Translating business unusual
Two crucial events have happened in the past three weeks on the business front. First, it was the United States of America (USA)-African Leaders Summit and, just at the weekend, the annual Southern African Development Community (Sadc) Heads of State and Government Summit.
Returning from the US-African Leaders Summit last week Tuesday, President Peter Mutharika, among other things, gave government ministers 30 days to come up with reports on investment opportunities in their respective sectors. He also reiterated the need for Malawi to move towards economic independence.
And during the Sadc Summit in Victoria Falls, Zimbabwe, the regional bloc’s new chairperson Robert Mugabe, President of Zimbabwe, emphasised the critical need for African countries and Sadc member States in particular to add value to agricultural produce for exports. He said the region stands to gain more from international trade if it exported finished products.
There is no doubt these are beautiful thoughts and resolutions. Suffice to say, however, that the story about the need for African countries to add value to their exports has been told more than once that it has become a cliché.
Trade and economic commentators are on record as having argued that to reap more from international trade, African countries need to walk the talk on value-addition. They should graduate from exporting predominantly ‘raw’ or ‘semi-processed’ agricultural produce.
Closer home, in 2004, former president the late Bingu wa Mutharika (may his soul continue resting in peace) unveiled a policy direction that sought to transform the country from a predominantly importing and consuming economy to one that produces and exports. Sadly, not much is heard about this vision today.
Besides seeking international opportunities in Europe, the Americas, the Far East and beyond, African countries should also trade more among themselves. Intra-Africa trade is already very low at 12 percent and sub-Saharan Africa’s contribution to global trade is a disappointing and unbelievable three percent!
In his opening remarks for the US-African Leaders Summit, President Barack Obama said: “I do not see the countries and peoples of Africa as a world apart; I see Africa as a fundamental part of our interconnected world–-partners with America on behalf of the future we want for all of our children. That partnership must be grounded in mutual responsibility and mutual respect.”
In fact, as indicated in an earlier article, everyone wants to interact and trade with Africa. For example, there is the Tokyo International Conference on Trade and Development (Ticad) which is co-organised by Japan, the United Nations (UN), the World Bank, the United Nations Development Programme and African Union Commission. Then we have the European Union (EU)-Africa Summit and the India-Africa Forum, among others.
Why the interest? I believe it is because Africa has huge potential to drive global business in the years ahead if it puts its house in order.
President Mutharika rightly observed that there are opportunities out there. However, if truth be told, to unlock such opportunities there is need to improve our business environment, reduce the number of days it takes to register a company, provide reliable infrastructure and utilities as well as eliminating red tape in government.
Currently, it takes a maximum of 135 days (about four months) for an investor to complete the registration process of a business. Really? In this day and era of information technology (IT)? If that is not bureaucracy then what is? It is such red tape that has frustrated several prospective investors, including Japan Tobacco International (JTI) Leaf Malawi, whose investment proposal to the Malawi Government submitted in 2010 is yet to be responded to. The company wanted to set up a cigarette manufacturing factory and has since changed its plans and relocated elsewhere.
For the country to benefit more from platforms such as the US-African Leaders and Sadc summits, we need, as a country, to develop a check-list to direct follow ups. In the absence of such a mechanism, as I have always said, meaningful investment opportunities will keep eluding us and such forums will remain talking shops offering delegates opportunities to shop around or have photo shooting sessions in foreign capital cities.
Mr. President, some of your predecessors made similar promises of “business unusual”. It is action and less talk that will make a difference.
