Looking back, the World Economic Forum 2012 on Africa: Episode One
Under the theme “Delivering on Africa’s Promise”, the 23rd World Economic Forum (WEF) on Africa will provide an important platform for regional and global leaders from business, government and civil society to deepen the continent’s integration agenda and renew commitment to a sustainable path of growth and development. Here, we take highlight the key themes and topics of the World Economic Forum 2012.
The 22nd World Economic Forum
The 22nd World Economic Forum (WEF) took place in Addis Ababa, Ethiopia. The theme of last year’s Forum was ‘Shaping Africa’s Transformation.’
The Forum hosted over 700 delegates from around the world who discussed and debated some of the issues required to drive Africa’s growth agenda. With the ongoing financial turmoil in traditional investment markets such as the United States and Europe, investment and expansion into Africa was at the top of the Forum’s agenda.
The Forum highlighted the fact that there are huge opportunities for great investment returns in Africa and there was a specific focus on integrating and expanding Africa’s capital markets.
Infrastructure, agriculture and economic development in Africa
Given the crucial role that infrastructure and investment play in facilitating Africa’s transformation, delegates across the board acknowledged that, although there has been substantial progress, a lot more still needs to be done.
With a large portion of African farmers regarded as subsistence farmers, and with the continent boasting 60% of the world’s arable land, transformation of the African agricultural industry remains a priority.
With the implementation of NEPAD as a social and economic development platform for Africa, and through mechanisms such as the African Peer Review mechanism (which promotes transparency and accountability amongst governments) there has been a reduction in the perceived risk of doing business in Africa. The investment appetite has increased. Africa was the second highest recipient of FDI in 2010 and this trend is expected to continue.
Key focus: regional integration
The importance of regional integration was a key focus at the Forum. The dearth of financial institutions that are able to facilitate regional activities is a stumbling block in regional integration efforts.
The East African Community seems to be ahead of the game in terms of the free movement of goods and services. The biggest driver for East African integration was the realisation that differences in regional economies can be beneficial to the regional as a whole. For example, regional integration would mean that the innovation currently being produced in Rwanda could be utilised in a much bigger market; and the productive land in Tanzania could serve a much larger population. Successful regional integration requires an identification of comparative advantages in regional blocs, and the pooling large infrastructure projects.
The development of the Triple Free Trade Agreement and the Cape to Cairo Free Trade are examples of regional integration efforts. The Cape to Cairo Free Trade Zone aims to integrate 26 African economies. The linking of land-locked countries is essential in realising Africa’s full potential.
Infrastructure development in Africa
Discussions around infrastructure development formed a large portion of the Forum. The NEPAD Business Foundation in partnership with the WEF, held a private session to discuss three broad themes: funding and financing of infrastructure projects; new, innovative Public Private Partnership (PPP) models; and local economic developments impacted by infrastructure projects.
Under the Programme for Infrastructure Development for Africa (PIDA), 51 broad infrastructure projects have been identified. Of these, seven priority projects have been highlighted. Mobilising private sector support for these projects and finding innovative funding mechanisms is now a focus.
Innovation is booming
Innovation on the continent is booming. Africa has quantum leapt the rest of the world in terms of the use of innovative technology and Africa is leading the rest of the world in the delivery of technology solutions.
The discussions at last year’s WEF evidenced the changing perceptions of Africa as an investment destination.
Over the next two weeks KPMG Africa will cover a series of topics and discussions that will be central to the World Economic Forum (WEF) on Africa.