East African Talks

Over the last couple of weeks i have had the pleasure of meeting with 2 of East Africa’s leaders. Both President Museveni of Uganda and President Nkurunziza of Burundi were in London for the British hosted Somali talks.

CBC hosted President Museveni for lunch where he Launched Uganda’s new tourism initiative and discussed the business and investment climate in Uganda. The President spoke with a great deal of authority on many issues affecting Uganda and made a strong impression on the business leaders gathered for the Lunch. His views and plans to ensure Uganda’s newly discovered natural resources are a boon for the whole of Ugandan society was particularly interesting.

The following day I held talks with President Nkurunziza of Burundi. I don’t know Burundi as well as the other EAC countries as it is not yet a Commonwealth Member. However I was pleased to hear from the President that his country has begun the office petitioning process to join the Commonwealth. In many ways echoing President Kagame before Rwanda joined, President Nkurunziza spoke of the importance of connecting his country’s businesses more fully with the English speaking world, and explained how he has already made English the main language in schools. I offered the President CBC’s services in helping link up Burundi with Commonwealth Investors and businesses.

Burundi joining the Commonwealth will make the EAC a Commonwealth Exclusive Club, this I feel will help bind the Union together and make in a strong investment and business destination.

CBC hopes to return to East Africa in early 2013 to hold its flagship Africa Event the Africa Investment Forum in Kampala Uganda; both Presidents were supportive of the plan.

China and the Commonwealth

I was delighted to return to Beijing in May to Launch the Commonwealth Business Forum 2011 to the Chinese Market. China will be an important player in this year’s Forum given Perth’s, the host city, resource development with the country and Commonwealth’s African Members increasing relationships with Beijing. We hope the Forum can be a stepping stone to introducing Chinese companies and investment to some of the Commonwealth less well known Members.

While there I was honoured to be invited to address the China Council for the Promotion of International Trade’s annual Chinese Enterprises Outbound Investment Conference. This was the first time the Commonwealth was represented at the Conference and I was delighted to have the opportunity to introduce the 1000 plus delegates to the opportunities available in the association.

Ensuring the Commonwealth’s myriad opportunities are well recognised in China is essential given the scale of the countries overseas investment, in 2009 Chinese Companies invested US$56.3 billion dollars abroad; this was 3125 investments to overseas companies, in 129 countries. As China continues its ‘Going Global’ policy it is essential that the Commonwealth gets its share of this increasingly large pie.

Opportunities in Zambia

It was a pleasure to be in Zambia a couple of weeks ago, it is a county I have visited may times over my career and one I have always enjoyed my stays in. I was in Livingston for the Annual meeting of the Zambia International Business Advisory Council with President Banda. It was great to hear about the progress Zambia has made over the last decade since the council was set up. Zambia, last year, had the highest growth rate in Africa and the 25 highest in the world, Zambia is now one of the largest copper producers in the world and last year increased its output at a rate higher then both Chilli and China. The Country’s GDP per Capita has now reached lower middle income levels. The ZIBAC board members were universally impressed worth the progress the country has made and at how well it is doing. One of the main recommendations to President Banda was that he should increase the money spent on making sure the world knows about Zambia’s successes and possibilities – as you only need tell a bad news story once for it to be heard, but good news needs to repeated again and again…………

Following the ZIBAC meeting we held the first Zambia Investment Forum, which we co-organised with the Zambia Development Agency. The Forum brought together 50 international business leaders and investors with local project holders and government leaders to forge new partnerships and help increase the involvement of the international private sector in Zambia’s economy. 3 MoUs we signed at the Event.

The President told me that his government is stepping up its efforts to tackle its skills and training shortages in the population and recognises this can only be done in partnership with the private sector – so this will be a thriving investment opportunity over the coming years as well as good opportunities in Agriculture, Tourism and Mining.

Zambia is a great investment destination and I would encourage investors to look closely at the opportunities available there.

Tanzania and AIF

I was in Tanzania last week to meet with President Kikwete to discuss preparations to hold the Africa Investment Forum in Dar es Salaam. This year AIF will be a part of the East African Community Summit and will be addressed by all 5 EAC heads of Government.

Tanzania holds a particularly affection for me, it was host at the request of then President Mkapa, to CBC’s first Investors Roundtable back in 1999. This clearly demonstrated CBC’s early commitment to taking investment to countries that had never received it before, as it was also the first international investor conference ever held in Tanzania.

The AIF, always a popular event, this year comes at a time when Africa’s star is rising and the world is taking more notice than ever before. The IMF’s most recent forecasts have predicted that 7 of the 10 fastest growing economies in the world over the next 10 years will be in Africa. The potential of a Continent with 1 billion possible consumers, that has added more people to the middle classes over the last decade than any other area of the world is not to be underestimated.

Planning for 2011

This year is going to be one of CBC's busiest. As a CHOGM year 2011 will have a strong focus on Perth and the build up to the Commonwealth Business Forum in October. However before we fly to Australia we will hold events across the Commonwealth. Starting next week in Gujarat, India where we will hold a SME roundtable as part of the Vibrant Gujarat event. Our Africa focus will be maintained by the Africa Investment Forum to be held in Tanzania and the G8 Africa Business Forum to be held in London. We will return to the Americas for the Caribbean Investment Forum in Trinidad & Tobago. This is alongside plans to host a number of Commonwealth Heads of Governments and Senior Ministers at Members functions throughout the coming year.

While Perth will be our main focus over the coming year as we develop the business forum programme with our corporate members and other stake holders, we will focus on 4 main themes throughout 2011.


1) Broaden the range of Commonwealth countries that CBC interacts with and play a role in promoting Trade and Investment in their economies.

2) Play a greater role in helping strengthen connections between Commonwealth countries and the wider global economy.

3) Continue CBC's focus on infrastructure development as a key support for growth and development

4) Finally CBC will develop a stronger focus on helping SMEs to internationalise into the global economy

2010 and the Commonwealh

2010 has been a difficult year for the world economy with growth stifled in the developed world and deficits to be tackled. The Emerging world on the other hand has demonstrated the intrinsic strength and is proving that the engine of the Global economy has categorically shifted to the East.

Over the last year, millions have joined the middle class in Africa, Asia and the Caribbean and are entering the global economy as consumers, this will continue. In Africa alone, 200m people will enter the market for consumer goods over the next five years. 2010 has been a year of surprisingly good global growth of around 4%, with emerging markers displaying rates of between 6-7% and the developed world 2-3%. This will be the pattern for years to come as the emerging nations drive the global economy forward.

Much has been written about Asia's role in the world (especially given China's emergence as the second largest economy in the world earlier this year) but the story that gets less recognition is Africa's growth story, 5% this year and predicted to be around 5.5% next year. In 2010 Ngozi Okonjo-Iweala, Managing Director of The World Bank said that Africa could be the next BRIC, and become a major recipient of investment rather than aid. At the same time McKinsey told companies, that 'global businesses cannot afford to ignore the potential' of Africa.

Africa's growth is creating massive new business opportunities, it is predicted that Africa's 4 leading industries, retail services, agriculture, resources, and infrastructure could generate as much as $2.6 trillion in revenue annually by 2020. And Africa is gaining greater access to foreign investment, total FDI into Africa rose from $9 billion in 2000 to $62 billion in 2008, and today the rate of return on foreign investment in Africa is higher than in any other developing region.

In 2011 CBC will continue its engagement with all the Commonwealth nations, we will hold investment and business promotion events in Africa, the Caribbean, Asia and the UK. And in October 2011 we will host the 8th Commonwealth Business Forum in Australia. CBF 2011 will be a major event for Large and small companies with about 1000 business leaders attending.It will also help us to reach pacific small states that we have had difficulty engaging with before. 2011 should be an exciting year!

Power reform in Nigeria

Last month at the request of HE Goodluck Jonathon we organised in collaboration with the Presidential Task Force on Power, Chair by Professor Bart Narji, a Presidential Retreat for power Sector Investors. The President called the retreat to discuss with the international private sector his Roadmap to privatising Nigeria’s power sector. CBC brought 70 high level International power sector investors to the event from over 30 countries, both inside and outside the Commonwealth. In total 400 people attended the event, to hear addresses from the President, Vice President and Senior Ministers.

The Economist, who were in attendance, wrote an interesting article about the retreat that can be read here

The following week, we here honoured to host a lunch for the Vice President, Mohammed Namadi Sambo, during his visit to London. The Vice President addressed a packed room of CBC Members, High Commissioners and business leaders with an interest in Nigeria on the power privatisation plans, during which he described CBC as a ‘true friend of Nigeria’.

CBC has been fully engaged with Nigeria since its return to democracy, in fact we were the first organisation to organise an investor conference in the country. Over the last few years, however, our relationship has shifted in priorities, moving away from more generalised trade and investment promotion – that Nigeria is needing less and less as the world wakes up to the opportunities available in the country - to more niche work, such as the power retreat. This change, I think recognises Nigeria’s move towards middle income status and as one of the drivers of Africa’s economy over the coming years.

President Kagame's inauguration

I was honoured to be invited by President Kagame for his inauguration last week. It was an amazing event that filled the Stadium to its capacity of 40,000 with 10s of thousands more watching on screens outside. The Event was attended by 14 Heads of State from across Africa, Ministers, Private Sector Leaders and representatives of International NGOs and Agencies.

The Event was not just the inauguration of Rwanda’s President but the inauguration of a new African Statesman, demonstrated by the level of support shown by visiting Heads of State.

President Kagame dedicated much of his speech to responding to his Critics on Human Rights and discussing the development successes in Rwanda. Anyone that has seen the changes in Rwanda over the last 10-15 years cannot fail to be impressed with the level of progress and development.

While NGOs and the International Media have a right to discuss Rwanda’s Human Rights, I hope they do it within the framework of the Development successes. Leaders like Kagame have to be engaged in Dialogue with constructive criticism rather than publicly hung.

Africa is changing, progress is being made on democracy and economic development and the continent should be engaged in recognition of its potential to be the next BRIC. Africa will be one of the key drivers of global growth over the next century. Let’s not miss this opportunity by failing to create mutually beneficial dialogue and consolidate our partnerships with the continent.

Africa the next BRIC

Sub Saharan Africa can be the next BRIC; from 2000 to 2010 Sub Sahara grew at a faster rate, in nominal dollars terms, than both India and China and is predicted by the IMF to grow at a faster rate than Brazil between 2010 – 2015.

Sub Sahara has much going for it and conditions are improving constantly. Between 2002 and 2008 the continent achieved a growth rate of 5.2% a year on average, and only dropped a single percentage point since the global economic crisis – still a higher rate than the developed world is expected to achieve.

Africa’s population had grown to 820 million in 2008, and the percentage that can be considered ‘middle class’ has grown astronomically since the 1990s. Africa is now both ready to take its place as a market of consumers for global products and as an attractive investment destination for global business looking for new opportunities. I would suggest Commonwealth countries to potential investors as they make up 17 of the top 20 places to do business in Africa, according to the IFC.

To achieve this jump, to become the 5th BRIC, Africa needs to deal with a number of persistent issues such as the infrastructure and power deficit, increasing access and the quality of Education and enhancing business competitiveness, these will have to be achieved along with progress on democratization and good governance. To succeed on both economic development and good governance simultaneously African will need more strong and dynamic leaders. Rwanda and President Kagame are a case in point; it is unfortunate to see the international media running negative stories about one of Africa’s best success stories.

Paul Kagame has been one of the most ambitious and successful African leaders in fighting poverty and driving growth in his country. This year the IFC named Rwanda the best business reformer in the World, likewise Paul Kagame is recognised by many western leaders as one of Africa’s Best, Tony Blair described him as ‘visionary’ a sentiment I agree with.

While there are concerns about the current election in the Rwanda, we must not forget the impact that Kagame has made on the development of his country. Democracy is hugely important but it will not be achieved without economic development, democracy on empty stomachs will not succeed –this needs to be more widely recognised.

While raising the issue of Human rights, we should be supporting leaders like Paul Kagame that are driving progress in their countries and the continent. Africa is also making progress on democratisation, Kenya’s recent peaceful referendum that aimed the settle the country’s political disputed is a good example. These stories and there like should be the ones that the international media focus on as Africa strives to become a BRIC. A more balanced approached to reporting on the continent, that helps encourage Africans, will benefit us all in the end.

India, Africa and employment

An interesting report by the Oxford poverty and human development inactive was recently released that found that there were ‘more poor’ in India than Africa. This doesn’t surprise me as much as it seems to have others, while India has made improvements it has never rated highly on the UN’s Human Development Index, India ranked 134th out of 182 countries in 2009.

What occurs to me, is the similarities between the areas of high poverty in India and Africa. Outside of the urban poor, the areas with high levels of poverty are predominantly regions with large deposits of natural resources and areas of with high levels of agricultural fertility, that still operate some form of feudal system.

The reasons for poverty are the same the world over and many of the solutions can be applied globally. Investing in agriculture will allow farmers to move away from subsistence to commercial viability. Resource companies are not ‘good’ job creators, so they must be pushed to downstream and help create the support industries that will provide employment in resource rich regions.

Poverty will only be tackled successfully where government works in partnership with the private sector. Government must provide a regulatory and tax environment that stimulates economic activity. While the private sector must take advantage of this and provide employment along the length of the value chain.

Africa and Aid

At the beginning of the week I had the pleasure of opening our G8 Africa Business Forum in London. The Forum is an annual event that feeds African private sectors views into the G8’s deliberations. Considering the recent economic turmoil we thought it best to focus on the good, and highlight the myriad opportunities offered by Africa, hence the theme Success stories and new partnerships.

The Forum was addressed by the Prime Ministers of Togo and Cameroon and Ministers from Angola, Namibia and Zambia. We were also delighted to have 2 members of the UK’s new coalition government address the Forum.

One of the Key messages coming out of the forum, and one I think is particularly important, from both government and business is the need for Africa to accelerate its move away from dependence on foreign aid to wealth created by its own citizens.

Future foreign aid must be directed to concentrate on reforms to deliver sustainable results and improve value for money. Aid should be targeted to improve the basic economic infrastructure, to improve competitiveness and produce higher rates of growth. As a result African government’s tax revenues will increase, which will in turn allow them to focus on their own social infrastructure. This will shift the responsibility for their delivery of public services like health and education to African Governments.

Entrepreneurship and the private sector are the only sustainable drivers of growth in Africa, and targeting Aid to enhance them should accelerate the continents ability to create its own wealth and increase its prosperity. I have personally been advocating this message to Aid Agencies and Governments and have written to the Chair of the G8, the Canadian Prime Minister to reiterate it.

Africa Day

Last week we celebrated Africa day with a dinner for High Commissioners and Ambassadors from African Countries. The Dinner was hosted by Essar Group and addressed by Antonio Gumende, High Commissioner for Mozambique and acting Dean of the African Union Heads of Mission. Discussions focused on increasing investment in Africa with a particular focus on Infrastructure and power generation. I would like to thank Essar Group’s Vice-Chair Ravi Ruia for flying in especially for the dinner.

The dinner marks a continued increase in interest and confidence in Africa from business around the world; capital flows rose by 16% up to a record $62 billion in 2008, while foreign direct investment fell 20% worldwide in the same year. Many countries are increasing their presence in Africa Singapore, Malaysia, Canada and the UK, to name but a few. Australia’s presence is also increasing, around 40 per cent of Australian mining companies' overseas projects are in Africa and Australia’s trade with the continent has grown about 9% a year for the last 10 years.

This renewed confidence was supported by a report in the FT this morning, that stated 500 of Africa’s companies have been displaying growth of about 8% a year since 1998; this is supported by a surge in export growth that is either exceeding or matching that of the BRIC countries. The last few decades of the 20th century were all about the Asian tigers driving Asia’s growth, the next 20 years could well be about the African Lions that will drive Africa’s.

Africa Investment Forum

The Africa Investment Forum, which we held in Ghana for the first time, was the largest Investment Forum of its type CBC, has ever held. Over 700 delegates gathered from more than 30 countries for the Forum. One of the most impressive features of this year’s Forum was the wide scale involvement of Investment Promotion Agencies from across the Africa; over 220 projects were up for discussion.
3 Heads of State, 15 Ministers and over 50 Business leaders took part in the sessions; there were a couple of key themes I noticed coming out though out the Forum.

1) Every session, whatever the title on the programme eventually made mention of greater regional integration and the importance of enhancing Intra-Africa trade.

2) Secondly, one of the key impediments to growth and development highlighted at the forum was the need to do more to reduce the infrastructure gap in Africa; this was also flavoured by the talk of Greater regional cooperation – reductions in infrastructure barriers can happen faster if countries work for a more unified response.

3) The Importance of Agriculture for the coming decade, increasing rural incomes is essential to driving sustainable growth and development. The ever growing Global demand for food products is a perfect opportunity for Africa to taped its potential in this area.

The President of Togo, HE Faure Gnassingbe, requested that CBC take part in the promotion of Togo to International Investors. The request was made after the President addressed the opening ceremony and hosted a private Togo investor roundtable during the Forum.

The Africa Investment Forum 2010 was a great success and we look forward to carrying this though to the next AIF in Uganda, February 2010.

Not to Award Africa Governance Prize – A Mistake

Not to award the Africa Governance Prize is a mistake and the wrong decision. The Prize is awarded by the Mo Ibrahim Foundation to leaders that have ‘ruled wisely’ and ‘handed over power to elected successors’. All 3 Presidents, Thabo Mbeki, Olusegun Obasanjo and John Kufuor, with some blips, have brought their countries forward and have been succeed by democratic means. I have known all 3 Presidents personally and worked with them over the years, they have worked in difficult times and circumstances to the benefits of their respective countries. Even recognising their faults and flaws, if Leaders such as these 3 aren’t eligible, President Mugabe must be having a good laugh!

I wonder at the Jury’s intentions by not awarding, are they trying to raise the bar for African leaders in the future? If so, it seems unlikely that the Foundation will award a prize in the next few years. If these criteria were used globally, would the jury be able to pick a winner?

Perhaps, if the prize was awarded to the Presidents who are still serving their first term; it could have a more direct impact and improve the performance of an incumbent government, providing an incentive to govern well and a democratic transfer of power.

Ugandan Infrastructure and FDI

I was very pleased to have the opportunity to meet with HE Yoweri Museveni the President of Uganda last weekend while he was passing though the UK on the way to New York. President Museveni hosted CHOGM and Commonwealth Business Forum in 2007, it was good to catch up and talk.

A couple of Points he raised were of particular interest;

1)
Firstly, Uganda is re-prioritising reducing the Infrastructure gap as quickly as possible. A renewed focus on building and renovating, roads, rail, ports and especially power generation and delivery will remove one of the largest hurdles to development and growth.

2)
The Second point was perhaps the more pertinent; President Museveni made it clear that while he will more than welcome Foreign Direct Investment, the Ugandan Government was prepared to pursue large Infrastructure projects alone. The Financial crisis has made accessing traditional sources of funding harder than ever before, and with the discovery of oil in the Lake Alberta region earlier this year; Uganda now has a greater confidence that it can find its own solutions to its infrastructure issues.

The government is continuously increasing its allocation for infrastructure projects in annual budgets, this is good news. Uganda and other African countries are becoming more confident in shaping their future, similar sentiments were expressed by the Presidents of Ghana and Rwanda when I met them recently.

Ghana - Power, Agriculture and AIF 2010

While visiting Ghana for the first time in several years I was fortunate to have the opportunity to call on the President, HE John Atta Mills. It was good to continue our conversation started when CBC hosted him and his team for the Ghana Investment Forum back in May in London.

During my meetings with the President and several Ministers two main themes running through the government’s programme became apparent.

1)
Managing the proceeds of the newly discovered petroleum and gas reserves for growth and development. The President is inviting international investors to work with his government to develop the infrastructure that will make growth happen.

One of the Key restraints on Ghana’s growth and development is access to power. The county’s current capacity is around 2000 Megawatts, Ghana needs to produce around 5000 a year to match the demand. The Government is looking for investors and technology to help produce power from the country’s gas, petroleum and other sources including renewable, and in its delivery to the public.

2)
The second theme of government policy is on agriculture. The Government is determined to enhance production and encourage commercial farming practices, to take Ghana from a net importer of food to an exporter in the shortest time possible.

Ghana, having built on the solid base of democratic principles and an open economy, is fast becoming the model of a modern African economy. I am glad to see Ghana aiming high; to achieve its goal of becoming a middle income country by 2015 the country will have to achieve growth of between 8 and 10% a year and attract international investors to help bridge the infrastructure gap.

My advice to investors everywhere is to use Ghana as the window to Africa, and join us at our Africa Investment Forum in February next year as we hold it in Ghana for the first time.

African agriculture solution to future food shortages

In recent comments from DEFRA about Food Security in the UK, it was suggested that global food production would have to double by 2050 to feed the growing global population. The Report went on to highlight the Role Genetically Modified crops are likely to play in increasing production as higher yield crops are needed to bring production up to the required level.

While GM will have a role play in the coming years, greater emphasis should be put on Africa as a potential global supplier.

The Current state of much of the agricultural production on the continent is still subsistence based, where families or small communities produce, in many cases, barely enough to live on, let alone a surplus to export.

Africa's potential to become the food basket of the world and supply a large percentage of the Global requirement is enormous, and CBC is working with private sector partners and governments to help increase investment into agriculture across the continent. An upturn in Production has the added benefits of increasing food security, reducing the threat of famine, creating jobs and wealth and driving up the general standard of living across Africa.

Presidents Optimistic about African Future

Over the Weekend I was pleased to catch President Obama’s speech to the Ghanaian Parliament. The US President focused on many issues that I and CBC believe are important for the future prosperity of the African Continent.

President Obama spoke of Africa’s future being in African hands, “aid is not an end in itself. The purpose of foreign assistance must be creating the conditions where it is no longer needed”. He went on to talk of a Continent not only rich in natural resources, but also entrepreneurs where “cell phone entrepreneurs to small farmers, have shown the capacity and commitment to create their own opportunities”
This optimistic view of Africa is shared by HE Paul Kagame who I met last week while he was in the UK to speak at our Africa Business Forum. He commented that the only thing holding Africa back now was the lack of a vibrant business-public sector relationship. “We have the people, we have the recourses and we have proven that investing in Africa gives you the highest possible returns available anywhere in the world”.

I believe that Africa is well positioned to emerge from the recession stronger than ever, and am glad to see that there is a general consensus around the world, after all the continent is still displaying growth rates above the global average. There is a new confidence both within and outside the continent in the African future.

Agriculture and Insurance in Africa

I am pleased to see that most African countries are moving agriculture to the top of their agenda. Through my interactions with the Heads of Governments in recent months, I have recognised a renewed interest in making Africa the food basket of the world.

This is the right time to take action on agriculture, if governments, the private sector and NGO’s work together a real impact can be made on the lives of those who merely ‘subsist’ across the whole African continent.

The CBC is contributing to this effort, connecting businesses and governments to form the right partnerships for swift progress to be made. In a recent programme report co-authored by Swiss Re (a CBC member) we highlighted an element of agricultural development that’s importance is too often forgotten; insurance. The programme makes suggestions as to how PPPs can be used to enhance agricultural production, and investment in agriculture, buy reducing against volatility assuring more stable returns. To read the report please visit cbcglobal.org

Africa to buck recessionary trend

While visiting East Africa last week I had the opportunity to meet with both President Museveni of Uganda and President Kagame of Rwanda to discuss the global financial crisis. It is apparent that there is a lot of innovative thinking going on in Africa right now, around how to resist the severe impact of the Global crisis and maintain the flow of FDI.

A Recent article in Time Magazine ‘Africa a Business Destination’ demonstrated this, reporting that while ‘Africa, usually the poorest performing region in the world economy, is now likely to be among the best-performing’. A consequence of not venturing into the derivatives markets or subprime lending as the west did has left the continent relatively immune to the Global Crisis. While recent the latest estimates for global growth this year look bleak, the same article reports that Africa will ‘buck the recessionary trend’ and grow over 3% this year.

New ideas are emerging regarding investment in Africa in sectors such as Agriculture, Infrastructure and ICT. It is a new reliance on business as cash rich countries such as China and the Middle East look for new markets in which to invest, that will fuel this growth. Even the Investment funds in the UK, Europe and the US are beginning to take serious notice of Africa as an investment destination, practically the agriculture sector.