African leaders “have a duty to create the right climate for business” in Africa, Tanzanian President Jakaya Kikwete said September 28 in Washington. Kikwete described the private sector as the engine for economic growth and development across the continent and he called on his audience to “look forward,” not backward, toward a brighter economic future and a closer U.S.-Africa business and trade relationship.
Speaking at a luncheon held in his honor on the eve of the Corporate Council on Africa’s (CCA’s) Seventh Biennial U.S.-Africa Business Summit, which will be held in Washington, Kikwete said now is the time for business to position itself strategically for future opportunities in Africa. He readily acknowledged, however, that now, as the world begins to emerge from the global financial crisis, “it is not easy to convince skeptics” to invest enthusiastically in Africa.
African leaders need to create the right climate for business, he said. “It is our duty to keep projecting a better image of our continent as a whole and of each individual country. Our commitment to good governance, peace and security, to the rule of law and respect for contracts and the business environment as a whole must never be put into question.”
Kikwete reminded his listeners of the $698 million, five-year “compact” his country has been awarded by the United States through the U.S. Millennium Challenge Corporation (MCC) and said his only regret is that there are not more American companies competing for the business that will be created by the MCC agreement.
Kikwete spelled out five key sectors for business investment across Africa: infrastructure, the lack of which is strangling economic development across the region, he said; agriculture and agribusiness; natural resource development; tourism; and financial services, where a broader array of banking tools and programs is needed to help fuel long-term economic growth.
Africa open to China and the West
The media have not been very helpful, Kikwete said, as Africa makes its case as a great place for investment opportunities and business. “Sometimes I read what they say about us and wonder.”
Kikwete told his audience of business executives, entrepreneurs, U.S. government representatives, Africans and Africanists that oftentimes the media report that China is “gobbling up” Africa.
“We are realizing that it is precisely the subjective and selective stories that [the media] carry about Africa that keep many Western companies out of Africa,” he said. “Believe me, the field is wide open” for everyone, whether they be Chinese or Western businesses, to invest and do business in sub-Saharan Africa.
Cross-border trade is steadily increasing across sub-Saharan Africa, Kikwete said, and there are more and more trade links between Africa and Latin America and between Africa and Asia.
“South Africa, Kenya and India are important sources of investment for Tanzania, and while African investment and trade with Latin America remains slow, political will and the trend to grow remains undeniable,” he said.
Last investment frontier
Kikwete noted that the African Diaspora is “slowly shifting from simply making remittances to support their families back home into making their own investments or mobilizing other investments,” demonstrating, in his view, that “things are not as bad as [the media] sometimes portray the continent of Africa to be.”
He called Africa the world’s “last entrepreneurial and investment frontier” and said those who are not afraid to invest strategically can make good profits. He said some funds that invested in Africa’s telecommunications sector have enjoyed an annual return on their investment in excess of 35 percent.
Kikwete thanked his audience for what they are doing to promote closer U.S.-Africa business and trade ties, especially those companies that are already operating in Africa.
“It is your success,” he told those companies, “that will be a better selling point for the continent than simply listening to politicians like me.” He called on all companies “who are succeeding in Africa to spread the good word.”
Kikwete reminded his audience that between 2006 and 2008 Tanzania enjoyed an annual economic growth rate of 7.1 percent, and he expressed the hope that with increased trade and investment, Tanzania and the rest of the region can emerge from the financial crisis to enjoy such record economic growth rates again.
At least five African heads of state are expected to attend the CCA summit, which will showcase the latest trade and investment opportunities across Africa through more than 50 industry-specific sessions. More than 1,500 attendees are expected. The previous CCA summit was held in 2007 in Cape Town, South Africa.