5 January 2004
An Australian report into trade and investment opportunities in sub-Saharan Africa has given the region a strong vote of confidence.
The report, African Renewal: Business Opportunities in South Africa, Botswana, Mozambique, Kenya and Uganda, says the five countries “stand out as having good economic growth prospects among the economies of sub-Saharan Africa”, compare favourably to east Asia in terms of governance and growth, and therefore “warrant a closer look”.
South Africa and Botswana, in particular, are seen as having higher incomes and therefore as providing the greatest short- to medium-term opportunities for investment.
Drawn up by Australia’s Economic Analytical Unit, the report aims to help Australian businesses take advantage of emerging opportunities in the region.
The five economies account for 76% of Australia’s trade and investment in sub-Saharan Africa, while South Africa alone receives 64% of its investment in the region. Australia’s largest focus for trade and investment worldwide is southeast Asia.
“We are already taking this market (sub-Saharan Africa) very seriously”, Australian High Commissioner Ian Wilcock was quoted by Business Day as saying at the launch of the report in Johannesburg this month.
“We don’t pretend there are no problems [in the region]”, Wilcock said, referring to HIV/Aids, crime and limited human capital, among the other deterrents mentioned in the report.
“But the essential message is that Africa is open to business; it is well worth Australian business taking a look.”
The report highlights the favourable business environment in sub-Saharan Africa, saying “international business people generally find their counterparts in these economies professional, accessible and courteous.”
It found few business regulations that actively inhibited investment, noting that foreigners can invest in most sectors and that authorities generally allow for 100% foreign ownership.
The South African mining industry, as well as that in Botswana, is seen as “strong”. The report highlights South Africa’s mining charter, stating that it “means new miners establishing in South Africa need to form a joint venture with a black mining partner”.
Among the major investment prospects listed in the report are mining, agribusiness and related goods and services, infrastructure, education, financial services, tourism and information communication technologies.
According to the report, South Africa, Botswana and Mozambique encourage minerals processing industries, and opportunities exist in the “tapped and untapped” mineral wealth of the countries.
In terms of infrastructure, the report says all five governments prioritise the provision of infrastructure, and as such opportunities exist in developing roads, rail, energy, water, ports and telecommunications.
Shortages of skilled and technically trained labour in the region presents “one of the best” opportunities for Australian educators. Opportunities for investment also exist in banking technology and advanced financial products.
The report highlights export subsidies as among several non-tariff barriers to trade. Others included “opaque customs procedures” and import/export licensing. The report said that tariffs in the region were falling, but were still relatively high.