Friday, November 16, 2007

Investment in Africa 'Not Without Risk', American Capitalists Say in Cape Town

CAPE TOWN 15 November 2007 Sapa-AFP


International investors remain wary of pumping money into Africa due to poor commmunications and fears that contracts may not be enforced, a major business conference heard on Thursday.

Amid African complaints that American businessmen are only
interested in oil, delegates from overseas attending the US-Africa business summit said the continent is still far from being an investors' paradise despite some recent progress.

"Investing in Africa is not without risk," Robert Mosbacher,
president of the US Overseas Private Investment Corporation (OPIC), told the conference in Cape Town.

"The single-biggest impediment is enforceability of contract. The perception is that this is an extraordinarily difficult thing in Africa."

Mosbacher said that "strengthening judicial processes and
enforceability is critical" if Africa, a continent rich in natural resources, wants to draw in more international investment.

Geoffrey White, chief executive of Lonrho PLC, said the continent had huge potenial given that it accounted for 22 percent of the world's land mass but only two percent of global output.

However White, whose London-listed company has a wide variety of interests in southern Africa, told delegates that a lack of adequate communications was a disincentive to many potential investors.

"An essential to develop is access to markets, good logistics ...and communications," said White.

Namibian President Hifikepunye Pohamba told the conference that greater peace and stability should encourage investors.

Many countries had introduced anti-corruption institutions and fair competition rules and were maintaining strict fiscal discipline, he added.

"We invite the US government to support our efforts by encouraging US businesses to invest in Africa."

However Pohamba, whose country has significant reserves of uranium and plutonium, said US companies were noticeably less interested in business possibilities in countries that lacked oil.

"Investment from the US into African non-oil sectors is quite low compared to those from the European Union and countries such as the People's Republic of China," he told a plenary session.

The conference comes the day after a new World Bank report said growth rates in Africa were catching up with the rest of the world, a trend which could help the continent become "an exciting investment destination for global capital".

Profile: Hifikepunye Pohamba

A political prisoner, who was whipped in public for his activism, and who has pushed through Namibia's land reform, Hifikepunye Pohamba was expected to keep the status quo, after his election as president.

He echoes the views of Namibia's founding president, Sam Nujoma, was nominated by the president and is from the same ruling Swapo party, which has dominated politics since independence.

It is a standing joke in Namibia that the two men even look alike - that was until Mr Pohamba recently shaved his beard off.

Mr Pohamba, 72, has a reputation for being accessible - he leaves his office door open - and seems to like a good joke.

'Poverty agenda'

However, as Lands Minister he has sped up one of Namibia's most controversial schemes - the expropriation of land from white farmers to black citizens.

He says the "willing-seller, willing-buyer" policy of the past 14 years has moved too slowly and expropriation is now needed.
In pursuing such a policy, he has allied himself closely with Zimbabwe's President Robert Mugabe, who has also pushed through land reform.

It was thought if he won in the election, poverty will top Mr Pohamba's agenda.

Party official

Born on 18 August, 1935, at Okanghudi in northern Namibia, Mr Pohamba was educated by missionaries.

At the age of 25, he helped found Swapo.

After he was arrested for his political activity, he left for Rhodesia but was promptly deported.

He spent four months in prison in Namibia before spending two years under house arrest in Owamboland, in the north of the country.

He then left home to set up Swapo's Angola office. It was on returning from Luanda that he met President Sam Nujoma.

Until the 1990s, Mr Pohamba represented Swapo across the African continent, with a brief spell out studying social and political studies in the former Soviet Union.

He headed Swapo's election campaign, before becoming an MP in 1990.

He then held the internal affairs, fisheries and marine resources, and land ministry portfolios.

Since 2002, he has served as vice-president of Swapo.

Married in 1983, he has six children.

Story from BBC NEWS:
Published: 2004/11/22 11:17:01 GMT

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