Africa on different growth trajectory: Tharman

Singapore

AFRICA is on a trajectory that is different and on a higher incline compared to most regions in the next 20 years, providing opportunities for Singapore businesses, said Senior Minister Tharman Shanmugaratnam on Monday.

Speaking on a panel at the Africa Singapore Business Forum (ASBF) organised by Enterprise Singapore on Monday, Mr Tharman said "Africa's growth profile, consumption profile, and scope for investments is on a very different trajectory" compared with rich, large, and slow growth markets which already have dominant corporate players.

This "open environment" has been a boon not only for larger Singaporean companies which have established themselves there, but also smaller companies. "It's not just the macroeconomics, it's not just the demographics which is obviously in Africa's favour. It's the fact that it's a pretty open field," said Mr Tharman, adding that this "plays to the advantage" of Singapore companies.

He cited opportunities in the area of logistics, customs clearance, and the digital tracking of goods, noting that Africa is at the "cusp of a connectivity revolution".

This point was also underscored by Enterprise Singapore chairman Peter Ong, who noted that while South-east Asia and China are natural markets for Singapore companies to expand into due to proximity and familiarity, other markets such as Africa offer untapped opportunities.

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He further noted in his welcome address that there are currently more than 100 Singapore companies in Africa compared to about 60 in 2018. The number of projects facilitated by Enterprise Singapore doubled in five years, between 2016 and 2018. The agency also supported 20 per cent more projects in 2020 compared to 2019. Eighteen partnerships were signed between entities from Singapore and Africa at the sidelines of ASBF this year.

Akinwumi A Adesina, president of the African Development Bank Group, who sat on the panel with Mr Tharman, highlighted digital payments as an area worth keeping an eye on.

"I would like to encourage you … to take advantage of this digital revolution to support financial inclusion, digital payment systems in Africa," said Dr Adesina. "I think this is an area in which Africa leads the rest of the world and I think we should take some of these countries and make them global companies."

Sustainable development in the area of green infrastructure and renewable energy will also be key.

Singapore has capabilities in the circular economy, specifically in waste and water management, noted Mr Tharman, adding that this is an area Singapore could participate in Africa's next phase of transition.

The African Continental Free Trade Area (AfCFTA), which came into effect on Jan 1, will also increase the region's potential.

Dr Adesina noted that the African Development Bank's support of this has been multi-faceted. This includes over US$40 billion invested in physical infrastructure over the last 10 years, which include the landmark Sene-Gambia bridge which was inaugurated two years ago, and now links the two countries, expanding trade opportunities; the Kazungula bridge, linking Zambia, Botswana, Zimbabwe and Namibia, which will expand intra-regional trade in southern Africa; and a 1,000 km highway linking Addis-Ababa to Mombasa, through Nairobi, which has quadrupled trade between Ethiopia and Kenya.

In the next two years, the African Development Bank will make US$2 billion available for the AfCFTA related integration projects. These investments will leverage an additional US$2 billion in co-financing.

Mr Tharman cited opportunities in the area of logistics, customs clearance, and the digital tracking of goods, noting that Africa is at the "cusp of a connectivity revolution".