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Monday, 10 March 2014 18:25

New Business Strategy Needed for Africa

By Baboucarr Camara

BANJUL, Gambia, March 10, 2014 (The Daily Observer) -- The deputy chairperson of the African Union Commission has proposed for Africa to adopt a new business strategy that will address the issue of trade imbalances as well as create more export opportunities for the continent.

Dr. Erastus Mwencha was speaking to journalists at a press conference held at the WOW Hotel and Convention Center in the Barkirkoy district of Istanbul at the end of a two-day Turkey-Africa Women Entrepreneurs' Business Summit in the transcontinental country.

The Kenyan-born, who stressed that the new trade deal that the AU Commission signed with the Confederation of Turkish Businessmen and Industrialists (TUSKON) will be of mutual interest and benefit to both parties, proposed that it is important for Africa's trade partners to come and grow on "our lands instead of selling our raw materials cheaply", something, he added, will help to bridge the gap of trade imbalance.

Speaking further, Dr. Mwencha, who served as the former secretary general of the Common Market for Eastern and Southern Africa, dismissed a suggestion the new trade agreement with Turkey means Africa is now abandoning its traditional European partners. He made it clear that Turkey is a gateway for African products to get into the European market.

The AU top official opined that the reason why most African institutions died in the past was as a result of them confining themselves to operate within their countries alone, but noted that the birth of the Turkey-Africa Business Investment Council (TABIC) will go a long way in increasing the capacity of African businesses.

According to the AU deputy chairperson, the next Europe-Africa summit in Brussels, Belgium will give the continent the opportunity to address the issue of illegal migration to Europe. He pointed out that the two partners have not developed each other the right way that could've put a stop to the economic migration to Europe.

Flashback of Africa-Turkey relations

Commenting further, Dr. Mwencha disclosed that Africa and Turkey have developed a strategic partnership that creates a framework for cooperation at all levels. According to him, the first Turkey-Africa Summit was held in Istanbul in 2008 while the 2nd will be held in Malabo, Equatorial Guinea in November, this year.

He noted that Africa has delivered strong economic growth over the last decade and is becoming an increasingly attractive hub for foreign investors as a result of sound macro-economic policies, political and social reforms that the continent has been pursuing in the last decade. This, he pointed out, have resulted in a much improved business environment conducive for foreign direct investment.

According to him, Africa has put priority in developing critical social and physical infrastructure across the continent in order to reduce the cost of doing business, and with the world's "youngest and third largest population", it is not only a significant reservoir of human resources ready for active engagement in the continental and global economy, but also a vast potential market for both global traders and investors.

"In addition, it is reported that about half of Africa's one billion people will live in cities by 2030 and the continent's top 18 cities will have a combined spending power of $1.3 trillion. Africa has for a long time been a trade partner of Turkey. We, at the African Union believe that the prevailing commercial ties between Turkey and African countries should be strengthened and assume a new momentum of growth," Dr. Mwencha added.

Future invest opportunities

According to the deputy AU chairperson, a lot more investment opportunities still await Turkish investors in Africa. Among these sectors, he indicated, includes that of agriculture, where 60% of the world's total uncultivated, arable land is in Africa. He added that as the world's population increases rapidly, global agricultural production must rise to feed these growing numbers in the textile industry and commodities such as tea and coffee.

In the area of tourism, Dr Mwencha noted that it is expected that in the year 2014, 50 million tourists will arrive in Africa. This, he said, will provide several opportunities in Africa's tourism sector such as luxury safari lodges and retreats. He added that Africa accounts for 10 percent of global crude-oil reserves, 75 percent of cobalt, 47 percent of diamond, 80 percent of platinum, 40 percent of chrome, 38 percent of uranium, 32 percent of gold and 28 percent of manganese.

He further disclosed that the African Union Programme for Infrastructural Development (PIDA) is gaining momentum, but warned that there is a need for greater engagement from all stakeholders including the private sector as the continent requires about $93 billion annually to cover its infrastructural needs.

He concluded that information technology is also one of the fastest growing and most promising sectors in the continent as there are well over 1 billion mobile phones in Africa and the use of computer is rapidly expanding.

"A whole range of business opportunities exist from e-commerce, international call centers, mobile services to assembly and/or manufacturing. For a win-win partnership, we welcome all those who wish to support Africa's development priorities, aiming at the processing and adding value to raw materials, regional integration, capacity building and human resource development," he concluded.

 

 
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