Speech by Minister Ploumen at the Africa Works! Conference
Speech by Lilianne Ploumen, Minister for Foreign Trade and Development Cooperation, at the Africa Works! Conference, 17 October 2014.
Ladies and gentlemen,
It is an honour for me to close this Africa Works! conference today. I see many familiar faces. But more important, many new faces. People with ideas to do business. In Africa. With Africa. For Africa. I see seven hundred Dutch and African participants from the private sector, knowledge institutions, NGOs and government. Over the last two days, you have discussed not only the possibilities, but the challenges as well.
I recently heard the story of 29-year-old Roeland Lelieveld. In 2005 he did an internship in Kenya. As a former landscape gardener, he was surprised to see that land was being used only for grazing and producing charcoal. None of the felled trees were being replaced. Lelieveld knew this would exhaust the land and lead to desertification. So, against everyone’s advice, he set aside every cent he earned for five years, and then started his own forestry business: Africa Wood Grow. The company has been a success, not only for him, but for the local community as well. Farmers in the area have begun using Lelieveld’s methods, to get more out of their land. In June he won the Simon Jelsma Award, a prize for sustainable entrepreneurs.
Roeland Lelieveld has proved that you can be successful in Africa. And this shows us how perseverance, a businesslike attitude and common sense can go a long way. There are plenty of reasons to be optimistic about doing business in Africa. Since the turn of the century, African economies have been growing at an average rate of around five per cent. The amount of foreign direct investment has exceeded the budget for development aid. Africa has now become the second most attractive investment destination in the world after North America. And those already active on the continent rank it as by far the most attractive investment destination in the world today.
We see the positive effect of mobile phones and the internet on Africa. Farmers have access to information on prices, and supply and demand. So they no longer go to market with crates of tomatoes, only to discover that thousands of other farmers have had the same idea, and prices have plummeted. But there is also not-so-good news. We see increasing inequality, both between countries and within countries. Six of the ten fastest-growing economies in the world are on the African continent. But so are six of the ten poorest countries in the world. And even in the countries that are doing well, large groups of people are still not benefiting enough from this success. Women, for example.
The investment climate needs to be improved in many African countries too. Unclear and constantly changing legislation leads to higher costs, gives rise to corruption and makes doing business unnecessarily complicated. Excessive rules, regulations and bureaucracy soon force investors to take their business elsewhere.
Over the past few months, the Ebola outbreak has shown us how fragile some countries are. Ebola is rampant in Liberia, Sierra Leone and Guinea. Thousands have been affected by the disease, either losing family members or getting infected themselves. Many more are still at risk. The outbreak is a major humanitarian crisis, which could have a massive impact on the economies of these countries, which were already under pressure. President Ellen Johnson Sirleaf of Liberia was scheduled to attend Africa Works! too, but, instead, is having to lead the fight against this terrible disease. And we’re fighting with her side by side.
So doing business in Africa isn’t always easy. It takes guts. But if you are willing to take the risk, there’s a lot to be gained. And I know you have guts. This summer I was in Angola. A country at the wrong end of various rankings, like that of anti-corruption coalition Transparency International and the World Bank’s Ease of Doing Business Index. Even so, around thirty Dutch companies applied to go on that trade mission. Angola is known as a country that relies heavily on oil extraction, but we found out that many Angolans were particularly interested in Dutch agricultural expertise. Angola is one of the most fertile countries in Africa, but in the long civil war, a lot of knowledge and farmland were lost. And the Dutch know what they’re talking about when it comes to farming.
The opportunities are plentiful and the rewards are possibly even greater. There have been tremendous Dutch business successes with flowers in Kenya and in the maritime sector in Mozambique. We’re active in agriculture in Ethiopia. In Ghana we’re important partners in the water sector. And in Tanzania we’ve been giving advice on natural gas. But there is a world to be gained outside our traditional sectors of water, agriculture and energy. This summer I was in South Africa, visiting the World Design Capital 2014 event in Cape Town. Around fifty Dutch companies were involved in the event, specialised in Dutch design, innovation and sustainability. And Nigeria wants to work together with our creative industry too. So there are countless opportunities – for us and for the African economies. But we have to do business in a sustainable manner.
That is something I continue to emphasise, as minister for trade and development. We must not think ‘any business is good business’. Foreign trade must stimulate local employment and strengthen local SMEs. As Roeland Lelieveld’s example proves, it is often quite simple: pay a good salary, employ women – in management positions too – and establish a safe working environment. Healthy employees and a healthy workplace make for a healthy business.
I’m sure you, as entrepreneurs, see many more opportunities for doing business in Africa. That was also clear from the many applications submitted to the Dutch Good Growth Fund, which stimulates investment in development-relevant local projects and exports. Since its launch on 1 July, more than a hundred applications have been received. Most are from entrepreneurs who want to invest in Africa. Talks are ongoing with several candidates and I expect the first contracts to be signed this autumn. In other words, doing business in Africa provides opportunities, especially if the government and the private sector work together and spread the risks.
Another way to spread the risks is to look for alternative and innovative ways to finance projects. In a moment the Medical Credit Fund will be concluding a promising partnership with Philips to tackle the financing gap faced by many healthcare providers in Sub-Saharan Africa. The lack of funds means they cannot invest in improving their service quality, for instance by purchasing medical equipment. Healthcare facilities planning to purchase Philips equipment will now be referred to the Medical Credit Fund. If they meet the requirements, the Medical Credit Fund will assist with their credit application to the local partner bank. By reducing the unknown risks for local banks, the Fund facilitates affordable quality healthcare services in Africa. At the same time, healthcare facilities receive training and support to improve their business and quality. Philips contributes to this support programme by providing training and maintaining equipment.
I’m happy to say that governments and the private sector are also working together to respond to the Ebola outbreak. We really need everyone on board to tackle this crisis.
Africa has plenty of options to choose from. Emerging powers like China, Brazil, India and Turkey are standing in line to invest. But what distinguishes the Netherlands, and Dutch businesses, is the extra support we are giving. Our sustainable way of doing business. Today’s African leaders want long-term commitment, and Dutch companies have a good reputation in Africa.
So that is why I say: take the plunge in Africa. It can be done and there are plenty of opportunities. Where possible, the Dutch government will support you, with advice, with contacts, with credit. Our diplomatic missions are there to help you find your way. We’re there to nudge you in the right direction, but in the end it’s up to you. So let’s join forces, let’s create new partnerships and let’s reap the potential Africa has to offer. Let’s make it work.