It's time for Africa

WHETHER it's the burgeoning energy sector in Nigeria, the rapidly growing financial sector in Kenya or the highly prolific film industry of Nollywood, there are a number of investment opportunities for TT companies on the African continent.

This was the view of Ministry of Trade permanent secretary Norris Herbert as he addressed the ministry and the Emancipation Support Committee's (ESC) 19th annual Trans-Atlantic Trade and Investment Symposium at the Hilton Trinidad and Conference Centre, St Ann's, on July 31.

Herbert said the symposium has grown to become a valuable platform for expanding business and fostering trade linkages between TT, Africa and the African diaspora.

"The Government is cognisant that more meaningful engagement is required if either party is to benefit from these arrangements."

Government is currently involved in the African, Caribbean and Pacific Group of States (ACP)-European Union (EU) partnership agreement that will replace the ACP-EU Cotonou agreement when it expires in February 2020.

"While this partnership agreement will foster ACP relations with the European Union, it will also serve as a framework for building partnerships with African countries, while gradually integrating and improving relations among ACP states."

From 2014-2018 Africa has been one of TT’s major trading partners as an average of 15 per cent ($7.2 billion) of this country’s total imports come from this region and include products such as machinery and equipment, mineral products, fish, and vehicles. However during this same period, an average of only two per cent ($1.6 billion) of TT's exports were destined for the continent and include products such as chemicals, minerals, machinery and fertilisers.

"Given that the major inputs from the African countries’ major imports are concentrated in machinery and equipment, chemicals and petroleum products, TT must capitalise on the opportunities for export in an effort to improve our trade balance and enhance our trading relations by tapping into this viable market of 54 countries and 1.2 billion people," Herbert said.

LIGHTS, CAMERA, DOLLARS

The recent launch of the African Continental Free Trade Area (AfCFTA), a 55-member, US$3.4 trillion economic bloc, could serve as an ideal platform to improve our trade relations with that continent.

Herbert said the continent bears significant strengths in various sub-sectors in which TT also exhibits strong offerings. These areas can be explored for collaboration, including film services via the Nigerian film industry Nollywood, which earns an average of US$600 million annually, produces about 50 movies per week – second only to India’s Bollywood and ahead of Hollywood – and employs an estimated one million people, making it Nigeria’s largest employer after the agricultural sector. There are opportunities for banking and financial services, as South Africa, Mauritius, Kenya and Ghana have significantly large and rapidly growing financial sectors, and with significant growth in the Nigerian financial sector it has become West Africa’s largest banking market. And of course, energy services as the petroleum sector in Nigeria contributes an average of ten per cent to the country’s GDP, with an estimated average of two million barrels of oil produced per day and natural gas production has increased from 5.71 billion cubic metres in 1997 to 39.61 billion cubic metres in 2016, growing at an average annual rate of 13.01 per cent.

"Forums such as these create avenues for market expansion, company growth and national development. I also challenge you to think more innovatively and step out of your comfort zone as we all work together to enhance our relations with one of the world’s next global growth poles. Creating a place for TT on the global platform is the responsibility of us all."

COCOA IN THE SUN

On TT projects in Africa, Herbert pointed out that Republic Financial Holdings Ltd, the Caribbean's biggest indigenous bank, in April 2018 acquired the majority shareholding of HFC Bank of Ghana Ltd.

"The now rebranded Republic Bank (Ghana) Ltd represents Republic’s aim to be key player in corporate banking across the globe."

The National Gas Company (NGC) too has recognised Mozambique’s nascent energy sector, specifically as it relates to development in floating and onshore LNG, petrochemicals, estate and infrastructure development. NGC signed a technical services agreement with Empresa Nacional de HidroCarbonetos, the state entity responsible for the research, prospection, production and commercialisation of petroleum products in Mozambique, in May 2018. The agreement is aimed at creating a new revenue stream for the company through the monetisation of NGC’s invaluable intellectual expertise and experience, and exploring opportunities for future investment and partnership.

Herbert also spoke of meetings between the TT Government and Ghana and the visit last month by new President of Ghana Nana Akufo-Addo to this country, reciprocating the Prime Minister's visit in May 2016. Akufo-Addo's three-day visit to TT focused on several cooperation areas pertinent to both countries, including energy, where TT can leverage expertise in its mature energy sector through offering training and knowledge transfer in oil and gas exploration and production, policy formulation, and gas processing; and agriculture, as both countries have niches in the global cocoa industry of varying magnitudes.

"Ghana and its neighbour Côte d'Ivoire produce approximately 65 per cent of the world’s cocoa but only seven per cent of the world’s chocolate. This can be an ideal partnership from which our local cocoa industry can benefit."

Michael Sudarkasa, director of the South Africa-based Africa Business Group, said in his keynote address the continent for many years has reached out to the world "almost cap in hand," which belies the wealth, natural and human resources of Africa. He said some of the opportunities for investment included the media and creative industries, Nollywood, music and dance, construction and infrastructure, housing, commercial real estate, roads, bridges, port expansion, financial services and the manufacturing sector.

HISTORIC RELATIONS

ESC chairman Khafra Kambon said over the 19 years the symposium has created some shifts in government policy and has led to trade missions to Africa and a visit in 2007 by prime minister Patrick Manning, the first Caribbean leader to address an African Union summit. He recalled Manning promoted trade ideas at that level and this completely transformed TT's relationship with Africa from one of primarily diplomacy to trade dealings as well.

With the change in administration in 2010, some things at the government level fell apart. He recalled when the current administration came into office there was an early trip to the continent and this was possibly an effort to repair the relationship.

Kambon said successes of the private sector and between governments has not only been beneficial to the country but has raised the diplomatic status of TT and the Caribbean region. He expressed hope for sustained development in this critical time with the launch last month of AfCFTA.

"So you now have the largest free trade market in the world in Africa."

The African market is set to grow and there is a great advantage for investors to get in early, he said.