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CAMARA de COMERCIO URUGUAYO AFRICANA Desayuno de Trabajo – “ Nueva plataforma de negocios para Uruguay en Africa Subsahariana” Presentation by Ms EM Hajie South African Head of Mission on “Mutual benefits for Uruguay and Sub-Saharan African countries derived from the visit of the African Delegation” 16 October 2014 The African Union: Objectives, Organs & Committees, Financial Institutions • • • • • • The African Union was officially launched in 2002 in Durban, South Africa Benin, Democratic Republic of Congo, Ghana, Mozambique, Niger and Nigeria are six countries that form an integral part of the African Union’s 54 member states Amongst several objectives , Article 3 of the AU’s constitution includes the objective for member states to establish necessary conditions to rightfully participate in the global economy & international negotiations AND also to promote sustainable development of economic, social & cultural levels ECOSOCC (the Economic, Social and Cultural Council) is a professional group that advises on related matters and is one of the various AU organs The AU has Specialised Technical Committees at Ministerial level which address sectorial-specific issues e.g. Agriculture, Trade & Customs, Industry, Science & Technology, Energy, Natural Resources & Environment, Transport, Communications, Tourism, etc. The AU Financial Institutions are – African Central Bank, African Monetary Fund and African Investment Bank SWOT ANALYSIS (African delegation) Strengths contains vast mineral deposits & natural resources contains large tracts of land with enormous potential for agriculture contains rivers and lakes with the potential for considerable energy from hydro-power lots of sunshine through out most of the year for solar energy weather is conducive to wind energy economic structural reforms that encourage Foreign Direct Investment natural beautiful landscape and wildlife is conducive for Tourism Weaknesses language barrier – Spanish mostly not spoken or used in business poor income distribution (unstable middle class) relatively prone to natural disasters such as droughts and floods public debt owed to international organisations such as the IMF and World Bank SWOT ANALYSIS (African delegation) Opportunities relatively high demand for manufactured goods potential for beneficiation of raw material and mineral ores potential for infrastructure development potential for technology development mass potential for bio fuel development coastal boundaries on both the Atlantic and Indian oceans for further development of fisheries industry Threats contagious diseases such as Ebola pockets of religious extremism pockets of regional conflicts that occasionally flare up potential for political instability due to instances of dire poverty NIGERIA • • • • • Nigeria’s GDP was recently re-based to include e-commerce, telecommunications, music and the film industry (Nollywood) – the 2013 figure was US $503 billion. The re-basing enables Nigeria to scientifically and accurately calculate the contributions of each economic sector; and also which sectors have made the most progress and which sectors are lagging behind – a breakdown of the different sectors is available in table format is available on request The re-based data has placed Nigeria as the 24th largest economy in the world, which puts it on par with Belgium and ahead of Argentina, Austria and Iran; making it more attractive to foreign investors Nigeria’s economy grew at 12.7% between 2012 and 2013. The government intends to sustain the growth and make it more inclusive of the general population As the economy grows, incomes rise and demand for goods and services increases. With a population of 170 million and a large middle class section GHANA • • • • • • • Ghana’s economic industrialization makes it one of the more economically sound countries in Africa The industrial base is relatively advanced and includes electronics manufacturing, mobile phone manufacturing and automotive industry manufacturing Agriculture, textiles, gold mines, crude oil and gas refining also form part of the economic activity and Ghana intends to aggressively grow these sectors by the year 2020 It imports military technology and industrialization equipment Ghana gets 97% of its energy from Hydropower and exports some of this to neighbouring countries. Wind energy also contributes significantly to its industries It has begun the construction of the fourth largest solar power plants in the world, which uses photovoltaic (PV) technology to convert sunlight directly into electricity. It is due to reach full capacity at the end of 2015 Ghana has mechanisms to attract investments into its biomass & bio-energy sectors by creating relevant financial and tax incentives. The objective is to produce ethanol and biodiesel on a sustainable basis. The long-term vision is to surpass Brazil as the world’s largest bio-fuel producer DEMOCRATIC REPUBLIC OF CONGO • • • • • Democratic Republic of Congo is widely considered to be the richest country in the world regarding natural resources, with untapped deposits of raw minerals estimated to be worth more than US$24 trillion Mining was the main driver of economic growth during 2013 at 8.1% and several mining companies have since passed from exploration to production Economic growth is conservatively projected at 8.5% for 2014 and 8.6% for 2015. The main economic drivers are mining (copper, cobalt, gold), reconstruction of roads and energy infrastructure Congo is also investing heavily in agriculture and related agribusiness to offset any decline in the demand for minerals and lessen the risk of reduced foreign direct investment due to conflict in the east of the country MOZAMBIQUE • • • • • • Although Mozambique is one of the least developed countries in the world, in 2013 it posted a robust 7% economic growth mainly due the mining of coal Projections for 2014 (8.5%) and 2015 (8.2%) look good due to the focus on infrastructure development mega-projects. The agriculture sector employs 70% of the population, but lacks the same dynamic growth and is expected to post a mere 4% progression. However the potential for this sector is high especially for cash crops such as cashew nuts, tea and tobacco. Productivity is expected to increase once political stability is achieved. National elections are due 15 October 2014 With a large coastal line on the Indian ocean, fishing also has a lot of potential particularly the export of prawns The tourism sector has received a boost through development of the “Peace Park” which links with the Kruger National Park in South Africa and Gonarezhou Wildlife Park in Zimbabwe Imports include foodstuff, textiles, vehicles, fuel, machinery & equipment BENIN • • • • The economy of Benin still remains underdeveloped and dependent on subsistence agriculture and cotton. Cotton accounts for 80% of official export receipts A modest fishing fleet provides fish and shrimp for export to Europe The manufacturing sector is very small and confined to light industry which processes primary products. Benin imports foodstuff, capital goods, and petroleum products NIGER • • • • • • Niger has serious financial and economic problems due to the persistent price slump of uranium. When the uranium-led boom ended in the late 1900’s, the economy stagnated and new investment has been very limited. Niger’s government actively seeks foreign private investment and considers it key to restore economic growth and development. Niger’s two uranium mines are owned by a French-led consortium and operated by French interests. Niger has known coal reserves and currently the coal is extracted from an open pit mine and is used for fuelling an electricity generating plant that supplies energy to the uranium mines. Niger imports rice, machinery, vehicles and parts, petroleum and cereals SWOT ANALYSIS (URUGUAY) Strengths Weaknesses Stable economy Stable democracy One of the most economically developed countries in South America Host to important international and regional organizations (MERCOSUR, ALADI, etc.) High standing in multilateral arena Proximity to Africa An active Afro-Uruguayan community Small size economy Language SWOT ANALYSIS (URUGUAY) Opportunities Threats Investment in Uruguay is declared of national interest by law and offers attractive incentives to foreign investors Government is looking for trade partners in Africa, moving away from MERCOSUR Uruguay can be used as gateway to South American countries Uruguay has free trade zones Competition from the Far East Sources and References • • • • • • • • • • OECD development centre UNDP African Development Bank East African Centre for Law and Justice African Economic Outlook (publication) The Guardian – United Kingdom (publication) CIA World Fact book (publication) Global Edge – Michigan State University Business School (publication) Global Finance Magazine (publication) Bloomberg.net (internet site) THE END