Ethiopia / Expert Group Meeting Industrial Investment Policies in Africa

 

ADDIS ABABA, Ethiopia, July 7, 2009/African Press Organization (APO)/ — Invitation to representatives of the media

 

 

WHEN:                      8 – 9 July 2009:

 

WHERE:                    Headquarters of the African Union in Addis Ababa, Ethiopia.

 

WHO:                            Organized by the African Union (AU) in collaboration with the United Nations Industrial Development Organization (UNIDO)

 
 

WHY                                       In order to promote and enhance regional and continental integrations, the investment climate of member states should be made favorable to industrial investors through a harmonized set of investment policies. Investment Promotion Agencies tend to concentrate efforts on the promotion of their national markets which manifests in the extensive use of incentives to compete with other economies in the region. This incentive-based competition, with its attendant effects on national resources for development, is not sustainable. There is need for more coherent and coordinated approaches of promoting regions as investment locations. In this connection, it is necessary to recognize and engage the Regional Economic Communities (RECs) as important stakeholders in the investment promotion and industrialization processes in Africa.

 

 

Objectives:                           The objective of the Expert Group Meeting (EGM) is to deliberate on the means for achieving a coordinated approach that will lead to the evolvement of harmonized continental and regional investment policies and strategies that will attract dedicated channels of finance for industrial development.

 

The specific objectives of the Meeting are:

 

To promote dialogue among the member states of the African Union on the role and contribution of investment promotion in the industrialization and development of African economies.

To promote partnerships among African investment promotion stakeholders at the national and regional levels:

to facilitate the needed shift from the promotion of national markets through incentive-based competition with its negative effects on national budgets to more coherent and coordinated approaches of promoting regions as investment locations.

to evolve of a common shared vision and to build consensus on how to streamline and harmonize national and regional industrial policies in support of the regional integration process.

To generate discussions on strategies to be adopted by financial institutions to help address the challenges to Africa’s industrialization strategies in the context of the global financial crisis

To integrate the AfrIPANet Programme in the Plan of Action for the Accelerated Industrial Development of Africa, in furtherance of the decision taken at the 18th Conference of African Ministers of Industry (CAMI) in October 2008. To support the AfrIPANet platform and to use the opportunity of that platform’s reach out to the investment promotion stakeholders in Africa to generate and disseminate new ideas about investment promotion policies and strategies.

To facilitate the establishment of direct linkages between the information that will emanate from the Investment Monitoring Platform and policy formulation and harmonization at national and regional levels.

 

 

Expected outcomes:

 

The meeting is expected to:

Agree on the modalities for implementing the Plan of Action for the Accelerated Industrial Development of Africa, as endorsed at the 18th Conference of the African Union held from 27-28 October 2008 in Durban, South Africa.

Establish implementation mechanisms to ensure increased FDI inflows to support industrial development through linkages with the domestic economy.

Agree on mechanisms that will drive the harmonization of industrial investment policies, regional integration and development.

Discuss strategies for fund mobilization to support the Plan of Action for the Accelerated Industrial Development of Africa as a means for addressing the challenges posed by the present financial crisis. 

 

Participants:  – The Meeting will bring together African stakeholders at the country and regional levels to agree on a set of activities over the next four years 2009-2012 that will drive Africa’s industrialization agenda.  The Experts will include :

Representatives from the United Nations Industrial Development Organization (UNIDO);

Ministries of Industries/Investments of Member States;

Regional Economic Communities (RECs);

Investment Promotion Agencies;

Private sector associations;

Private sector Chief Executive Officers (CEOs);

Financial institutions;

The NEPAD Secretariat;

UN Economic Commission for Africa (ECA);

The African Development Bank (ADB);

The World Bank;

African Research Institutions and other interested partners.                                  

 

 
 

Background:           Africa with all its rich endowment of natural and mineral resources is the least industrialized continent of the world. Decades after independence, the continent still depends on the export of raw materials to the industrialized world, which are processed and resold to Africa at much higher prices. The lack of industrialization of the continent may be attributed to numerous factors, among them inappropriate industrial investment policies, problems associated with infrastructure, market size and lack of technology. Another dimension of the problem is the lack of information to support investment policy formulation due to weak partnership between the investment promotion stakeholders in both the public and private sector which impacts negatively on evolvement of a common shared vision. More importantly, it is the lack of dynamism in investment promotion strategy design which is attributable to the fact that a constant and sustained outreach to the private sector is not given deserved priority.

 

In an attempt to address this problem, a few African countries have used a variety of industrial investment policies as key instruments for expanding their industrial bases. In most cases, these policies seek to support the participation of domestic firms in increasing local value addition. Recent policies take advantage of the coordinating role of government through policies that promote exports, output growth and investment, higher productivity, and greater competitiveness. In terms of prospects, an increase in high commodity prices which is likely to follow the global crisis and continued liberalization of national markets are likely to attract investment to the primary and services sectors of African economies. Furthermore, the region’s market size, measured by total population and purchasing power, is growing.

 

This situation is further likely to be aggravated by the emerging trends in the global financial markets which could be a constraining factor on financial institutions worldwide as sources of investment capital. This is with particular reference to their ability to raise investment capital for on-lending to other financial institutions in Africa to support investment projects in both the private and public sectors. In this connection, FDI inflows from the private sector in Africa will be affected and it will also impact negatively on the ability of African governments to continue with the needed reforms in macro-economic and business regulatory framework, particularly provision of infrastructure and other support for the private sector.

 

The prospects for increased industrial investment in many sectors of the economies of Africa will depend on improvements in Africa’s industrial profile and dynamism with which it is able to shift from a low value added to semi-industrial basis, given the available local markets, market access initiatives as well as improvements in the business climate. In order for Africa to attain uniform and sustained growth and development, the continent must not only harmonize its industrial investment policies to encourage both foreign and local investments but must also ensure that the domestic sector attains the level of sophistication  and quality to expand and grow. To be able to achieve this, it is necessary for the domestic sector to use the huge potential of the FDI sector, TNCs and other large companies to improve the competitiveness of the domestic sector and to link them into the value chains of the FDI companies and other large scale businesses. 

 

CONTACTS:

 

Department of Trade and Industry AUC

 

Mr. Hussein Hassan Hussein,

Head of Industry Division, Africa Union Commission,

P.O. Box 3243, Addis Ababa, Ethiopia.

Tel: +251 1 Fax: +251 11 551 046.

E-mail: husseinh@africa-union.org

 

Mr. Ayoup Zaid Elrashdi,

Senior Officer for Industry, Africa Union Commission,

 P.O. Box 3243, Addis Ababa, Ethiopia.

Tel: +251 11 551 0917 Ext 365.

Fax: +251 11 551 046.

E-mail: ayoupzaid@africa-union.org

 

 

Division of Communication and Information (DCI)

Esther Azaa Tankou

Information Officer African Union Commission

P.O. Box 3243, Addis Ababa, Ethiopia

Tel. Off. (+251) 11 551 7700 Ext. 234

Fax: (+251) 11 551 1299

E-mail: yamboue@africa-union.org

 

 

SOURCE 

African Union Commission (AUC)