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{{West Africa African countries face a common set of challenges, like industrialisation, job creation, and building social safety nets among others which need to be addressed, according to development experts.}}

They say Africa needs to focus on industrialisation as the backbone of structural transformation However, the continent’s industrialisation plans will not take off until infrastructure is fixed.

It’s against this background that African finance, planning and economic development ministers met recently in Abuja at the seventh Joint Annual Meetings of the Economic Commission for Africa to discuss the way forward.

The ministers resolved to make the necessary effort to increase productivity for investment and growth rate of the agricultural, manufacturing and modern services sectors in order to boost employment on the continent.

“The structural transformation of African economies must continue be a core priority and to close the poverty gap, industrialisation must be key to transformation,” Carlos Lopez, the UN under Secretary General and Executive Secretary said.

Nigerian President Goodluck Jonathan who was the chief guest said that African countries should work together in sourcing financing options for regional infrastructure projects and urged cabinet colleagues in trade and industry, to implement plans on industrialisation and trade integration.

They also pledged to address the problem of securing long-term financing for investing in manufacturing, including by reviving development banking and re-adjusting financial markets to make them more supportive of Africa’s industrialization efforts.

According to the ministers, industrialisation is one of the most viable paths to employment-generating growth and development” necessary for the structural transformation of the continent, the ministers declared.

While Africa’s growth rate has been among the highest in the world recently, African policy makers are concerned that the growth has not been inclusive while inequality has widened considerably.

In order to accelerate employment growth, large sectors with high employment elasticity need to constitute the main engine of growth, according to the ministers.

“We will also encourage the inflow of quality foreign direct investment which contributes to the expansion of domestic production, the diversification of exports, the transfer of technology, the upgrading of local skills, the development of local innovation, and the deepening of economic linkages,” the ministers’ joint statement reads in part.

Dr. Nkosazana Dlamini-Zuma, the chairperson, African Union Commission acknowledged that Africa’s economies have come a long way since the difficult and challenging 1980s and 1990s.

She said during that period, most of economies were saddled with high foreign debts, and burdened by inflation. The overall GDP growth of our economies was very low at about 2% per annum.

“The continent has turned the corner foreign debts are in decline, inflation is under control in most countries, and foreign direct investments are positively flowing back onto the continent,” she said.

Africa’s central bank governors also focused on structural transformation on the continent, promising to support inclusive and transformative growth policies and dynamic initiatives designed to actualize Africa’s industrialization.

{{Oil giant British Petroleum has signed concessions with the Mogadishu authorities to explore oil and gas in Somalia.}}

An intelligence brief released on Monday indicated that Somalia’s coastal waters in the Indian Ocean could be having some of the world’s largest oil deposits.

The statement issued by Mr David Golman, an intelligence news analyst, pointed to reports showing existence of large oil deposits in Somalia, which could change the global market dynamics.

“Intelligence collected by Strategic Intelligence shows Somalia’s Puntland province has 10 billion barrels of oil reserves, making it one of the top 20 countries holding oil,” it added.

Further, the brief says that a company that drilled wells in Puntland (a semi-autonomous state in north-eastern Somalia) estimates 4 billion barrels – worth about $500 billion in today’s prices – in its two discoveries in Somalia.

If drilled, it added, Somali oil would beat countries like Nigeria and Kuwait, to make the Horn of Africa state the 7th largest producer in the world.

On Saturday, Dr Hussein Ali Ahmed, the Managing Director of the Somali Petroleum Corporation, told the media that Britain would send ships to explore oil in the Somali waters in the Indian Ocean

{{Rebel groups}}

“Somalia is one of the countries in Africa’s eastern region with large, untapped oil deposits,” said the oil agency director.

He expressed optimism that the exploration ships from Britain would arrive in Somalia soon.

Dr Ahmed told reporters that high-powered fuel companies such as Conoco, Shell and Total, had approached Mogadishu for the renewal of oil exploration operations.

“Many entities were engaged in the exploration of oil in Somalia, but abandoned the work due to the collapse of the central government, and following pressure from rebel groups in 1991,” remarked Dr Ahmed.

In October 2013, the Somali Government approved a deal with the UK-based firm Soma Oil and Gas Exploration to exploit mineral resources on its vast coastline.

As per a press release, the British company will explore marine and land areas, reaching up to 60,000 square kilometres.

Mr Michael Howard, a former UK Home Secretary, signed the accord in Mogadishu as non-executive chairman of Soma Oil and Gas Exploration.

NMG

{{A panel of business policy makers, entrepreneurs and bankers on Friday met during the World Bank-IMF Spring Meetings to discuss ways to boost the creation of large African businesses using homegrown investments.}}

Moderator of the panel, Hubert Danso, Chief Executive Officer and Vice Chairman of Africa Investor (Ai) Group, opened the discussion.

Based on their policies and their experiences managing private companies and lending organizations, Danso asked panelists to share their ideas for how best to successfully create large firms.

The panel, made up of policy facilitators and business growth and private sector practitioners, included Jean Philippe Prosper, IFC Vice President for Sub-Saharan Africa, Latin America and the Caribbean; Sidi Ould Tah, Minister of Economic Affairs and Development for Mauritania, Dorothé Cossi Sossa, Secrétaire Permanent de l’OHADA; Admassu Tadesse, President & CEO of PTA Bank; and Villa Kulild, Director General of Norad.

Jean Philippe Prosper got the ball rolling by citing the prevailing realities impacting Africa’s needs and the available opportunities to address them.

“There are currently few large African companies to increase employment opportunities and meet the continent’s huge demand for jobs, which is an overwhelming social challenge that seems to be the responsibility of everyone and anyone,” Prosper said.

“Reducing trade barriers and cutting trade costs in Africa is attracting investors to the region,” he added. “In the middle of these demands and opportunities, creating large firms in Africa is the way to go for the private sector in Africa.”

Sidi Ould Tah, Minister of Economic Affairs and Development for Mauritania, cited the enormous home-based skills that Mauritania has built over the years in managing railway transport, skills from which Africa can benefit.

“Railways are the cheapest and safest ways of transporting heavy cargo goods and large populations of traders and passengers across the continent,” he said. “Railways can contribute to Africa’s integration while accruing profits for investors and stimulating the marketing of agricultural and artisanal produce.”

According to Ould Tah, Mauritania has enormous skills in railway but its market of rail users is too small and not sufficient to optimize profit. “This is where transnational partnerships and investment on railways becomes important,” he said.

Admassu Tadesse, President and CEO of PTA Bank, alluded to the importance of the home-grown nature of African companies such as his company the Preferential Trade Area Bank, commonly known as PTA, a trade and development financial institution in Africa and the financial arm of COMESA, but open to non-COMESA States and other institutional shareholders.

Tadesse said his “company is currently a solution to addressing the market size challenge for the financial service sector”, a challenge which Mauritania is currently facing for the rail sector. He further noted that “when companies are home grown their decision turnaround time becomes very cost effective.”

Villa Kulild, Director General of the Norwegian Agency for Development Cooperation (Norad), stressed the importance of countries’ macroeconomic stability and the international competitiveness capacity of large African firms as two important requirements for profitability and sustainability.

Dorothé Cossi Sossa, Secrétaire Permanent de l’OHADA, stressed the importance of compliance and due diligence that private and public investors in Africa should implement in order to benefit from the services of OHADA. OHADA is a system of business laws and implementing institutions adopted by 17 West and Central African nations.

Overall, panelists agreed that the demand for jobs, growth and ending poverty in Africa are as great as the opportunities for addressing them through private investments that are large, profitable, responsible and can produce widespread benefits in terms of economies of scale for themselves and benefits of scale for their populations.

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