EU hails Africa’s strong Economic progress over the last two decades

THE private sector holds the largest potential for generating jobs and growth and it is therefore essential to boost responsible private domestic and foreign investments in Africa.

According to communication from the European Commission to the European Parliament and European Council, investment in Africa shows an uneven picture, reflecting global uncertainty, with foreign direct investment flows to Africa fluctuating and not showing the strong upward trend required.

The report presented in Lusaka yesterday stated that South Africa, Kenya, Nigeria, Egypt and Morocco attracted collectively 58 per cent of total foreign direct investment in 2016 while less advanced and more fragile countries faced systematic challenges to attract private investment.

“Since 2016 we see a further broadening of Foreign Direct Investment beyond the extractive sector. As regards to EU investments in Africa, the EU is Africa’s biggest investor, with its member states holding approximately 40 per cent of Foreign Direct Investment stock worth Euro 291 billion in 2016. Africa’s strong Economic progress over the last two decades and inherent potential for the future mean that there is substantial opportunity for doing more. Demographic projections for Africa make it clear that it is also necessary to generate millions, especially for the youths entering the labour market,” the report read.

In the proposed course of action, the report stated that support to Africa to crowd in investments would be further boosted by using increasingly substantial amounts through blending and guarantees in order to leverage resources from capital markets with international, European and National institutions to derisk investments and facilitate access to finance.

It further stated that priority would go to value adding sectors with a high potential for sustainable job creation, notably for women and youth.

“Specific attention will also be paid to situations of fragility. Between 2014 and 2017, the EU have leveraged through blending operations approximately EUR35 billion. Since the launch of the External Investment plan and the creation of the European Union Fund for sustainable development in 2017, the EU mobilising funds expected to leverage EUR15 billion of investments through blending operations approximately EUR 35 billion,” according to the report.

The report stated that for a surge in private sector investment to have the biggest possible impact, the most promising value chains at national and regional level must be identified.

“To this end jobs and growth compacts are currently under discussion with most of our African countries partners in order to steer joint efforts around those value chains with the highest potential for job creation, seizing opportunities for manufacturing and processing, unlocking the huge potential of the green and blue economy, supporting transition to low carbon and climate resilient economies, exploiting the full potential of the digital transformation of the economy, in particular e-commerce  and data economy, and tackling the areas requiring reform in order to improve the business enabling environment,” reads the report.

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