The Minister of Trade and Industry, Kobina Tahir Hammond, has emphasised the importance of continuous collaboration to stimulate investment flows into the African continent.
According to him, while there is ample evidence indicating the crucial role of investment in economic transformation, the current level of foreign direct investment (FDI) inflow in Africa falls short of expectations.
The United Nations Conference on Trade and Development (UNCTAD) reported that in 2022 foreign direct investment inflows into Africa amounted to US$44billion, representing only 3.5 percent of global FDI inflows. Despite the general decline of 12 percent in global FDI, Africa suffered the most – experiencing a 44 percent drop in FDI compared to 2021 figures.
“It is therefore imperative that we keep conversations alive which aim to optimise FDI flows to the continent and leverage all available tools at our disposal, including initiatives like the African Continental Free Trade Area (AfCFTA) and its investment protocol,” Mr. Hammond said at the IPAs Capacity Building Conference in Accra.
For him, strengthening collaboration and promoting investment collectively can work toward reversing the years of negative perception and low investment inflows on the continent.
Shaping the future of investment
Touching on the conference, conducted under the theme ‘Empowering African IPAs to foster investments for accelerating AfCFTA implementation’, the trade minister remarked that the event presented a unique opportunity for mutual learning.
“Your insights are invaluable, and your contributions will influence the policies and strategies which drive investment across our nations… and as we embark on these discussions, remember that the success of our continent hinges on our collective determination and action. Each one of you represents a crucial part of the solution, and your engagement in this conference is a testament to your commitment to the future of Africa,” he stated.
He urged participants to forge ahead with the knowledge that their actions can reshape the continent’s course: “Let us work together to turn our shared aspirations into reality and create a thriving Africa, where industry is the engine of progress and opportunities abound for all our citizens”.
Harmonising investments
Navigating Africa’s investment landscape presents challenges due to disparities and the continent’s diverse nature, from infrastructure deficits and regulatory complexities to accessing skilled labour. These, including the perceived risks of inadequate legal protections, often deter potential investors.
Recognising these hurdles, Heads of State and Government at the African Union adopted the groundbreaking AfCFTA Protocol on Investment (the Protocol) in February 2023. This initiative aims to harmonise investment regulations across the continent and create a more enticing and predictable investment environment in Africa.
“Its primary objective is to promote, facilitate, protect and retain investments that foster sustainable development,” the Secretary-General of AfCFTA, Wamkele Mene, stated during his virtual address.
“The Protocol,” he added, “endeavours to create a cohesive framework that streamlines the diverse and often disparate rules governing investments in different African countries. Such alignment is pivotal in making Africa’s business environment more friendly for investments, thereby catalysing economic growth and development across the continent.”
On his part, Chief Executive Officer (CEO) Ghana Investment Promotion Centre (GIPC), Yofi Grant, said Africa is characterised by richness in natural resources and human capital. These vast resources and demographic dividends present investors with business opportunities in various industries, and a large and growing pool of potential workers and consumers, he stated, adding that: “With the right investment strategies and partnerships, investors and businesses will not only benefit from Africa’s abundant resources but also contribute to its sustainable development and economic prosperity”.
