Senior officials from the United States, Germany and the United Kingdom have pledged increased investor and trade interest in Africa, despite challenges surrounding COVID-19.
Representatives from the three countries shared these sentiments in the recently ended annual conference of the African Private Equity and Venture Capital Association (AVCA).
A spotlight on fundraising in Africa shows a decline due to the effect of the COVID-19 pandemic. In a private equity tracker data developed by African Private Equity and Venture Capital Association AVCA, and released in March, Africa-focused private equity fundraising dropped to US$1.2 billion in final closes from US$3.9 billion in 2019.
Thus, these assurances and/or pledges by the three countries when realized will help trickle investments into African economies.
Convened virtually, the event highlighted bottlenecks associated with regulatory and policy changes affecting private equity in Africa. The panel also discussed the impact of international public policy on trade and foreign direct investment in Africa’s private sector.
The panel constituted UK Trade Commission for Africa, Emma Wade-Smith; David Marchick, Chief Operating Officer of the US International Development Finance Corporation; Tania Rodiger-Vorwerk, Germany’s Director of Private Sector, Trade, Employment and Digital Technologies; and Nigerian Minister of Industry, Trade and Investment, Otunba Richard, Adeniyi Adebayo.
Officials pledge support
Marchick remarked that the US was in full support of Africa’s production capacity, especially, when it involves vaccines. He indicated that this was necessary since the issue with vaccines has become a hot-button issue in the light of the COVID-19 pandemic.
“We average somewhere between $4 billion to $5 billion of investment a year. We want to increase that. Somewhere a little north of 20% of our allocation has been going to Africa, which we want to increase,” Marchick asserted.
“So, if you take $5 billion a year, and 20% of that, that is a billion. I would like to see that substantially increased in the next few years in climate, in health, in technology and in infrastructure.”
David Marchick, Chief Operating Officer of the US International Development Finance Corporation
Wade-Smith intimated that Africa was surely targeted for trade by UK. “We are working really closely with governments to create that enabling environment, spotting whether there might be regulations that need updating or implementing more concretely and regularly.
“I am really working with investment promotion agencies across the continent to help to create the right projects in the right way that will inspire those investors to come flooding back into Africa,” she said.
Among officials in Africa, Adebayo indicated that Nigeria was “doing quite a lot” to facilitate and improve investment prospects. He further cited the country’s newly launched Presidential Enabling Business Environment Council, which has been driving reforms such as those related to the energy industry. The government of Africa’s largest economy is also digitalizing trademarks and patents.
“We want to go beyond just exporting crude oil and agricultural products. What we intend to do is we try to set up special agro-industrial processing zones, the idea being to add value to our products before exporting. We invite investors to come and set up processing companies in Nigeria,” Adebayo stated.
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