AZHAR SUKRI, Kuala Lumpur | Friday 1.25pm
INVESTMENTS in Africa, contrary to popular perceptions, have a track record of offering high rates of return, the programme manager of a World Bank-sponsored trade promotion forum said on Friday.
”One of the fundamental reasons why Africa and Asia as businesses have not been strong has been an ignorance of the opportunities on both sides,” said Ken Kwaku, programme manager of Promote Africa, a division of the Multilateral Investment Guarantee Agency — the insurance arm of the World Bank.
Kwaku said sub-Saharan Africa has provided some of the highest rates of return on foreign direct investment of any region in the world. ”Between 1983 and 1997 there was only one year, 1986, when the rate of return on United States investments, after tax, was below 10%,” Kwaku said. ”From 1990 onwards it has averaged 29%, higher than any other region.”
He said several countries in sub-Saharan Africa have already liberalised their financial markets and have made trade much easier. Kwaku pointed to Mozambique, which has cut the number of steps required to obtain an import licence down to five from 96.
”We are not a capital-deficient region,” Kwaku said. Namibian-listed companies last year had to invest around $100 million overseas ”because they could not find suitable investments within the country”.
Several Malaysian companies have already invested in Africa. State oil company Petroliam Nasional Bhd (Petronas) is the controlling shareholder of SA’s Energy Africa Ltd, an oil and gas exploration and production group.
Malaysia’s largest public listed company, Telekom Malaysia Bhd, and US-based SBC Communications have a 30% stake in the partially privatised Telkom (South Africa). — Reuters