which will involve commodity-holding warehouses – this concept will make it easier for farmers to trade their produce. The Trade Relationship with the GCC Although there is considerable trade between COMESA and the Gulf, most exports from the COMESA region to the Gulf are low-value goods, while imports into the region from the Gulf are value-added goods, oil or oil products. COMESA makes up 52% of the UAE’s total trade with Africa. Trade has increased tenfold in a decade, and the volume of trade between the UAE and COMESA countries amounts now to USD 6.2 billion. A big component of trade from COMESA coming into the GCC is from Egypt. While COMESA is a commercial bloc, it is still important to look at trade and investments going to, and coming from, individual countries. Finance Opportunities in Finance The African financial sector offers many opportunities and has seen tremendous growth in the last 15 years. This is due to a rising bankable population; infrastructure development; regional organisations that are helping to increase efficiency and mobility; a general movement towards democratisation; the transformation of Africa’s main sectors; and a sustained 5% growth rate. The demand in Africa for financial services and products is growing and promises to be profitable. On top of this, the political developments in the Middle East and North Africa will open up many opportunities for the region’s economies and particularly the financial sectors. This is already visible in Tunisia, where many micro-finance institutions have emerged in the weeks following the revolution. Despite SMEs forming the backbone of the economy, it is still particularly difficult to find funding from large banking and financial institutions. Private capital is also hard to come by. This sector can be banked, but there is a need to develop
  7. 7. 8 4th COMESA Investment Forum special programmes – lending needs to be more inclusive of the bottom of the business pyramid. Technology is one of the biggest drivers of equity: mobile banking is making banking much easier, particularly within the SME sector. In light of this, technology promises to be the biggest driver of inclusion. Islamic banking offers an alternative opportunity for the financial sector in COMESA, as most commodities and the infrastructure are suitable. However, unless there are huge demands for Islamic banking, there are structural concerns that will hinder its development. While there are still many gaps in COMESA’s financial sector that will need to be addressed, it has been transformed rapidly in the last couple of years – a transformation that has taken the developed world over 200 years. Private Equity Private equity has changed, and continues to change, the business landscape in Africa. The number of PE companies has multiplied considerably in the last six years. This is due to fundamental improvements in the markets including liberalisation, reforms, macroeconomic management and positive progress in terms of the general geo-political environment. The most powerful driver is the increasing regionalisation of the African markets, which presents attractive economies of scale to investors. Capital Markets Interest in Africa is strong, and access to capital markets is in place. But there is a lack of products and the elements required for active capital markets – these being a stronger regulatory framework, better physical infrastructure (without which a market’s appeal disappears) and more favourable terms (repatriation of funds, foreign exchange controls, foreign participation and ownership of local companies). Governments can play a key role. They can initiate the process of connecting with international markets, develop a better understanding of African risk and opportunities, and help benchmark yields and risk, thus reducing the burden on companies or institutions coming to the market. This initiation is critical and can provide a model to emulate. Government willingness and engagement is primary. Following on from this, investment banks need to work together with lawyers, regulators and rating agencies to develop the products and frameworks. Investment banks will also have to work hard to develop funds and market them to international investors. Logistics Logistics is an essential element of trade. Despite trade having increased considerably, making Africa a commercial hub, there are still many logistical and infrastructural shortcomings, which make the transport of goods difficult. Warehouses, airports, rail, roads, airports and ports need to be improved, as well as the connectivity between them. In order to become commercially more competitive, Africa needs to upgrade its logistics capacity. Another factor is human resources – talent needs to be trained effectively in order to cater to human resources demands. While there are many logistics training institutes emerging in Africa, experience is still lacking and learning tends to be based more on a form of trial and error. Timing is another aspect of the challenge, as it can take a very long time to move goods from one country to another. Public-private partnership (PPP) projects can be very beneficial, as they bring experience and business opportunities to the private and public sectors. In many ways, Dubai can serve as an example in logistics development. Logistics have formed the base for facilitating the trade and growth of the city, and its logistics infrastructure has been the bedrock of its success. Ports Ports are crucial for the movement of goods from one country to another. What has become evident is that the more conveniently situated the port, the more impact it has on the country and the economy. While improvements have been taking place, such as the use of more international container depots and the new IT systems that have helped to decongest African ports, there are still challenges. The volume of trade is expected to grow exponentially in Africa: traffic is expected to quadruple by 2020. Ports need to be ready to deal with this increased volume, so more investment should go into the development of terminals. Existing port infrastructure needs to be improved and new ports need to be created. While some ports are equipped to meet international standards, the roads and railways have not caught up with this improvement. Capacity limitations also need to be addressed. To this end, PPPs are beneficial as they bring in expertise and funding, an example being the Port of Djibouti. Through a PPP, DP World collaborated with the government of Djibouti and local organisations to develop the port. The company brought capital, and the government made people and land available. The joint venture has been successful and has given a good financial return for all involved, thus creating a win-win situation for the investor and the country. For investments to work, there needs to be an environment in which the investor can make returns. Clarity of government policies and port development are equally important, because investors need a basic framework to work within. ExecutiveSummary
  8. 8. 9 4th COMESA Investment Forum Piracy is a major problem facing the port sector: it needs to be tackled speedily and on an international level. Rail According to the World Bank, railway deficiencies are holding back the continent’s financial growth by at least 1%. While more rail linkages need to be built, it is also of crucial importance to improve those that already exist. The cooperation between COMESA and other regional economic communities must leverage on their strengths and ensure the transfer of technology and knowledge building. While there are still many shortcomings, some rail networks are currently better than they have been in many years. Amongst them are the Tanzania Zambia Railways and the Kenya railway. Having gone through many years of non-investment and decline, they are now beginning to pick up. However, the challenge is that private sector investment into rail is difficult to mobilise, particularly for improving infrastructure that already exists. PPPs are the way forward for financing railways but contracts need to be better structured, with all parties involved feeling equally responsible and committed. Agriculture There is no business sector more important than agriculture. It accounts for one third of GDP, 80% of employment and 65% of foreign exchange earnings in the COMESA region. The potential for investment in agriculture is huge, particularly in land, as this has long been neglected. Africa has 25% of the word’s arable land, but less than 5% of that land is actually being used. Food shortages are found in some areas of Africa while surpluses are found in other areas. There is still a long way to go before these inequalities can be balanced and Africa can feed not only itself but also the world. Subsistence agriculture is still the mainstay for many farmers: however, access to markets and technology needs to be improved for smallholders to become a part of the agribusiness value chain. This would help producers become active stakeholders, which would encourage businesses to listen to them. At the same time, farmers themselves need to start thinking like businesses, rather than as individuals. Whilst small- scale farmers are seen by some as being an opportunity for investment, they are also seen as a hindrance, because land is fragmented. All agree that smallholders need to be dealt with through some form of collective – be this by merging land into large-scale farms or by working through associations. Smallholders need to take advantage of opportunities: to do this, it is most effective if they collaborate and work in cooperatives. Once farmers organise themselves into these structures, they can share knowledge and expertise; look at their productivity issues together; and examine how input procurement takes place (seeds, etc.) and how to reduce costs. Businesses need to see smallholders as an opportunity, as they are here to stay. At the same time, smallholders need to develop their expertise, learn better farming methods, form collectives and ensure the empowerment of women in farming. Opportunities in agriculture and agribusiness are manifold, but it is crucial that infrastructure and logistical challenges are overcome. Infrastructure Opportunities in Infrastructure Investment in infrastructure is one of the most important issues of economic growth in Africa. The amount of investment needed to improve infrastructure is USD 94 billion, of which USD 45 billion is still outstanding. PPPs offer many opportunities, but there are still challenges and regulations that impede proper implementation of projects. Investment from the private sector into infrastructure has been low in the past, particularly since multilateral and government- owned financing has given countries an excuse not to work with private companies. However, new opportunities are putting local companies on a steep learning curve. Companies operating in the region have begun to develop infrastructure as part of their investment strategy, such as providing power supply and building railways to mining sites. This has also helped to link different countries and regions. In order to make an impact on the region, companies must engage with the government, as well as with local companies who have the expertise.
  9. 9. 10 4th COMESA Investment Forum Energy Power is the source of all production. Africa has a lot of power resources and yet on average only 10% of its population has access to energy. Dependence on a single energy source needs to be reduced and electricity must be produced in sufficient quantity to make it available to the masses. Considering the impact of climate change on Africa – a subject that is becoming more and more important – renewable energy has to be the way forward. Development organisations in particular are interested in investing in that sector. The African Development Bank has a specific climate fund, which is financing big clean-energy projects in the Sahara region, with the aim of exporting solar power to Europe. There are also concessional funds for small clean renewable-energy projects. However, particularly for small-scale projects, it is difficult to motivate the private sector to invest. Projects need to be made commercially viable in order to attract investors. The Inga Dam project, being developed in the DRC, has the potential to power the region and also promises to provide good returns to investors. Inga will be able to produce 44,000 megawatts of power to meet the needs of the African continent, and then export the surplus. Development of Inga is due to be completed by 2015. Whilst the project already has funding of USD 2.4 billion, another USD 4 billion is needed. There are still opportunities for investors to come in on this particular project, as well as on many other power-generation projects in COMESA. ICT Technology has the potential to be the most effective enabler of Africa’s population and businesses. The fibre-optic cable which has brought the internet to the continent has increased connectivity and business velocity. Initially, it was laid to connect African businesses and individuals to Europe: now, its focus is connecting rural areas and integrating them into the economy. Regional connectivity is crucial because of the opportunities it offers: it can stem rural-urban migration, create employment across the country and allow for much more innovation. Overall, ICT enables development and economic growth. Evidence for this is the link between business development and telecoms: a 10% rise in telephone penetration raises GDP by 1%. This relationship is set to accelerate in the coming years. The reasons for this are the expansion of broadband internet (which is seeing many operators moving into the market) and the arrival of a low-cost smartphone for Africa. This phone promises to change how business is being conducted by offering many applications, and the same computing power and capacity as a laptop. At present, while 80% of the population has access to the telephone, only 20% have access to the internet: this smartphone will give everyone internet access. Innovative applications catering to specific demands can help Africa leapfrog many of the developments taking place in the First World. An example of this is an application that might allow owners of SMEs to run their businesses through their smartphone. Adopting foreign technologies is just as important as developing local technologies, so that African businesses do not ‘reinvent the wheel’. However, at the same time, the African business community needs to take advantage of local talent, and actively tap into the potential of the entrepreneurial youth in the region. ICT has also empowered governments. Business development in Africa has been slow because governments have not been able to collect taxes from the informal sector, which forms the biggest part of the economy. Now, through mobiles, the government can tax the informal sector, thus benefiting the economy. Becoming Tomorrow’s Fast-Growing Emerging Market The BRIC countries and other emerging markets can, in many ways, serve as examples for COMESA. What has made many emerging economies successful is a combination of several factors: prudent and easy-to-follow policies, which have had the potential to unlock the private sector; policy makers that have learnt from experience and allowed room for constant improvement; and a well-educated, capable and disciplined workforce, which has formed the backbone of a well-functioning economy. While it is important to understand that “politics is not business and business is not politics”, the quality of government and the honesty of people at the top of the government are equally crucial. Executive Summary H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai (right) and other dignitaries attending the 4th COMESA Investment Forum
  10. 10. 11 4th COMESA Investment Forum 09.00 – 10.30 Official Opening Remarks H.E. Abdulrahman Saif Al Ghurair, Chairman, Dubai Chamber of Commerce & Industry, UAE Heba Salama, Director, COMESA Regional Investment Agency, Egypt H.E. Sultan Al Mansoori, Minister of Economy, UAE H.E. Sindiso Ngwenya, Secretary General, COMESA Keynote Address: Hon. Jabulile Mashwama, Minister of Commerce, Industry and Trade, Swaziland and Chairperson, COMESA Council of Ministers 11.00 – 12.10 Plenary Session I COMESA–Dubai; The New Business Opportunity How can COMESA and its new partners collaborate effectively to encourage economic growth in the regions and enhance their positions within the global market? How to create win-win partnerships? How to map suitable opportunities? Moderator: Tom Ashby, Business Editor, The National Speakers: H.E. Sheikha Lubna bint Khalid Al Qassimi, Minister, Ministry of Foreign Trade, UAE Hon. Chirau Ali Mwakwere, Minister for Trade, Kenya Ahmad Bin Ali, Group Senior Vice President Corporate Communications, Etisalat Group, UAE Peter Kiguta, Director General (Customs and Trade), East African Community Charles Mbire, Chairman, MTN Uganda 12.30 – 13.45 Parallel Session I: Trade Dubai–Africa: Strengthening Trade Links Why is Dubai an attractive hub for doing business and trading with COMESA? How can African and international businesses take advantage of Dubai [when operating in and out of Africa]? Mechanisms & tools available to facilitate trade Moderator: Pat Lancaster, Editor, The Middle East Speakers: H.E. Hisham Al Shirawi, Chairman, Economic Zones World Alex Gitari, Director of Finance, PTA Bank Oti Ikomi, Senior Vice-President, Ecobank Transnational Inc Chris Kirubi, Chairman, Haco Industries Ltd Mahmood Sharif Mahmood, Foreign Trade Policy Director, Ministry of Foreign Trade, UAE 12.30 – 13.45 Parallel Session II: Finance New Models for Financial Growth Assessing the opportunities in banking and finance across Africa How can the financial sector fuel Africa’s economic growth? Islamic finance: a new opportunity for growth Financing SMEs: Challenges & Opportunities Moderator: Andreas Proksch, Director General (Africa Department), GIZ Speakers: Usman Ahmed, MD, Corporate Banking, Barclays Africa Kevin Flannery, General Manager, International Emirates NBD Dr. James Mwangi, CEO, Equity Bank Skander Oueslati, Senior Partner, AfricInvest Capital Partners Abdulla Qassem, Chairman, Network International UAE 12.30 – 13.45 Parallel Session III: Logistics Identifying Opportunities in Logistics Logistics in Africa: An Overview Projects: Opportunities ready to be harnessed The private sector as an engine for efficiency and modernisation Addressing connectivity Public-Private Partnerships Moderator: Anver Versi, Editor, African Business Speakers: Khaled Ahmed, Senior Vice President Strategy & Development, Economic Zones World, UAE Amadou Diallo, CEO, Africa & South Asia Pacific, DHL Global Forwarding, Africa Hussein Hachem, CEO, Middle East and Africa, Aramex Deanne De Vries, Vice President, Africa Agility Sanjeev S. Gadhia, CEO, Astral Aviation Ltd 15.15 – 16.30 Parallel Session I: Agriculture/Agribusiness Tapping into the Market: What are the Opportunities? Understanding the agriculture and agribusiness landscape in Africa Programme Day One – Wednesday 23 March 2011
  11. 11. 12 4th COMESA Investment Forum Discovering the smallholder as a producer and consumer Creating win-win situations Moderator: Edward Paice, Director, Africa Research Institute Speakers: H.E. Prof. Elias Nyamlell Wkoson, Minister of Foreign Trade, Sudan Dr. Evans Kidero, CEO, Mumias Sugar, Kenya Wanjohi Ndagu, Partner, Pearl Capital Partners Dr. Shachi Sharma, Head of Strategy and Planning, Africa & the Middle East, Syngenta Giulia Di Tommaso, Director of External Affairs for Africa, Middle East and Turkey, Unilever 15.15 – 16.30 Parallel Session II: Infrastructure The Infrastructure Gap Opportunities for the private sector to fill the infrastructure gap PPPs – creating a win-win solution Financing solutions for infrastructure projects Infrastructure – lessons learnt Moderator: Chalimba Phiri, Chairman, COMESA Regional Investment Agency Speakers: Lazarus A. Angbazo, President & CEO, GE East, Central & West Africa Marco Coutinho, Energy Coordinator, Vale, Brazil Farid Mohammed, Director, Pipal Mark Pearson, Director, TradeMark Southern Africa Programme 15.15 – 16.30 Parallel Session III: Finance Private Equity How Private Equity is changing the African business landscape: investment trends in COMESA Private and public capital as substitutes or complementary sources of funding Identifying the opportunities in fundraising How can COMESA attract more funds? Moderator: Zemedeneh Negatu, Managing Partner, Ethiopia and Head Transaction Advisory Services (TAS), Eastern Africa, Ernst & Young Speakers: Ziyad Bundhun, MD, MCB Capital Partners Paul Kavuma, CEO, Catalyst Principal Partners Marie-Hélène Loison, Head of Private Equity, PROPARCO Skander Oueslati, Senior Partner, AfricInvest Capital Partners 16.40 – 17.40 Bloomberg TV Debate Positioning COMESA onto the global trade platform Assessing COMESA’s current role in global trade Benefiting from Free Trade Agreements Produce local, trade regional, sell global – how it can be done Moderator: Lara Setrakian, Bloomberg Presenter Speakers: H.E. Sindiso Ngwenya, Secretary General, COMESA H.E. Hamad Buamim, Director General, Dubai Chamber of Commerce & Industry , UAE Hon. Jabulile Mashwama, Minister of Commerce, Industry and Trade, Swaziland and Chairperson, COMESA Council of Ministers Alykhan Lalani, Chairman and MD, Intouch Capital, UAE Karim Sadek, MD, Citadel Capital, Egypt Day One – continued Programme
  12. 12. 13 4th COMESA Investment Forum Programme Day Two – Thursday 24 March 2011 09.30 – 10.45 Plenary Session II: Investing in COMESA: Reality versus Perception What governments are doing to facilitate business: regulatory policy and institutional reform in COMESA What investors want from governments? Available instruments and securities: fund repatriation and arbitration Moderator: Zemedeneh Negatu, Managing Partner, Ethiopia and Head Transaction Advisory Services (TAS), Eastern Africa, Ernst & Young Speakers: Hon. Aston P. Kajara, Minister of State for Investment, Uganda Olaf Meier, MD, African Development Corporation Shakir Merali, Partner – East Africa, Aureos Capital Vimal Shah, CEO, Bidco, Kenya Ashish Thakkar, CEO, Mara Group 10.45 – 11.15 Investor Success Story Hear first-hand about the experiences of an influential investor who has done business in the region. Speaker: Arnold Meyer, MD (Africa Real Estate), Renaissance Capital 11.45 – 13.00 Parallel Session I: Trade Increasing Intra-African Trade How to boost trade within Africa Benefiting from RECs and intra-regional partnerships Available tools and mechanisms Diversifying African economies to fuel intra-African trade Moderator: Prof. Dr. Maggie Kigozi, Executive Director, Uganda Investment Authority Speakers: Hon. Welshman Ncube, Minister of Industry and Commerce, Zimbabwe Kofi Adomakoh, Director, Project & Export Development Finance, Afreximbank Mahmood Mansoor, Chief Technical Advisor, COMESA Clearing House Dr. Kombo J. Moyana, Executive Secretary, COMESA Clearing House George O. Otieno, CEO, African Trade Insurance Agency 11.45 – 13.00 Parallel Session II: Logistics Ports – Engine for Trade in the COMESA Region Commercialising COMESA Ports Facilitating profitable alliances with key stakeholder Africa’s PPP growth and the investment opportunities Optimising port performance Moderator: Anver Versi, Editor, African Business Speakers: Hon. Amos Kimunya, Minister for Transport, Kenya Hon. Peter Sinon, Minister of Investment, Natural Resources & Industry, Seychelles Jerome Ntibarekerwa, Secretary General, Port Management Association of Eastern and Southern Africa (PMAESA) John Woollacott, Senior Vice President, Business Development, DP World 11.45 – 13.00 Parallel Session III: Infrastructure The Importance of Connectivity for doing Business: Increasing Competitiveness through ICT How is ICT changing the business landscape in Africa? Where and what are the opportunities and challenges for ICT in COMESA? Fuelling Africa’s wireless revolution Creating a regional fibre-optic network Moderator: Ken Kwaku, Founder, The Kwaku Group Speakers: Brian Herlihy, CEO, SEACOM Noel Herrity, Founder & CEO, One Tree Services Charles Mbire, Chairman, MTN Uganda Nicholas Nesbitt, Founder & CEO, Kencall 11.45 – 13.00 Parallel Session IV: Finance Strengthening COMESA’s Capital Markets How can capital markets cater to the region’s financial needs? How to tap into capital markets: local, regional and international opportunities What needs to be done to fuel Africa’s capital markets? Moderator: Christopher Hartland-Peel, Head of Africa Research, Exotix
  13. 13. 14 4th COMESA Investment Forum Programme Day Two – continued Speakers: Abdulla Mohammed Al Awar, CEO, DIFC Authority UAE Atiq S. Anjarwalla, Partner, Africa Legal Network Arnold Meyer, MD (Africa Real Estate), Renaissance Capital Karim Schoeib, Head of Capital Markets, SHUAA Capital 14.15 – 15.15 Dubai TV Debate: A Roadmap of Opportunities: Fostering Cooperation between the UAE and COMESA Moderator: Zeina Soufan, Presenter, Dubai TV Speakers: Sulaiman Hamed Al Mazroui, Chairman, Bankers Business Group Fahad Al Gergawi, CEO, Foreign Investment Office, Dept of Dubai Economic Development, UAE H.E. Hisham Al Shirawi, 2nd Vice Chairman, Dubai Chamber of Commerce & Industry, UAE Dr. Nasser H. Saidi, Chief Economist & Head of External Relations, DIFC (DIFC) Authority Karim Sadek, MD, Citadel Capital 15.15 – 16.30 Parallel Session I: Logistics Rail – Key Drivers for Investment Partnering with African rail operators – what to look for? PPPs – creating mutually beneficial relationships Financing concessions Key drivers for railway investment and profitable operations Moderator: James Martin, Rail Director, Mott MacDonald Group Speakers: Hon. Malusi Gigaba, Minister of Public Enterprises, South Africa AbdulMohsin Ibrahim Younes, CEO – Strategic Corporate Governance Sector, RTA, UAE Akashambatwa Mbikusita-Lewanika, MD, Tanzania Zambia Railways Authority (TAZARA) Nduva Muli, MD, Kenya Railways Corporation (KRC), Kenya Karim Sadek, MD, Citadel Capital, Egypt 15.15 – 16.30 Parallel Session II: Agriculture Moving up the Value Chain: Value-Added Processing Opportunities in Agriculture: From producer to manufacturer Integrating small-scale farmers into the agribusiness value-chain Improving access to markets Smallholder-friendly financial services Moderator: Anver Versi, Editor, African Business Speakers: Santosh Vasudevan, Principal Investment Officer, IFC, South Africa Joshua Varela, General Manager, National Smallholder Farmers’ Association of Malawi Sai Ramakrishna, CEO, Karuturi, India Kunal Chahl, MD, Diar Capital, UAE 15.15 – 16.30 Parallel Session III: Infrastructure Energy: Powering COMESA Solutions to increase capacity, efficiency and quantity How to expand access to electricity in urban, periurban and rural areas? Harnessing Africa’s renewable energy potential: how can COMESA become a major player in the sector? Opportunities in environmentally sustainable energy projects Moderator: Ken Kwaku, Founder, The Kwaku Group Speakers: Hon. Raymond Tshibanda N’Tungamulongo, Minister of International and Regional Cooperation of DR Congo Richard A. Claudet, Chief Investment Officer, Private Sector Infrastructure, African Development Bank Dirk Hoke, CEO, Cluster Africa, Siemens Farid Mohammed, Director, Pipal 16.50 – 17.50 Plenary Session III Becoming Tomorrow’s Fast-Growing Emerging Market What are the lessons learned from the BRIC countries and what can be replicated in the COMESA region? How to drive growth in the COMESA region to unlock the markets and develop the region into a major economic power? How to learn from international and African success stories and create an inherently African growth strategy?
  14. 14. 15 4th COMESA Investment Forum Moderator: Ken Kwaku, Founder, The Kwaku Group Speakers: Ranveer S. Chauhan, MD (Africa Region & Palm Division), Olam Stephen Karangizi, Assistant Secretary General, COMESA Charles Mbire, Chairman, MTN, Uganda Klaus Overbeck, Senior Vice President New Business, DEG 18.10 – 18.20 Vote of Thanks Speaker: Hon. Eunice Kazembe, Minister of Trade and Industry, Malawi and Vice Chairperson of the COMESA Council of Ministers 18.20–18.30 Concluding Remarks & Closing Ceremony Speakers: H.E. Hamad Buamim, Director General, Dubai Chamber of Commerce & Industry, UAE H.E. Sindiso Ngwenya, Secretary General, COMESA
  15. 15. 16 4th COMESA Investment Forum Session Summaries Speakers: H.E. Abdulrahman Saif Al Ghurair, Chairman, Dubai Chamber of Commerce & Industry, UAE Heba Salama, Director, COMESA Regional Investment Agency H. E. Sultan Al Mansoori, Minister of Economy, UAE H. E. Sindiso Ngwenya, Secretary General, COMESA  T he opening session, which was attended by His Royal Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, set the tone for two interactive and fruitful days of discussions. The speakers from both the UAE and COMESA highlighted the importance of intense collaboration between the two regions. Through this, they insisted, win-win situations will be created which will be beneficial for communities and businesses alike. H.E. Abdulrahman Saif Al Ghurair, Chairman, Dubai Chamber of Commerce & Industry, UAE, officially opened the forum by looking back on the historic relationships between the Gulf region and Africa, stating that today’s trade relations between the UAE and the COMESA countries are reflective of that past historic relationship, but had evolved to include more sectors of the economy. The UAE’s strategic geopolitical location had allowed it to “become an active and economic partner of COMESA” and it was this strategic location that provided the UAE with competitive advantages of trade. Al Ghurair was confident that the boundless resources the COMESA countries had to offer (such as minerals, food, etc) will continue to foster trade between the two regions and encourage dialogue on development and business facilitation. Heba Salama, Director of the COMESA Regional Investment Agency (RIA), highlighted the successes and advances of projects in the COMESA region. Business and investments in the COMESA countries had increased fivefold in the last ten years, and this fourth annual conference should encourage businesses to take advantage of the many available opportunities. No doubt there were still challenges that COMESA must overcome, but Salama was hopeful that “by implementing mechanisms to promote a smooth business environment”, the resources of COMESA countries will become a key attraction to investors. She emphasised that investments in COMESA countries are not restricted to resources only, as the mining and manufacturing sectors are equally on the rise. COMESA also boasts some of the best tourist destinations today. The region has been improving its infrastructure, particularly along strategic routes (such as the commercial path leading from the Gulf down through Djibouti). Healthcare and ICT are other key sectors where improvements are taking place. A point Salama emphasised was the high rate of return on investments, which has stood at a staggering 29% since the 1990s, as opposed to the EU’s 10%. This reflected the potential that conducive investment climates can unlock and the opportunities capital markets in the region can take advantage of. She emphasised that a combination of a sound investment climate and strong capital markets is the engine for economic growth. Until the financial crash in 2008, COMESA states’ GDP increase was 7% per year due to the stable macroeconomic environments and liberalised capital accounts and markets. COMESA states are also signatories of the WTO and other prominent organisations. The large pool of human resources and competitive business transactions offers great potential for foreign investors. COMESA is comprised of 19 countries and is Africa’s largest economic community, making it particularly attractive for large-scale investments. H.E. Sultan Al Mansoori, the UAE’s Minister of Economy, also referred to the historical trade relationship between the Gulf and Africa, but with a focus on modern- day investments. Al Mansoori saw this conference as a strategic event to strengthen the trade relationship between Africa and the Gulf, and COMESA was one of the biggest groups the UAE has the opportunity and privilege to work with. COMESA’s collective GDP amounts to more than USD 70 billion and therefore provides many opportunities for investments in various fields. Future projections predicted that the number of consumers would increase to 500 million people in 2015. In this eventuality, Al Mansoori believed investors in COMESA to be the ultimate beneficiaries. He stressed that the UAE economy is ready to invest and merge with different economies. The banks in the UAE were “full of money”, the country had a solid infrastructure, and the laws and regulations worked together to empower the economy. He saw the UAE as a “gate” between the Gulf and Europe, and over the last few years the UAE had begun to focus more closely on Africa, because it was becoming pivotal to economic growth. The volume of trade between the UAE and COMESA countries amounted to USD 6.2 billion and a Official Opening Remarks Day One Thursday 23 March 2011
  16. 16. 17 4th COMESA Investment Forum larger flow of investments is expected in light of development projects, such as in ICT and communication. Dubai, according to Al Mansoori, was the main market for Africa and was central for trade. Similarly, Africais a promising partner for Dubai, and the government of the UAE in general was supportive of relations between the Gulf region and the COMESA states. This is evident through the various projects the region was involved in on the continent, such as the Port of Djibouti. More opportunities could become possible for both Dubai and COMESA. Al Mansoori concluded that empowering the investment climate was the role of decision makers and it was their responsibility to support business opportunities. H.E. Sindiso Ngwenya, Secretary General of COMESA, pointed out that Dubai had a congenial environment for growth and investment. The social and economic progress of the city was “the world’s envy”. Dubai is truly exploiting its geographic position and it had shown the world that a city or country can progress with creativeness and innovation. It was a good example of how a country can achieve prosperity without simply profiting from its natural resources. Dubai had diversified into finance, trade and many other areas apart from oil and gas. COMESA now had to take advantage of the opportunity to interact with counterparts in the UAE. COMESA needed to learn from its speed and effectiveness in order to improve its national and international competitiveness. Ngwenya concluded by encouraging business leaders to invest into the region’s infrastructure: USD 94 billion of investment is needed to improve the infrastructure in the COMESA region. He then urged those who had an interest in investing in the region to come and partner with COMESA, as the region had plenty of opportunities in Logistics, Tourism, Energy, Renewables, Infrastructure and Mining, to name but a few. Keynote Address Speaker: Hon. Jabulile Mashwama, Minister of Commerce, Industry and Trade, Swaziland and Chairperson, COMESA Council of Ministers  H on. Jabulile Mashwama, Minister of Commerce, Industry and Trade, Swaziland and Chairperson, COMESA Council of Ministers, assured business leaders that governments were keen to engage and support investors: “COMESA is a forum, where we commit as governments to assure the business community that we will do everything required to help them partner with us.” COMESA had seen a leap in foreign and cross-border investments. Notably, more than 30% of investments from India and China had been in the manufacturing and services sectors. “In recent years many Western banks also opened their branches in the COMESA region,” she said. Cross- border investment into financial and retail services had also increased. COMESA was dedicated to cooperating with other regional economic communities such as SADC and the EAC, in order to put Africa more prominently onto the global market. The combined GDP of the three regional economic communities was expected to exceed USD 1 trillion by 2013. As to the trade relationship between COMESA and the GCC, Mashwama lamented that while there was considerable trade between the two regions, most exports from the COMESA region were commodities while the imports into the region from the UAE were value-added goods. She concluded by saying that she had a firm conviction that individually and collectively, unlocking COMESA markets will be done in the decades to come. It marked the relationship between the private sector and policy makers to promote economic growth. Right to left: H.E. Abdulrahman Saif Al Ghurair, Dubai Chamber of Commerce & Industry, UAE; Hon. Jabulile Mashwama, Minister of Commerce, Industry and Trade, Swaziland and Chairperson, COMESA Council of Ministers; H.E. Sultan Al Mansoori, Minister of Economy, UAE; H.E. Sindiso Ngwenya, Secretary General, COMESA; Heba Salama, Director, COMESA Regional Investment Agency Hon. Jabulile Mashwama, Minister of Commerce, Industry and Trade, Swaziland and Chairperson, COMESA Council of Ministers, delivering her keynote address
  17. 17. 18 4th COMESA Investment Forum Moderator: Tom Ashby, Business Editor, The National Speakers: H.E. Sheikha Lubna bint Khalid Al Qassimi, Minister of Foreign Trade, UAE Hon. Chirau Ali Mwakwere, Minister for Trade, Kenya Ahmed Bin Ali, Group Senior Vice President Corporate Communications, Etisalat Group, UAE Peter Kiguta, Director General (Customs and Trade), East African Community Charles Mbire, Chairman, MTN Uganda  T he aim of this session was to discuss how COMESA and its new partners can collaborate effectively to encourage economic growth. Moderator Tom Ashby, Business Editor, The National, opened the session by asking H.E. Sheikha Lubna bint Khalid Al Qassimi, Minister of Foreign Trade of the UAE, what Dubai was doing to increase trade with COMESA. Sheikha Lubna described the UAE’s long history of trade with Africa. Beginning in pre-colonial times, she explained how the lands making up the modern UAE connected Africa to the Silk Road. Moving into modern times, she described COMESA as a very strong economic bloc making up 52% of the UAE’s total trade with Africa. The region has heavy bilateral trade with the UAE. Trade has increased tenfold in a decade, and it reached USD 5.7 billion in 2009. Looking at the last ten months, that performance went up 6.3%. “What makes this particular tie important are Dubai’s characteristics as a hub, an area of connectivity and networking, and COMESA’s increasing liberalisation and support of the business community.” Dubai has always been a business centre, with most of its trade historically taking place between East Africa and India. What has changed today is the mode of operation: “We now have a hi-tech fleet, Jebel Ali and other great distribution centres, and great infrastructure. Dubai is an ideal re-export centre for goods coming both in and out of Africa.” Next, Ashby wanted to hear from East Africa. He asked Hon. Chirau Ali Mwakwere, Minister for Trade, Kenya, what COMESA was doing to increase trade specifically through Dubai. Mwakwere began by saying that COMESA put in place many regulations that made it easy to do trade with other countries and smooth the flow of goods and services. At the moment, COMESA has not created incentives specifically for Dubai – but Dubai has many advantages in dealing with COMESA. “Dubai has a window into Africa that is open to the world. It is up to Dubai to take advantage of that open window,” Mwakwere declared. With the COMESA region’s population of 450 million people, entering the region would give Dubai many opportunities. In COMESA, Dubai will find a population waiting for goods and services from the rest of the world. Additionally, the COMESA region has much uncultivated land – something which Dubai should take advantage of. Mwakwere then discussed the issue of labour. Looking at COMESA in general, Dubai has access to skilled, affordable labour. It is not cheap labour, he stressed, but skilled and affordable labour that can give value addition on the spot. Dubai could work with COMESA to serve the world with value-added materials that are produced from the raw materials found in Africa. Ashby then moved on to asking specifically how opportunities can be found in COMESA. With Etisalat serving 35 million people in the region, he addressed Ahmed Bin Ali, Group Senior Vice President Corporate Communications, Etisalat Group, UAE, to share his experience of doing business and driving profits in COMESA. “We started our operations in Tanzania in 1999. From that moment on, we noticed that there is huge potential in the region,” began Bin Ali. The low penetration of mobile networks in Africa had created countless opportunities for operators to come in and invest further. Etisalat focuses on Egypt and Sudan, both part of COMESA. Its investments there are worth USD 2.9 billion with a growth of 32%. Etisalat has 35 billion customers in Africa and employs 6,000 people full time, as well as an additional 200,000 on a part-time basis. The company has 135 million customers around the world, and 50% of its outlets are located in Africa. Etisalat, said Bin Ali, started the first video calls service in Egypt. The company laid down over 3,000 fibre-optic cables to connect COMESA countries. It also invested in submarine cables and a cable project connecting Kenya to other African countries. The company is constantly increasing its shares in the continent. “Telecom is a long-term investment. Operators have to provide customers with the various services they need. Most of our contracts are usually 15 years or more,” Bin Ali ended. Ashby wanted to hear from Peter Kiguta, Director COMESA–DUBAI The New Business Opportunity Plenary session
  18. 18. 19 4th COMESA Investment Forum “International investors need to partner with local businesses so they can inform them about the local terrain” General (Customs and Trade) of the East African Community (EAC), on what his region has been doing to increase fruitful international cooperation and partnerships. Kiguta stated that the East African Community promoted both regional trade and broader trade with the international community, for example, to eliminate tariff barriers between states. The EAC came together with South Africa to create business partnerships. This had increased trade in infrastructure development. As an increasingly attractive region for investment, the EAC is not only dealing with the markets of COMESA, SADC and the greater East Africa region, but with a variety of international markets as well. The most recent example was the EAC’s signing of a trade investment agreement with the United States. Charles Mbire, Chairman, MTN Uganda, explained how local companies can help international investors coming into Africa. International investors need to partner with local businesses so they can inform them about the local terrain. They can also help investors understand that business plans are not based on the income curve but the expenditure curve in Africa. Local businesses can help with local networking, uncover local potential, decipher the culture and reduce the layers that block international companies from doing business in Africa. Next, Mbire spoke about the partnership with Dubai: “We look for partners who don’t take us for granted and use our cultural and traditional handicaps to their advantage. We look for partners who want a one-on-one partnership and want to help us. Dubai is great because its mission is not just profiteering, and we feel very welcome. Dubai is great because it lets our own companies learn from international business practices because they are so close to us.” Returning to Sheikha Lubna, Ashby asked how to further strengthen the links between the UAE and COMESA. The Sheikha stated that the UAE had made many investments into the continent. In terms of telecoms, for example, companies here know that if they have a highly competitive company that can expand abroad, COMESA provides a great advantage in terms of audience and opportunity. Additionally, there are great resources in Africa and COMESA – particularly in terms of mining. This is a viable business proposition coming from Africa. The UAE is a great place to do this sort of business with because it offers top-of-the-line logistics and networking opportunities. The platform available in Dubai and the UAE is a strong incentive to bring African businesses to this region. Many companies have established areas of interest for themselves in the free zones. There are 36 free zones in Dubai, with many benefits, including 100% repatriation of income, zero trade barriers, and market access to Asia. African businesses can even explore regional opportunities through Dubai because so many African companies are in the Emirate. The Sheikha then moved on to discussing food and water security. The UAE is interested in working with COMESA to secure those commodities. In return, the UAE is interested in providing partnerships and cooperation on renewable energy, particularly through “the sustainability giant, Masdar”. It is also interested in potential infrastructure projects, such as railways. “There is great synergy between these economic blocs. If this relationship is fostered with more care, we can grow many times over, not just gradually.” Ashby then discussed the frequently mentioned point that Africa is looking for people who will add value to the continent’s raw materials. He asked Mwakwere to speak further about what African nations are looking for. Mwakwere described the huge swathes of land in COMESA that can be used to grow and process food that can go around the world. “If you decide to invest in food production in COMESA, I can assure you that the returns on investment will be higher than anywhere else,” he emphasised. Charles Mbire, Chairman, MTN Uganda, (left) and H.E. Sheikha Lubna Bint Khalid Al Qassimi, Minister of Foreign Trade, UAE
  19. 19. 20 4th COMESA Investment Forum “This conference is a door that allows the world more access to COMESA” The reason was that resources are plentiful. Additionally, there were corridors being developed to facilitate transport infrastructure. This created many opportunities that are awaiting investors. Investing in COMESA will not just be profitable to investors, but will also add knowledge to people in the region. Comments and Questions from the Floor: The first question from the audience was from a COMESA- based businessman to Sheikha Lubna, asking about special programmes that the UAE government – rather than just UAE businesses – has planned for the COMESA countries. The Sheikha explained that joint commitment from both sides continues helping businesses go forward. The UAE is promoting services in the COMESA region, such as Emirates Airlines. The UAE is a springboard for moving out into a greater international arena and can be used for re-exports. She gave an example of how creating access to a new area can increase business and connectivity: Emirates Airlines opened a route to Brazil, which really boosted business there from different parts of the world. The next comment came from Dr. Asfour, Vice Chair of the COMESA Business Council. She stressed that COMESA needed added value for its industries, and wanted to transform small and medium-size companies into larger companies. She also noted that capacity building is crucial to educate the workforce, and this is beneficial for both regions. Sheikha Lubna agreed and pointed out that through public-private partnerships, governments open doors, create ease in doing business, and remove trade barriers. At the end of the day, however, it is the business people who have to get together and lead most of the projects: “Governments open the doors, businesses walk through them.” In terms of building capacity, she agreed that it impacted both sides. “For example, the UAE has lots of well-educated Egyptians from COMESA who come here to work, so we benefit from COMESA’s capacity building as well.” A member of the audience from India voiced concern about the investments of venture capitalists. Like the UAE, India had also been taking on large-scale modern farming projects in COMESA. However, venture capitalists did not want to stay in the countries they are working in for more than five to ten years. Additionally, venture capitalists wanted to see their investments floated on local and regional stock exchanges. A UAE businessman complained about the lack of information available to investors looking to move into Africa. Ashby explained that Africa is getting increasingly connected to the internet, so that will change things. Mwakwere noted that this was an important observation, and it is a problem COMESA is addressing adequately because it knows that proper information must be in place to increase business. This conference, he explained, is a door that allows the world more access to COMESA. Introductions begin here at this conference, but there are increasing amounts of information on COMESA websites. He then offered some contacts for those who wanted more information on investment opportunities. “Dubai is a place the whole world comes to – we are all here. Let’s connect. I was being told that the banks here are full of money. Well, I can tell you, Africa is full of opportunities,” Mwakwere ended. Main Outcomes: Dubai and COMESA are working to further strengthen historically strong trade ties. COMESA can take advantage of Dubai’s experience and facilities (such as technology, infrastructure, free zones, zero trade barriers, and global market access) while Dubai can take advantage of COMESA’s growing consumer markets and natural resources to ensure its food and water security. Investors need adequate information about the opportunities and challenges in COMESA. (A COMESA Regional Investment Agency representative office will be established in Dubai as a result of this demand). Partnerships between local African businesses and international investors are key to successful business ventures in COMESA as they can help bridge the information gap, while being beneficial for all parties involved. Right to left: Ahmed Bin Ali, Group Senior Vice President Corporate Communications, Etisalat Group; Hon. Chirau Ali Mwakwere, Minister for Trade, Kenya; Tom Ashby, Business Editor, The National; H.E. Sheikha Lubna Bint Khalid Al Qassimi, Minister of Foreign Trade, UAE; Peter Kiguta, Director General (Customs and Trade), East African Community; Charles Mbire, Chairman, MTN Uganda Plenary session
  20. 20. 21 4th COMESA Investment Forum Parallel Session Moderator: Pat Lancaster, Editor, The Middle East Speakers: H.E. Hisham Al Shirawi, Chairman, Economic Zones World, UAE Alex Gitari, Finance Director, PTA Bank Oti Ikomi, Senior Vice-President, Ecobank Transnational Inc Chris Kirubi, Chairman, Haco Industries Ltd, Kenya Mahmood Sharif Mahmood, Foreign Trade Policy Director, Ministry of Foreign Trade, UAE  T his session, moderated by Pat Lancaster, Editor, The Middle East magazine, focused on Dubai as a strategic hub for doing business in and out of COMESA. The first panellist, Mahmood Sharif Mahmood, Foreign Trade Policy Director, Ministry of Foreign Trade, UAE, shared his views as to why Dubai is a good location for doing business and trading with COMESA. “For example, the important economic trade links between COMESA and China can be bridged by Dubai, as we provide logistics, infrastructure and transportation facilities in between the two regions” Mahmood stated. He further elaborated on Dubai’s many advantages: 1. Its strategic geographic location: Dubai is on the ideal crossroads in terms of trade – it is situated on the international trade route to India, Asia and Europe. 2. Its sound and transparent economic policies and laws: Dubai has a liberal foreign trade policy and low tariffs, no troublesome customs procedure but a sound technical structure, property services and extensive port facilities. Two airports and free zones allow foreign businesses easy operations and the possibility to expand effortlessly. 3. Its strong relationship with COMESA: Imports from COMESA into the UAE have increased from USD 200 million to USD 2 billion, while exports to COMESA have increased from USD 90 million to USD 700 million. 4. Its strong bilateral relation with China can also be beneficial in facilitating logistics and transport between COMESA and China. As a businessman himself, Chris Kirubi, Chairman, Haco Industries Ltd, elaborated on the implications of increased trade for African businesses. He advised the people of the GCC that COMESA is full of opportunities. He encouraged them to think out of the box and come up with alternative models which can benefit both regions: “You have sand, we have soil – we can develop a partnership where we grow in Africa and then come and play in the sand in the UAE … As for property, you have to go to the sea to build homes … we’ll give you land.” He invited business leaders to come and invest in various sectors such as the African airports. He added how tourism has an enormous potential, which needs to be unlocked. He further emphasised the importance of the COMESA conference and hoped that it would result in more meetings and partnerships. H.E. Hisham Al Shirawi, Chairman, Economic Zones World, explained that Dubai has Jebel Ali free zone, Techno Park and similar facilities, which are conducive to doing business. “Dubai has always been a trading hub since the 19th century, as oil did not create Dubai. Trade was at the core of the country’s growth, as IT, manufacturing, real estate … all is related to trade, and at the core of Dubai activity.” Shirawi emphasised that he is keen on working closely with COMESA: “With 19 states, it is a huge region, with a population of more than 500 million by 2015. A GDP of USD 442 billion, 11 million square kilometres of land – Dubai has to be a part of this growth story.” What Dubai can provide now to help COMESA develop its economy and increase its GDP are the facilities available in Dubai, such as available mechanisms for trade and transport: “To get goods from COMESA to another place; to store them and then send them on to the rest of the world – that’s where Dubai comes in. Dubai’s airports have a capacity of 60 million passengers per year and a capacity of 2.5 million tonnes per year. Dubai airport is the fourth-busiest airport in terms of passenger handling; 130 airlines are operating at the airport and Emirates reaches 200 cities. Jebel Ali Port, where 150 shipping lines operate, is one of the busiest ports in the world. Any product reaches South America in 25 days, the US in 21 days and China in 20 days: no other port can do that.” Lancaster then turned the conversation to finance and how financial institutions and banks can facilitate trade. Alex Gitari, Finance Director, PTA Bank, explained the role of his bank. As a development bank, PTA Bank’s focus on trade finance was twofold. First, the bank supported exports of raw materials. The second focus was project finance, which was long-term lending. “We are supported by our member countries which help us leverage short-term and long-term lines of credit from banks to support trade and investment,” Gitari stated. PTA’s membership structure made it an Trade Dubai–Africa: StrengtheningTradeLinks
  21. 21. 22 4th COMESA Investment Forum “GCC investors are invited to come and do business in COMESA – and that is very profitable” open institution, so it was the case that China has a 6.53% ownership. Thus they had access to market information and sat on the bank’s board, which enabled them to see where opportunities lie. Oti Ikomi, Senior Vice-President, Ecobank Transnational Inc, elaborated on Ecobank’s focus on trade and investment between COMESA and the UAE. Ecobank, being present in 30 countries, had an array of banking services for investors and exporters. Ikomi said, “We understand the critical need on how to share information and to promote business. We opened a representative office in Dubai at Emirates Towers. We have the local knowledge so we offer trade finance, account services and investment banking advice, as well as mergers and acquisitions.” The moderator then asked the panel “Why help COMESA?”. Shirawi explained that it is not help that they were giving, rather it was a partnership that they were seeking. The statistics showed that COMESA could become a big economic power. It had many untapped resources, which if utilised properly, could make the economy grow fourfold. Food security could be pivotal, as COMESA had soil, water and crops, and Dubai had the arrangements required to market them. “So it’s a win-win relationship for everyone.” Mahmood further added that COMESA has succeeded in putting the investment opportunity in the right context. “There’s great potential in agriculture and the growing middle class.” Kirubi said that in every economy, business ruled the game. Africa would like to see Dubai as a centre of excellence. “We see a lot of counterfeit products in our markets, be it medicines or other products and would like to have Dubai’s support on this.” He asked for measurements to be taken so that no counterfeit products would be coming through UAE ports into the continent. Lancaster then asked how trade could be increased between the regions. Gitari stated that PTA Bank could only support trade within its policy – geared towards bringing in goods and raw materials. The nature of the bank’s trade finance did not allow financing of the distribution of ready-made goods. Ikomi further added how the UAE and COMESA could enhance trade facilitation mechanisms or incentives, such as tax holidays on a bilateral basis. These kinds of mechanisms can help the two blocs and encourage trading. Kirubi then suggested that political leaders should come up with a trade agreement. Mahmood explained how signing a Free Trade Agreement was a long process but a good proposition that needed to be developed by ministers and joint committees of foreign affairs. Shirawi intervened, saying that rules and regulations worked from top to bottom while trade worked from bottom to top. Without each other’s participations in exhibitions, trade shows, etc., no agreement would be of any use. “First there here has to be an increase in the exchange of goods and services between the two regions,” he concluded. Comments and Questions from the Floor: Prof. Dr. Maggie Kigozi, from the Uganda Investment Authority, stressed that the GCC-COMESA connection was based on a partnership, not ‘help’, model. “GCC investors are invited to come and do business in COMESA – and that is very profitable.” Another member of the audience enquired about mechanisms put in place to control business risks. Shirawi pointed out that details regarding all the investment protection laws, repatriation laws and transparency still needed to be improved in order to create better confidence and trust for all parties involved. However, many securities had already been put in place, but risks cannot be completely eradicated, even with a strong legal framework. Another comment stressed the importance of protecting the region against an increased influx of counterfeit goods. COMESA has had an initiative on intellectual property rights and it had set up standards within the region – these kind of initiatives needed to be built upon in order to prevent harm to local businesses. Main Outcomes: Dubai provides a solid platform for COMESA’s trade through its airports, free zones and ports, etc. Both regions will benefit from this new business partnership and financing models are available to finance trade. It was suggested that a Free Trade Agreement should be signed between Dubai and COMESA – this needs to be further elaborated by policy makers. Pat Lancaster, Editor, The Middle East, moderating the session Dubai- Africa: Strengthening Trade Links Trade Parallel Session
  22. 22. 23 4th COMESA Investment Forum Moderator: Andreas Proksch, Director General, Africa Department, GIZ Speakers: Usman Ahmed, MD, Corporate Banking, Barclays Africa Kevin Flannery, General Manager, International Emirates NBD Dr. James Mwangi, CEO, Equity Bank Skander Oueslati, Senior Partner, AfricInvest Capital Partners Abdulla Qassem, Chairman, Network International UAE  C haired by Andreas Proksch, Director General, Africa Department, GIZ, the session looked at opportunities in banking and finance across Africa. The main issue discussed was how the financial sector can fuel Africa’s economic growth. First, Proksch addressed Usman Ahmed, MD, Corporate Banking, Barclays Africa, and asked him to share his experience of working in banking across the continent. Ahmad first described the commonalities across the countries in the COMESA region: the GDP had been growing at over 5% for the last decade and most countries will continue at the same pace. Traditionally, there had been a concentration on a few specific commodity sectors: gold, copper, diamonds and other minerals. Within those sectors were a few key players and the financial sector had long worked with these players, hence it understood the risks in the context of the African environment. Nowadays, there was much emphasis on trying to intermediate the FDI flows between China, India and others in relation to these commodity sectors, and on trying to develop the retail side. “There are many products and services being developed and these are attracting interest from the financial sector. What’s needed is technology and infrastructure,” Ahmed explained. Barclays had been in the continent for a long time and the company understood it very well. “Given growth rates in Western Europe, the US and developed Asia, it is clear that Africa is the upcoming market. This makes it quite easy for banks to follow each other into Africa. For us, Africa has always been a core market, even during the financial crisis,” he concluded. Proksch then wanted to hear from Kevin Flannery, General Manager, International Emirates NBD, about his experience of the financial sector moving forward in Africa. Flannery described how the financial crises in Asia 14 years ago and in Turkey 11 years ago created open and competitive environments that forced banks to get their acts together. In doing this, the banks brought what customers and investors wanted, and created more transparency. He believed this sort of event may need to happen to Africa to help the country’s financial sector leapfrog to the level of such rapidly developing economies. Next, he stated that developing countries needed to be aware of three things: 1. Basel III: Global standards ask countries to shrink their balance sheets when they should be doing the opposite. 2. Rating Agencies: Most of the COMESA countries are not rated, or rated very negatively, which blocks off huge amounts of business. How rating agencies rate countries should change. 3. International Accounting Standards: These are designed by Western economies that are at a certain level of development. African countries are not at that level of development, but they are forced to adhere to standards they are not ready for. That is unfair. However, Africa could overcome these issues. “There are lots of international companies which want to come in. With the level of penetration in Africa so low, there are lots of opportunities,” Flannery ended. Parallel Session New Models for Financial Growth Dr. James Mwangi, CEO, Equity Bank, sharing his views on the African finance sector Finance
  23. 23. 24 4th COMESA Investment Forum Proksch then turned to Dr. James Mwangi, CEO, Equity Bank. As it is one of Africa’s most talked-about success stories in banking, Proksch wanted to hear from Mwangi what had made his business one of the most successful in the African financial sector. Mwangi noted: “I think Africa provides a unique opportunity for the finance sector. It has seen huge growth for the last 15 years.” He broke down the drivers of growth into the following points: Low level of penetration: On average, only 25% of Africa has financial access. As incomes rise, the population is becoming bankable. Infrastructure development: This is rapid, specifically in the telecoms sector. Infrastructure is acting as facilitator to business and reducing the costs of doing business. Regional organisations: these are helping individual states work together, rather than working on their own. Among other things, this increases the efficiency of regulatory frameworks and mobility. Movement towards democratisation: Africa is getting new and stable political systems that are not only more democratic but also facilitating business more than ever before. The transformation of agriculture: This is a huge industry in Africa. Changes in this sector are creating shifts in cross-sector opportunities. Sustained 5% growth rate: This offers huge opportunities for the finance sector, which is growing faster than the economies themselves. Skander Oueslati, Senior Partner, AfricInvest Capital Partners, next spoke about investing across the financial sector, particularly into SMEs. Oueslati explained that his company focused on providing new products to SMEs to help them grow their businesses. As some products are not very well developed in some countries, the company had set up a fund that helps develop innovative products across Africa. Through funds like this, the company had invested in a group of leasing companies in West Africa that were not doing well due to a lack of commitment from the main shareholder. Oueslati’s company bought the businesses and turned them around. It brought in a new local CEO, a new IT system, and new products. Now it was a profitable business, even if one of the main countries concerned is Cote d’Ivoire. Oueslati confirmed that financial products such as leasing, insurance, housing finance and mortgages can be profitable and “there are still many more products like this that can be developed”. Oueslati then spoke about the difficulty of raising funds from the private sector. Despite a good track record going back to 1994, private capital was hard to find. Even when private investors commit, they commit much less than DFIs. When it came to North Africa, the GCC countries were interested, but Sub-Saharan countries were not as interesting to the GCC. Abdulla Qassem, Chairman, Network International UAE, then spoke about his experience in selling payment systems to different African countries. He began by describing his company’s development in the Middle East. Network International, a subsidiary of Emirates NBD group, specialised in the payment industry, and focused on all the ways used to make payments of money: credit cards, mobile payment services, etc. Created in 1995 with a limited vision, it did not even have an ATM-sharing platform. The company was a bank that was the result of three bank mergers, so it needed to take on a project that made all three banks happy. The concept of outsourcing was very new to the Middle East, but that was how Network International started its companies. There were three major advantages in doing so: Speed to the market (because the infrastructure was already laid down). Finance Parallel Session
  24. 24. 25 4th COMESA Investment Forum “Africa provides a unique opportunity for the finance sector” Companies already have teams passing on experience. Companies only have to pay for utilisation of infrastructure, they do not need to build one. In entering the African market, Qassem noted that “what we realised was that there is a demand for these services – to have debit or credit card products, ATMs, point of sales – but the region has a scarcity of skills and infrastructure.” One of the most important projects was acquiring an Egyptian company previously called NTC, which was now called Network Egypt. The company also had a presence in Ghana and Nigeria. It served 70 banks across Africa with all types of products: credit debit cards, payment gateways, etc. Qassem concluded with the firm conviction that “there is potential. We believe in Africa.” Leading the discussion that followed, the moderator, Proksch asked Ahmed about the potential of Islamic banking. Ahmed believed this could be extremely successful in COMESA. “Because there is so much commodity-based activity in the COMESA economy, it seems that Islamic banking would be a very natural fit,” he emphasised. “Most commodities, except gold, are approved Islamically to underpin transactions,” Ahmed explained. “If Islamic banks consider Africa important and are willing to partake in some of the risk taking that goes with financing imports and exports, there is huge potential for them. There is also huge potential in infrastructure as well, which is also very suitable for Islamic banking. What is needed is that these banks come and take risks. Relying just on DFIs and the World Bank does not add value from a commercial perspective. On the retail side, there is Islamic banking potential in Kenya, Nigeria and others. Some countries are more receptive to Islamic banking than others.” Flannery commented on the same subject, stating that issues with property entitlement and fiscal aspects had created blocks to Islamic banking. Unless there was a huge demand in the market, the structural concerns could be a big challenge. Next, Proksch moved the discussion into the context of the changing political landscape of the Middle East and North Africa, and how it could be affecting operations on the ground. Oueslati pointed out: “As a Tunisian, I think that the change that happened in Tunisia and Egypt will unlock a lot of opportunities in these two countries.” As an example, he explained that there used to be only one micro-finance institution in Tunisia, called Enda, because the former government did not want the lower sector of the economy to get more power. Now, doors are open for micro-finance in Tunisia, and this will address issues that caused price rises in the country. Lending to micro-enterprises will bring opportunities for the country and investors in many segments of the economy.” Oueslati also expressed his frustration at the fact that a country like Tunisia, which had almost 100% mobile phone penetration, did not have mobile payment systems because the former government felt threatened by it. These sorts of government blocks kept countries like Tunisia behind, and the financial service providers in those countries now had to do a lot to catch up to international standards. Qassem emphasised the importance of political stability for investors. “The revolutions in Tunisia and Egypt are opening many opportunities and markets there have a brighter future once they stabilise. Many services are now being unveiled because they are no longer restricted. Mobiles are a great example, but it also goes across all the sectors.” Mwangi asked if things could be put into perspective. He expressed amazement at how fast Africa was transforming. It had taken the developed world over 200 years to make this transformation. Africa must pay attention to the next generation emerging – it is very educated, sophisticated and connected. Investors must work through the transition by focusing on these young people rather than just the politics.
  25. 25. 26 4th COMESA Investment Forum Flannery described Emirates NBD’s analysis of Libya, which saw the banking system as not geared towards developing the markets and the economy. He expressed hope that this will now change. He remembered how in 1999, the company went to Syria to open up one of the first private banks. Since then, the country had changed dramatically. Comments and Questions from the Floor: Starting the question and answer session was Dr. Asfour, Vice Chair of the COMESA Business Council and President of the Egyptian Business Women Association, who discussed the need for social justice in Africa. The revolution in North Africa started because of unemployment, poverty and the gap between rich and poor. She wondered how investments can impact on the daily life of African people. A question was raised by a member of the audience regarding SMEs. Although there has been little talk about SMEs, they are the backbone of the economy. He recognised that it is difficult to finance SMEs because of transparency issues and wondered how these SMEs are being financed. Oueslati explained that his company focused on SMEs, and knew that they are the backbone of most African economies. Investing in them is not easy at all. Proximity is a must, which is why they had six offices in Africa. His company’s role is to clean up the books and enhance corporate governance. They are straightforward with their clients, saying these are the rules of the game. In several instances, they had to drop potential companies because they would not comply with strict requirements. There are some banks that are supportive of SMEs, but they are limited and local. Equity Bank is one of the banks that look at the bottom of the pyramid in Kenya. But to help SMEs move to the next level, we needed the help of government and local banks, he said. Mwangi stated that this was the official growth sector in Africa. The micro and SME sectors were what was pushing the economies. This sector can be banked, but we needed to develop special programmes and focus more on cash-flow lending rather than collateral-based lending, he said. Finance lending needed to be more inclusive of the bottom of the pyramid. Technology is one of the biggest drivers of equity: mobile banking is making banking much easier, as there is no need for bricks and mortar. Technology will be the biggest driver of inclusion in Africa. Main Outcomes: The African financial sector offers many opportunities and has seen tremendous growth in the last 15 years. This is due to a rising bankable population, infrastructure development, regional organisations that are helping to increase efficiency and mobility, a general movement towards democratisation, the transformation of Africa’s main sectors (such as agriculture) and a sustained 5% growth rate. Despite SMEs forming the backbone of the economy, it is still particularly difficult to find funding from large banking and financial institutions. Private capital is also hard to come by to facilitate investments into SMEs. The demand in Africa for financial services and products is growing and promises to be profitable. Islamic banking offers an opportunity for the financial sector in COMESA, as most commodities and infrastructure are very suitable for Islamic banking. However, there are structural concerns that will hinder the development of Islamic banking unless there are huge demands for it. The political developments in the Middle East and North Africa will open up many opportunities for the economies and particularly the financial sectors. This is already visible in Tunisia, where many micro-finance institutions have emerged in the weeks following the revolution. Left to right: Andreas Proksch, Director General, Africa Department, GIZ; Skander Oueslati, Senior Partner, AfricInvest Capital Partners and Usman Ahmed, MD, Corporate Banking, Barclays Africa Finance Parallel Session
  26. 26. 27 4th COMESA Investment Forum “You cannot escape logistics: it is an essential element of trade” Moderator: Anver Versi, Editor, African Business Speakers: Khaled Ahmed, Senior Vice President Strategy and Development, Economic Zones World, UAE Amadou Diallo, CEO, Africa and South Asia Pacific, DHL Global Forwarding, Africa Hussein Hachem, CEO, Middle East and Africa, Aramex Deanne De Vries, VP, Africa Agility Sanjeev S. Gadhia, CEO, Astral Aviation Ltd. Kenya  C haired by Anver Versi, Editor, African Business magazine, this session aimed at looking at where the opportunities within the logistics sector in the COMESA region are to be found. Versi introduced the discussion by giving an overview of logistics. He stated that “a history of trade is a history of logistics” and therefore it is a key part of the business of moving goods and people from point to point. He addressed Sanjeev Gadhia, CEO, Astral Aviation Ltd. Kenya, asking him to share his experiences of running a cargo airline. Gadhia explained that logistics had many challenges and, at the same time, wonderful opportunities. The challenges now for the COMESA region were several: primarily, the ports needed to be expanded; transit corridors were stretched beyond capacity and needed to be expanded too; railways in East Africa were in need of rehabilitation; new talent needed to be found and trained; and airport infrastructure needed to be upgraded to make the airports more efficient. “But these challenges can be opportunities for trade,” he concluded. Versi added that timing was also a part of the challenge: there is a problem with moving goods from the port of Mombasa because it takes time to get goods from the warehouses to rail and roads. The goods eventually reach their destination a long time later. “Simply moving goods from point A to point B needs better customs and synchronised systems.” Next, Khaled Ahmed, Senior Vice President Strategy and Development, Economic Zones World, UAE, gave his input on the role of logistics in the UAE. Ahmed said that Dubai had been a merchant society from the beginning, from pearl diving and fish, then to oil, tourism and real estate, etc. Across the timeline, logistics had been the base for facilitating this trade and growth. The logistics infrastructure had always been the bedrock of trade. Currently the free zones in the UAE house 6,000 companies, most of which were featured in the Fortune 500, and these economic zones allowed companies to set up businesses and trade internally – all of which required a whole set of instruments and tools. “You cannot escape logistics: it is an essential element of trade.” Hussein Hachem, CEO, Middle East and Africa, Aramex, noted Africa’s major role in trade: in terms of resources, Africa was the richest continent and is heavily involved in trade with the Middle East. Commodities travel from Kenya, down to Djuba, and finally Zambia. Africa and COMESA are considered the most important in bringing the products closer to the market. Deanne De Vries, VP, Africa Agility, described her company’s activities and stressed that Agility wants to facilitate trade by following the path of least resistance, and the UAE had many good policies to make trade easier. African countries were quickly gaining pace, and Rwanda is a great example, as it was rated the world’s top reformer in the World Bank’s Doing Business report, partly due to its trade- friendly policies. Amadou Diallo, CEO, Africa and South Asia Pacific, DHL Global Forwarding, explained that DHL had a lot of trade to Asia and the Middle East, and that volume of trade is constantly shifting. He believed that it was important to let the African consumer have the opportunity of choice, and businesses should try to set up a platform to sell goods anywhere in the world. Unfortunately, it is not well known that Africa is such a commercial hub because infrastructure had not been part of the focus. Versi then asked for examples of what investors needed to know. Gadhia noted that Africa has an abundance of labour and natural resources but was not exploiting them properly yet. Nairobi, Johannesburg, Lagos and Cairo were all working from and/or within hubs into almost everywhere, including the DRC, so trade within Africa is possible as long as there were customers. What Africa needed right now is expertise with PPP and sustainable business. Ahmed described a success story of PPP by using Dubai World’s experience in Djibouti as an example. The experience Identifying Opportunities in Logistics Parallel Session Logistics
  27. 27. 28 4th COMESA Investment Forum was successful as a lot of learning came from it and the port brought out hundreds of companies. Ahmed believed that as governments plan for these things, they should think of the returns they will receive in the end. In essence, the economy had to be as open to free trade as it can, or else the economy would be closed in. So they should create export free zones and invest: the model for business was changing and investors must keep up. Diallo added to Ahmed’s point by encouraging businesses to mobilise and inform investors. Business had been growing 27% across Africa every year, and 50% is the rate of growth in Indian and Chinese markets. Obviously African countries needed to make their markets grow as fast. De Vries pointed out that it was important to remember that “Africa is not a country. It is over 50 countries”, and that means there must be offices in every country, and logistics should work with locals to get insider knowledge. “The key is to show respect, even if you understand logistics,” she said. “Ultimately, there is a viable solution to moving goods.” Comments and Questions from the Floor: The first question was about geographical considerations: “Considering that all the elements of opening an operation are met, what is the role of the geographic environment? Does it affect decisions significantly?” Hachem responded that it depended on the capacity of the trade movement. If establishing a hub made commercial sense, then it would happen. Gadhia answered that in terms of airline services, it depended on that country’s regulations in terms of moving in between landlocked countries. He stressed that the Nigerian government is an excellent example, as it has taken steps to help logistics significantly. De Vries said that with regard to Agility, their location is often decided by their customers. The next comment and question came from Dr. Kwaku, Founder, The Kwaku Group: “The importance of logistics is the choice that it gives the consumer. But we have not emphasised enough the chances of competitiveness that it gives the seller. If you want to play with the big boys in the global market, you need to take logistics seriously. The issue of supply-chain management is linked to government supplies (in former British colonies), which are still based on the curriculum of the 1960s. What is the HR capacity that is supporting the sector in the last 10 years? Are we getting the right skills? I see a lot of logistics institutes popping up, but how useful are they? Right now the situation is very opportunistic. What do you think we need to drive this sector successfully?” Diallo answered that it was a form of trial and error: people were appointed from Africa, they made mistakes and then they were trained in places like Dubai to improve. In some ways things were getting better, and projects such as the MDGs were beneficial to development. The final question came from the moderator himself, who asked at large: “What is the scope of investment?” Hachem concluded the session by replying that “the scope is as big as the investment”. If Tanzania wanted to compete with Kenya, it needed better capacity and damage-control infrastructure. He noted that if you had a strategy for your economy, you needed to enable a proper infrastructure. We lived in a competitive world and the clients moved with it, so one cannot rely on loyalty, he said. In order for Africa to become more competitive, it needed to upgrade its logistics capacity. Main outcomes: Logistics is an essential element for trade. Despite trade having increased considerably, making Africa a commercial hub, there are still many logistical and infrastructural shortcomings, which make the transport of goods difficult. Warehouses, airports, rail, roads and ports need to be improved, as well as their connectivity. PPP projects can be very beneficial, as they bring along experience and business opportunities for the private and public sectors. Capacity building is key, and talent needs to be trained effectively. While there are many logistical institutes cropping up in Africa, experience is still lacking. In order to become commercially more competitive, Africa needs to upgrade its logistics capacity. Left to right: Deanne De Vries, VP, Africa Agility; Hussein Hachem, CEO, Middle East and Africa, Aramex and Sanjeev S. Gadhia, CEO, Astral Aviation Logistics Parallel Session

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