African Ministers Call for Private Investments, Encourage Legislation to Facilitate Private Sector Development

WASHINGTON, April 13, 2014—African countries continue to sustain high growth, and a number of them are geared to producing finished goods from their homegrown raw materials. 

This was the message at the African Finance Ministers Press Conference held April 12^th during the IMF-World Bank Spring Meetings.

The press conference featured ministers from Chad, Mozambique and Uganda, and also included Djibouti’s Governor of the Central Bank.

As part of the exploitation and production of petroleum in Uganda, for example, Uganda’s Minister of Finance, Planning and Economic Development Maria Kiwanuka announced that Uganda is poised to build an oil refinery. 

“We are going to build a refinery in Uganda which will be supplying the East Africa region with petroleum products,” she said.

Similarly with coffee, Kiwanuka said, “We are moving to make sure we get coffee roasting factories in-country—so [it] does not go out as coffee beans and come back as coffee from another country.”

Many African countries are boasting significant growth rates. The four African countries featured at the press conference represent a cross section of growth on the continent.

Chad is currently growing at 8%, but expects double-digit growth for 2014 given that the country has two new oil fields that will be operational this year. Mozambique, which has been growing at the rate of 7% in the last 10 years, expects 8% growth in 2014, while Uganda’s growth is expected at 5.7% for FY 2014 and 6% for 2015. Djibouti has a growth rate of 5%. 

Mozambique’s Minister of Finance Manuel Chang acknowledged that in the last decade sub-Saharan African countries had a focus on economic development, putting many of the countries among fastest growing economies in the world. 

“This performance made many countries increase their development and common prosperity,” Chang said.

Chad’s Minister of Finance and Budget, Bedoumra Kordje, emphasized the importance of public private partnerships (PPP) because government cannot be expected to do everything.  “We know that economic growth and job creation is a matter of the private sector,” he emphasized. 

Greater integration and economic diversification

Djibouti’s Governor of the Central Bank, Ahmed Osman Ali, describing Djibouti’s strategy to attract investment said, “We try to facilitate FDI, working on legislation, on guarantees and on transparency, and this work that we have been doing for several years is bearing fruit because we are having investments in telecommunication, transportation, construction of harbors, and in the management of our ports.”

The role of regional integration as well as the need to address Africa’s infrastructure were central to the discussions.  Uganda’s Minster gave an example of what the East African Community countries are doing.

“On a regional basis, we are working together with the other countries in the East Africa Region on improving the network of regional roads, railways, ports, inland ports, and allocating support to oil production,” Kiwanuka said. The countries Kiwanuka referred to include Burundi, Kenya, Tanzania, Rwanda and Uganda.

“East Africa’s Monetary Union Protocol was signed by the respective five heads-of-state at the end of last year,” she said. 

Kiwanuka explained that this greater integration will constitute a population of 150 million people and a combined GDP of more than $100 billion, sustaining economic growth and boosting efficiency through exploitation of synergies and economies of scale.

Ali of Djibouti also explained how Djibouti’s port has been useful to its neighbors.

“We built a new deep water port a few years ago, which boosted the economy and helped better development in Ethiopia as well as in facilitating the exports of other neighboring countries,” said Ali. 

Economic diversification and the danger of over reliance on oil was discussed by the Ministers, who strongly recommended diversification.

Minister Chang announced the forthcoming International Conference, “Africa Rising” on May 29-30, organized by the Government of Mozambique in collaboration with the World Bank-IMF, which will be attended by “all governors of the World Bank and IMF as well as other entities during which this strong economic development Africa is reaching will be analyzed.”