NAIROBI, Kenya, Aug 26 – Too much risk is holding Africa back from private sector investments as financiers shy away from long term investments in the continent.
The World Bank Group President Jim Yong Kim says whether it’s real or a perception, the private sector is concerned that there is too much risk in investing in the continent.
He says the continent’s leaders need to change both the perception and the reality in order to attract long term investments from the private sector worldwide.
“Governments have to do their part, they need to improve governance and regulation, uphold the rule of law, make the procurement process competitive and deliver better services,” Kim stated during the high policy private sector dialogue on the sidelines of the Sixth Tokyo International Conference on African Development (TICAD VI) in Nairobi.
Africa has been struggling with different challenges that include political instability, red tape and rampant corruption seen as obstacles to investment.
“The big task will be to bring some $100 trillion of pension capital that are earning almost nothing to bring them into Africa,” Kim observed.
Africa is set to grow at 3.7 percent in 2016 and 4.5 per cent in 2017.
Even with the economic headwinds 21 African countries are projected to grow at above 5 per cent in 2016, and a further 19 countries are projected to grow between 3 per cent to 5 per cent in the same period.
According to Africa Development Bank President Akinwumi Adesina for African economies to grow further Private sector must be boosted.
“Africa must support its private sector through affordable lending and to build industries. Today the size of the manufacturing sector has shrunk and needs to be looked at,” he added.
The private sector contributes to about 70 percent of Gross Domestic Product (GDP) in Africa and account for 90 percent of Jobs in the continent.
On his part President Uhuru Kenyatta urged Japan to shun perception and increase investments in Africa.
President Kenyatta urged Japan’s private sector to stop shying away from the African continent and take challenges as opportunities for investments.
He urged the Japanese delegation to take time and visit other parts of the country and look for investment opportunities in the country.
The Sixth Tokyo International Conference on African Development is set to be officially opened In Nairobi on Saturday by President Kenyatta and Japan Prime Minister Shinzo Abe and will end on Sunday.
Over 100 companies from Japan will be in the country to exhibit as part of the 4,000 delegates from Japan.
Moreover 60 business Memorandums of Understanding are also expected to be signed during the conference.