Geneva, 5 July 1999 –
The United Nations, with the support of the International Chamber of Commerce
and leading multinational companies, today launched a campaign to show that
many African countries are promising destinations for foreign direct investment,
despite the continent’s negative image.
UN Secretary-General Kofi Annan gave his personal endorsement
to a drive backed by facts and figures to convince foreign investors not to
write Africa off, but to take a closer look, country by country, sector by sector
and opportunity by opportunity.
Business leaders conferred with Mr Annan and senior UN officials
on a joint project by the UN Conference on Trade and Development and ICC, designed
to help least developed countries to become more attractive to foreign direct
investors.
Some 30 leading international companies are providing advice
to the governments of Bangladesh, Ethiopia, Madagascar, Mali, Mozambique and
Uganda on the essentials of a successful direct investment regime – a pilot
project that will be extended to other countries. An investment guide to Ethiopia
is the first in the series.
Introducing a booklet on foreign direct investment in Africa
(FDI), published today by UNCTAD as part of the campaign, Mr Annan said that
for many people in the rest of the world Africa evokes images of civil unrest,
war, poverty, disease and mounting social problems.
Mr Annan described the booklet, Foreign
Dir
ect Investment in Africa: Performance and Potential, as "an important
step to help change the image of Africa, to put the continent back on the investment-location
map."
It is being distributed to companies throughout the world by
UN offices and ICC, the world’s leading business organization, which has
member companies and business associations in more than 130 countries.
The main findings of the booklet were released in the form of
a fact sheet
at a joint press conference called by Secretary-General Annan and ICC President
Adnan Kassar. The ICC President is Chairman of Fransabank, a leading finance
and banking group with main offices in Lebanon.
In his foreword, Secretary-General Annan said that the United
Nations was determined to help Africa to develop and to play its full part in
the global economy. "We are particularly concerned to help promote investment
– domestic as well as foreign – as a means of strengthening the supply
side of the African economy."
UNCTAD said the tendency to lump African countries together
in a single stereotype gives a wrong impression. The agency reported that the
great majority of African countries have substantially improved their regulatory
frameworks for foreign direct investment. "Today, regulatory conditions
in many African countries are on a par with those in other developing countries,"
it said.
The fact sheet lists seven investment "front runners"
– Botswana, Equatorial Guinea, Ghana, Mozambique, Namibia, Tunisia and
Uganda. It comments: "The dynamism of their FDI inflows now rivals other
well-performing developing countries. Though the seven countries account for
less than one tenth of the continent’s population and GDP, they received
one quarter of African FDI in 1996."
According to UNCTAD, data for African affiliates of United States
multinational companies show annual returns on FDI averaging 29% since 1990.
"The profitability of their African affiliates has been consistently higher
in recent years than that of affiliates in most other regions of the world,
including those of the developed countries."
UNCTAD Secretary-General Rubens Ricupero said: "A number
of front runner countries have attracted above-average amounts of FDI…From
the viewpoint of some foreign companies, investment in Africa seems to be highly
profitable, more profitable indeed than in most other regions."
The fact sheet contains comments on investment and business
prospects in Africa by Barclays Bank, Citibank, Coca-Cola, Marubeni, Nestl,
Novartis, Royal Dutch/Shell, Standard Chartered, Unilever and Vodafone.
Several of the executives quoted emphasized the importance of
political stability in making investment decisions. One view expressed was that
more needed to be done to create the economic, social and political environment
in which companies can succeed.
Dominic Bruynseels, Managing Director, Barclays Africa, gave
this assessment of investment prospects: "Several key African economies
are growing at an impressive rate, encouraged by growing political stability
and financial prudence. Trade and exchange rate liberalization are features
of the reforms designed to facilitate international investment and to achieve
an economic climate that encourages business development."
The UNCTAD fact sheet on foreign direct investment in Africa
is a joint initiative with the World Bank’s Multilateral Investment Guarantee
Agency (MIGA), the UN Development Programme (UNDP) and ICC.