Pains and Gains of WEFA

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The World Economic Forum on Africa held in Nigeria between Wednesday, May 7 and Friday, May 9, provided an investment platform for Nigeria in particular and Africa in general. Nigeria and Africa secured a fresh investment commitment of $68 billion during the three-day global event

|  By Vincent Nzemeke  |  May 26, 2014 @ 01:00 GMT

THE 2014 edition of the World Economic Forum on Africa, WEFA, hosted under the theme: ‘Forging Inclusive Growth, Creating Jobs’ has, by all means, created avenues for African countries to develop their economies and bond together for the benefit of the continent. The forum, which held for the first time in a West African country, recognised South Africa, Kenya and Nigeria as leading African economies that should work together for the development of the continent.

One of the delegates that muted the idea was Mthuli Ncube, chief economist, African Development Bank, AfDB.  During one of the panel discussions which focused on ‘driving competitiveness through cooperation, integration and economic growth’, Ncube said despite the fact that Africa was growing economically, inequalities have remained high in the continent. He, therefore, called on African countries to cooperate in order to tackle the challenge effectively. “These four economies- Nigeria, Kenya, South Africa and Egypt, when they come up, must inter tie and must work together to drive Africa’s economy,” he said.

On the issue of poverty and uneven distribution of wealth, Aliko Dangote, Africa’s richest man and president of the Dangote group, said Africans should invest in their countries in order to eradicate poverty. According to him, the problem of poverty and lack of development on the continent had a lot to do with activities of Africans who denied the continent of its resources by taking them to other parts of the globe.

He said: “The challenge is that some Africans, rather than keeping their money in Africa, take such money away to other parts of the world. Many are not investing our money in Africa. When such money is taken out, Africa loses.”

As a proof of his readiness to help fight the scourge of poverty in the continent, Dangote said he would invest $16 billion in various parts of the continent in the next four years.  “When you import goods, you import poverty and you export jobs to other parts of the globe where such goods are produced,” Dangote said.

The forum similarly proffered solutions on how to improve investment competitiveness in Nigeria. Ogbonna Ukuku, country director of International Institute for Investment Promotion, IIIP, said policy frameworks must be put in place to attract venture capitals necessary for growth and sustainability. Noting that the present credit regime was awkward, Ukuku who is also an investment analyst, cited investment policy regimes in the United Kingdom and the United States to support his position. He said a legislative instrument that would correct the lapses and encourage banks to provide credit to business owners on longer terms and more affordable basis must be put in place.

He said: “In countries that Nigeria looks up to such as the UK and the US, there were legislations as far back as the 1850s to actually support venture capital as a means of creating access to finance. Now in our own case, you cannot talk about getting loan without talking about the initial capital, the initial equity that you need to get to where loans will come to you.

“Now, we have to solve the first problem which is the first issue and that is having a venture capital system that works. We also need Angel funds. What we do now is like family members or friends coming together to pull up that initial venture capital.”

For President Goodluck Jonathan and Ngozi Okonjo-Iweala, coordinating minister of the economy and minister of finance, the successful hosting of the forum by Nigeria was a giant leap in the country’s international ratings. It was a proof that despite its many challenges, the country still has a place in the global economy.

Other than helping Nigeria cement its place in global business and economy, hosting the 2014 WEFA also afforded the delegates an opportunity to deliberate on how to develop the Nigerian economy.  The debates and discussions at various sessions of the forum clearly showed that Nigeria has huge economic potentials that, if well explored, would improve the lives of its citizens.

At the forum’s opening session, President Jonathan told the delegates that his administration was making efforts to sustain the growth of the Nigerian economy. Jonathan also told the investing community that one of the objectives of the transformation agenda of his administration is to bridge the inequality gap and facilitate inclusive growth necessary to leverage the gains of Nigeria’s economic transformation and that the challenges of insecurity would be frontally addressed to improve the enabling environment for investments.

In line with the theme of the event, Jonathan further assured delegates that the Nigerian government would support the ongoing job creation programmes with adequate policies that would ensure that the country’s army of unemployed youths were properly engaged.

He explained that government’s policies were focused on a number of priority sectors which have high job-creating potentials, such as agriculture, manufacturing, housing and construction and the services sectors.

“For us in Nigeria, job creation has been the main focus of our ongoing transformation agenda which is our programme to modernise and diversify the Nigerian economy. Job creation is one of the concerns that keep me up at night, and it has been the main theme of our federal government budget in recent years. We recognise that the private sector will be the engine of growth and job-creation” the president said.

Appreciating the critical role of the private sector in the job creation drive, Jonathan pointed out that to attract the needed investment support from private business owners, the federal government had been putting in place the necessary conditions to support private sector-led economic growth and job creation.

He listed the components of these measures as the creation of a stable macroeconomic environment in the form of low inflation, social protection, stable exchange rates and investment in critical infrastructure such as roads, railways, power as well as investing in the development of skills amongst others.

During one of the sessions on the final day, Okonjo-Iweala, also informed delegates that the government was putting everything in place to ensure that private business owners have a conducive environment in which to operate. She added that efforts were also being made to ensure the protection of the unemployed and vulnerable youths in such a way that their basic needs would be met by addressing the socio-economic imbalances in the system.

Although the event was almost overshadowed by the global protest against the abduction of more than 200 secondary school girls in Chibok, Borno State, by members of the deadly Boko Haram sect, the event was, by and large, a huge success. While the benefits of the three-day forum cannot be played down, the challenges of hosting it can also not be ignored. Eyebrows were raised when the government made an official announcement that schools, offices and government offices would be shut down throughout the duration of the summit.

As a result, fierce looking soldiers were deployed to major parts of the city. The security checkpoints put in place throughout the duration of the forum meant difficult times for motorists and other residents of the city who could not easily move around. Residents in Nyanya, Suleja, Gwagwalada, Masaka and other satellite towns were mostly affected as they spent hours on the road before getting into the main town.

But seeing how much Nigeria benefitted from hosting the economic forum, the difficulties encountered by residents and visitors to Abuja during the period may, as well, be worth it. Commending Nigeria for the successful hosting of the event, Phillip Rosler, managing director, WEFA, disclosed that a fresh investment commitment of $68bn had been secured for African countries at the three-Day global event.

Rosler, who gave the hint during the closing media briefing, said the amount would be invested in key sectors of African economies such as education, health, infrastructure and agriculture, among others. He described Nigeria’s hosting of the event as one of the most successful in the history of the organisation, adding that despite the security challenges in the country, the event recorded an impressive turnout. For instance, he said, within the three-day span of the Forum, 48,000 articles were written on it, pointing out that the figure is three times higher than what was reported in the last edition.

Rosler said: “It was a very successful World Economic Forum on Africa. We have more than 48,000 articles from these three days in Nigeria in comparison to last year which was 16,000 and this is more than three times higher than last year. This is a proof that Africa is very important to the people of the world.

“We not only want to create a future of interest but we are committed to improving the state of Africa. To put all the monies together which was committed by the Chinese and others, we have about $68bn in the next years for Africa and the African people for specific projects like infrastructure, energy, health care and, very importantly, education.”

Rosler also explained that through the international event, the Nigerian government had been able to secure a huge solidarity around the world in the fight against terrorism, adding that the global community “will not allow the terrorists to dictate the African agenda and that is the real message from the WEFA.”

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