UNITED NATIONS AND BUSINESS PROMOTE FOREIGN INVESTMENT IN AFRICA
Press Release
SG/2055
TAD/1882
UNITED NATIONS AND BUSINESS PROMOTE FOREIGN INVESTMENT IN AFRICA
19990706 GENEVA, 5 July (UN Information Service) -- The United Nations, in cooperation with the International Chamber of Commerce (ICC), today launched a campaign to draw attention to the investment potential of Africa.The campaign is backed by facts and figures compiled by the United Nations Conference on Trade and Development (UNCTAD), and United Nations Secretary-General Kofi Annan has given it his personal endorsement. The aim is to convince foreign investors to take a closer look at Africa -- country by country, industry by industry, and opportunity by opportunity.
According to UNCTAD, data for African affiliates of United States multinational companies show annual returns on foreign direction investment (FDI) averaging 29 per cent 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", says UNCTAD.
Business leaders conferred in Geneva today with Mr. Annan and senior United Nations officials on a range of issues involving United Nations-business cooperation, including a joint project by UNCTAD and the ICC designed to help least developed countries (LDCs) become more attractive to foreign direct investors.
The UNCTAD Secretary-General, Rubens Ricupero, provided a progress report on the project, which involves the preparation of investment guides to Africa. It is the first time the international business community has joined the United Nations, which in the past has worked mainly with governments, in such an effort. The Secretary-General has described the project as a showcase for cooperation between the public and private sectors.
In his progress report, Mr. Ricupero pointed out that while developing countries were attracting an increasing share of global FDI inflows -- $464 billion in 1997 -- the least developed countries were receiving less than one-half of one per cent of these flows, or $2.2 billion.
The project began with a workshop in Addis Ababa earlier this year, followed by another in Bamako, Mali. Its first product is an investment guide to Ethiopia. Prepared by PricewaterhouseCoopers, the guide notes that economic liberalization is under way in that country, and that there is a considerable amount of privatization. Other encouraging signs for investment in Ethiopia are fiscal stability, tax incentives and low inflation, while weaknesses include poor infrastructure and low spending power.
In addition to the guide to Ethiopia, UNCTAD has produced a booklet, Foreign Direct Investment in Africa: Performance and Potential, published today. Introducing the publication, the Secretary-General described it as "an important step to help change the image of Africa and to put the continent back on the investment-location map".
The main findings of the booklet have been issued in the form of an "Africa Fact Sheet", which is being given wide distribution through the joint efforts of UNCTAD, the World Bank's Multilateral Investment Guarantee Agency (MIGA), the United Nations Development Programme (UNDP) and the ICC. It is also posted on the following Web sites:
-- www.unctad.org -- www.un.org/partners/business -- www.iccwbo.org -- www.ipanet.net -- www.kpmg.de -- www.undp.org/tcdc/tcdc.htm
The fact sheet identifies seven African countries with above-average performance in attracting foreign investment: Botswana, Equatorial Guinea, Ghana, Mozambique, Namibia, Tunisia and Uganda. According to the fact sheet, "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."
Dominic Bruynseels, Managing Director, Barclays Africa, was among the representatives of the business community asked by the ICC, as part of the project, for an assessment of investment prospects in Africa. He said, "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."
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The governments of China, Finland, France and Norway are providing financial support for the joint project on investment guides, as is the UNCTAD Trust Fund for LDCs.
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Note: For more information, contact: Karl P. Sauvant, Chief, International Investment, Transnationals & Technology Flows Branch, Division on Investment, Technology and Enterprise Development, UNCTAD, tel. 41-22-907-5707; fax: 41-22-907-0194; e-mail: karl.sauvant@unctad.org, or Ludger Odenthal, International Investment, Transnationals & Technology Flows Branch, Division on Investment, Technology and Enterprise Development, UNCTAD, tel. 41-22-907-6325; fax: 41-22-907-0194; e-mail: ludger.odenthal@unctad.org