SPACE may be the final frontier. But for TT, Africa is "the new frontier," as this country seeks to diversify its economy and find new trade opportunities. Public Utilities Minister Robert Le Hunte, should know, since before his appointment two years ago to the government, he was local financial giant Republic Financial Holdings Ltd’s man on the ground in Ghana for several years.
Le Hunte spoke to Business Day Monday at his office in St Clair. He described himself as an advocate for exploring opportunities in Africa because of his first hand knowledge of working on the continent.
For years, there was a reluctance to invest in Africa because the continent was believed to be racked with instability, most notably civil unrest and war. This is no longer the case, said Le Hunte, with 80 per cent of African governments now being democratic.
According to information from the World Bank, Africa is a preferred investment destination, with 4.7 per cent economic growth being projected for Sub-Saharan Africa (SSA) over the next five years. The region has the highest number of reformed economies where the ease of doing business is good.
Ghana is one of those countries. In his former role as Republic Bank's general manager for finance and planning, one of Le Hunte’s primary assignments was to expand the bank's operations into Ghana.
In May 2015, RFHL became the majority shareholder in HFC Bank with 57.11 per cent equity stake after a mandatory tender offer to shareholders with the approval of the Securities and Exchange Commission and the Bank of Ghana. Le Hunte recalled that in 2012, RFHL took what many considered at the time, to be the brave decision of expanding its footprint into SSA and Ghana, in particular.
In May 2016, Prime Minister Dr Keith Rowley made an official visit to Ghana. At a reception in Dr Rowley’s honour, Republic Bank’s president, Nigel Baptiste said there was potential for significant future growth between Ghana and TT.
On that same trip, Rowley toured the Atuabo Gas Processing Facility, which is owned by the Ghana National Gas Company (Ghana Gas).
He volunteered TT’s century-long expertise in oil and gas production, especially since this country had been particularly successful in giving value to their natural gas resources. “Our experience with utilising gas both for power generation and for the development of the petrochemical industry as well as, exports of liquefied natural gas (LNG) could be of interest to countries in Africa and we are keen to share our experience in oil and gas with our brothers in Africa."
More alike than different
Compared to other parts of the world where members of the African diaspora are found, Le Hunte said some of the greatest numbers can be found in the Caribbean. In the case of Ghana, Le Hunte said Republic Bank was able to gain a foothold there because Ghana’s laws and ways of doing business were similar to those of TT. Another reason why expanding Africa-Caribbean economic ties makes sense is the institutional memory and emotional, historical and political ties which both regions share.
Within the energy sector, for example, Le Hunte said African countries with emerging energy industries are now negotiating with energy multi-nationals and are at a place that TT has already been. TT’s considerable expertise in energy can benefit the continent. Emotional ties are reflected in the fact that English is the main language in SSA, there are similarities between the laws of African and Caribbean countries — remnants of both regions’ colonial past— and even foods.
“People in TT and Ghana both have a love for food like fried plantains, black eyed peas and callaloo,” Le Hunte said.
The World Bank projects the world's population to grow by 2.4 billion between 2015 and 2050, and over half of that (1.3 billion) will be in Africa. Consumer sectors also accounted for almost half of Africa's GDP growth from 2010 to 2014.
In 2015, African consumers spent US$1.4 trillion. South Africa, Nigeria and Egypt accounted for much of that expenditure. Le Hunte said this shows there are considerable opportunities for TT businesses to invest in Africa. But it can’t be armchair investment. Le Hunte said he would encourage anyone from TT seeking business opportunities in Africa to get first hand knowledge from the ground and understand the nuances there.
Greater air linkages between TT and Africa would be a boost to such efforts. Le Hunte said he was pleased to see that Dr Rowley discussed an air services agreement with Ghanaian President Nana Akufo-Addo during a state visit in June. Other bilateral discussions during that visit focused on topics like energy, health, finance, education, tourism, agriculture and culture.
Trade and Industry Minister Paula Gopee-Scoon said Africa remains important to this country's efforts to strengthen trade links with other countries and diversify this economy. In an interview last Friday at UWI's Institute of International Relations in St Augustine, Gopee-Scoon said as part of Government's development of a new trade policy from 2019 to 2023, "we have considered all countries within the globe and those for which there would be greater trade complementarity".
Among the countries being looked at are countries on the African continent.
While Le Hunte believed it was possible as well for locally manufactured goods to find their way on to shelves in African stores in the near future, Gopee-Scoon explained it is quite costly to export goods to and import goods from Africa.
Services trade focus
Instead, the greater potential lies in exporting services, especially in energy, which she said makes more sense, logically and economically.
"The area for focus for Africa will be trade in services. That's on account of the restrictions we have in terms of transportation," she said.
Some of this has already been happening for over a decade. In 2007, at the eighth Ordinary Session of the African Union (AU) Conference in Addis Ababa, Ethiopia, then prime minister Patrick Manning offered to share TT’s energy sector experience with AU members.
And two years later, South Trinidad Chamber of Industry and Commerce (now the Energy Chamber) hosted a business roundtable discussion with visiting energy ministers from Ghana, Nigeria, Uganda, Cote d'Ivoire and Tanzania. This event was expected to bring fruitful business contacts for those companies that want to expand their operations in Africa. It's unclear if this initiative yielded any results.
But energy services is not the only form of trade being looked at in terms of Africa. Le Hunte mentioned Nollywood, Nigeria’s burgeoning film industry, as a potential opportunity for local filmmakers beyond Hollywood and Bollywood. Gopee-Scoon also considered opportunities in agriculture and agro-processing, where several parts of Africa have made great strides.
Gopee-Scoon said her ministry had got the ball rolling on expanding trade links with Africa, getting Cabinet approval for a reciprocal investment promotion agreement with Ghana.
Ghana was the first African nation to achieve independence from Britain on March 6, 1957. The country is the world’s second largest cocoa producer, and Africa’s most important gold miner behind South Africa.
But Ghana is not the only African nation TT is seeking increased trade with. Nigeria and South Africa are two other countries being considered for TT's new trade policy. Through embassies in both of these countries, Gopee-Scoon said TT will be continuing its work.
On whether there would be any trade missions going to Africa in the near future, Gopee-Scoon said some private missions have already gone, most notably to Ghana. More details will be revealed when the trade policy is approved. The model policy is currently before Cabinet's finance and general purposes committee. Gopee-Scoon was optimistic it would be going to Cabinet for consideration "within a week or two."
Noting shifting economic growth poles in the world, Le Hunte said Africa is part of an emerging south-south trade arena which needs to be explored. If TT could tap into the potential that Africa offers, it could result in a win-win scenario for the country and the continent.