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Summary

The Gulf-African Investment Conference 2010

Summary of Session One

The President of the Republic of Mozambique, Armando Guebuza, praised the level of the Saudi-Mozambican relations in all fields. He praised the efforts of His Royal Highness King Abdullah bin Abdulaziz in supporting and backing up development in the African continent, as well as his efforts in supporting all developing and poor countries in pursuit of realizing welfare and stability in all the countries of the world.

The President of Mozambique praised, in the first session of the Gulf-Africa Investment Conference 2010 held in the morning today at the King Faisal Conference Hall in Riyadh Intercontinental Hotel, the subjects and objectives of the conference. He said it was the second conference to be organized by the Gulf Research Center (GRC) in pursuit of cooperation between the Gulf states and sub-Saharan African states.

The GRC organized the first conference to be convened under this title last year in Cape Town, South Africa. He added that the present conference discussed available opportunities, exchange of benefits, and increasing the size and value of trade exchange between African countries and the Arabian Gulf countries. He went on to point out that the conference focused on exploring new potential and possible opportunities.

He asserted that it derived its importance from the fact that it was convened under the patronage of the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz in the capital of the Kingdom of Saudi Arabia. He also mentioned that the Kingdom accords the Gulf-African cooperation absolute importance and that historical foundations and the geographical proximity pave the road for increasing trade exchange between the two sides.

The Mozambican President explained that his country is full of opportunities of economic cooperation with the Kingdom and the Gulf countries, especially in the field of agriculture and raising sheep and cattle, for instance, i.e. things that satisfy the food requirements of the Gulf countries. President Armando Emílio Guebuza predicated his postulates on a study carried out by the GRC in 2008, which listed the present and future requirements of the Gulf countries. He explained that his country offers Gulf investors vast areas suitable for agriculture supplied with irrigation networks and other lands suitable for affordable agricultural reform. In this respect he explained that his country has developed its industrial regimes and its investment legislations, improved irrigation networks and methods, infrastructures of the agriculture and water sector, and means of communications and transport. In addition to this, he referred to climate diversity and electric power as props of Gulf investment in these important sectors, which will provide the Gulf Cooperation Council with huge investment opportunities in large-scale food production. The President stated that they have an affirmative and serious desire to welcome investors from the Kingdom of Saudi Arabia, the Gulf countries and Arab countries in general. He said that his country has a large market for Gulf trade, as its population is 20 million people and it has several African neighbors. It also enjoys political stability and full concord amongst adherents of different religions, especially the concord between Muslims and Christians. For all these reason, he concluded, Mozambique is a good homeland for Gulf investments.

Summary of Session Two

The second session of the Gulf-Africa Investment Conference 2010, which was organized jointly by the Saudi Council of Chambers of Commerce and Industry and the GRC,  was convened at the King Fiaisal Conference Hall at the Riyadh Intercontinental Hotel under the patronage of the Custodian of the Two Holy Mosques King Abduallah bin Abdul Aziz. In this second session, the President of Senegal, Abdoulaye Wade, praised the efforts of the Custodian of the Two Holy Mosques to support the Arabian-African cooperation and all Islamic countries in the different continents, Wade said "…as the Chairman of the Islamic Conference Organization, I highly value the constant and continuous efforts of King Abdullah to support Islamic countries in their persistent quest to realize concord and agreement between Islamic countries and the whole world".

President Wade said that he expects the conference to reach important findings and make important recommendations to increase the size of economic cooperation between the two blocks. He said, " I don't see a future for the Arab World without Africa, and no future for Africa without the Arab World because we have a common destiny and the challenges that face us are common. Therefore, we must work together to realize our dreams and interests; we must work on finding innovative and creative ideas. Africa represents the best partner for Arabs in the future." President Wade made important proposals to activate the Gulf-African relations, including:

- issuing special passports for businessmen from both sides and facilitating the procedures of entry visa to Africa and the GCC countries for this category;
-  establishing a development agency in African and Arab countries  to be responsible for founding joint projects between the two sides; these projects will be self-dependent in managing and operating joint investment projects and accruing abundant finances;
- Senegal is ready to host the Gulf-African investment conference in its next session.

Wade enumerated available investment opportunities in all African countries saying that West Africa enjoys huge economic advantages and that there are 15 countries in this region and more than 200 million people. West Africa possesses huge and diverse natural resources as it contains 89% of the natural resources in the continent. The Senegalese President referred to his country's efforts in the field of development saying that it has achieved self-dependence as to the requirements of rice within few years. The rate of illiteracy dropped from 89% to 40% and Senegal River is a huge source of fresh water capable of irrigating large areas of agricultural lands. For these reasons, the President invited the Gulf countries to invest in his country.

President Abdoulaye Wade emphasized the importance of Saudi support for his country saying that the Kingdom of Saudi Arabia is the second state providing support to Senegal and its efforts represent a model to be emulated in cooperation between Islamic countries. He added that Senegal and Saudi Arabia will work together to activate the Gulf-Africa partnership tin order to realize the welfare of nations and their interests.
Summary of Session Three

A number of commercial and economic officials in the GCC countries expressed their dissatisfaction with the level of existing exchange with African countries in spite of the immense potentialities available to the two blocs. They affirmed that African countries should diligently work on convincing Gulf investors to invest in them via projects that achieve sustainable development to both sides.

The third session of the Gulf-African Investment Conference 2010, which was organized jointly by the Saudi Council of Chambers of Commerce and Industry and the GRC, was convened at the King Fiaisal Conference Hall at the Riyadh Intercontinental Hotel, was chaired by His Excellency Dr. Hamad Al Baz'i, the Saudi Vice-Minister of Finance. The session affirmed that the legislations and protective regimes of African countries are inadequate. This reduces the size of the Gulf investments in the African markets and requires African countries to exert more efforts in order to provide a secure environment for the Gulf investments in particular.

On the other hand, His Excellency Ahmed Rashid Al-Haroun, the Minister of Trade and Industry in the State of Kuwait, emphasized that the historical relations that bind the GCC countries and African states go back to the dawn of Islam. However, aspirations in the economic and commercial fields are still lower than the desired levels in spite of the availability of all the potentialities necessary to establish close relations.

He explained that the Arabian-African cooperation is presently lower than ambition as it translates into no more than $25 billion of which $10 billion go to oil. He said that in spite of this, more cooperation and mutual investment opportunities, especially benefiting from the huge natural resource in the African countries in exchange for benefiting from the huge financial resources available to the Gulf countries, can be explored. This will achieve sustainable development to both sides.

He pointed out that the level of attendance and participation on the part of a number of African and Gulf states and organizations attest to the desire to reinforce present cooperation and work on developing commercial exchange, economic cooperation, and the search for the best possible and promising opportunities of investing in African countries.

He emphasized the need for African states to create an investment environment and climate to attract Gulf capitals and pointed out that the GCC States have a strategic aim as regards providing food security while African states have water resources and fertile agricultural lands that can accommodate the projects of cooperation between the Gulf countries and Africa in the near future. Ahmed Al Haroun, the Kuwaiti Minister of Trade and Industry, urged African States to work on convincing investors of the feasibility of investing in Africa and providing an attractive climate of security and investment to realize the common benefit of the two sides.

The Chairman of Qatar Chamber of Commerce and Industry, Sheikh Khalifa bin Jassim bin Mohammed Al-Thani, agreed to what the Kuwaiti Minister had said as regards the small size of existing trade exchange between the Gulf and African blocs and that it falls short of the true potentialities of both.

He asked why the Gulf-Africa relations did not achieve real growth proportional to the available potentialities with all the calls and efforts seeking to enhance relations between the two sides. Sheikh Khalifa bin Jassim answered saying there are a number of obstacles obstructing Gulf investments, including the  fact that African markets are connected to some international economic blocs, the fierce competition with countries having clear work strategies with the African continent such as China and the United States of America, the deterioration of economic conditions in many African countries, in addition to local conflicts, civil wars, high customs charges, exaggerated protective measures, and continuous volatilities in the exchange rates of currencies.

The Chairman of the Board of Qatar Chamber of Commerce and Industry went on to give the reasons for this saying they also include small investments by the Gulf funds of sovereign wealth in African countries and the instability of laws and legislations organizing Gulf investments.

Sheikh Khalifa bin Jassim Al-Thani explained that the picture is not bleak, but promising especially that reinforcing Gulf-African relations has become an urgent necessity imposed by economic developments. He suggested signing agreements to facilitate the Gulf trade with the most important African blocs, establishing a joint Gulf fund supervised by the governments to support Gulf exports to Africa, in addition to encouraging the foundation of investment companies in the agricultural field to achieve food security and encourage the Gulf banks to practice their activities in the African countries or open branches there. The Qatari official also suggested choosing some African states to become centers for sending Gulf products and investments to the rest of African markets.

Abdulaziz Hamad bin Al Aqeel, Secretary General of the Gulf Organization for Industrial Consulting, reviewed the role played by the organization in supporting the Gulf countries' trends to invest in the African continent. He said the organization worked since its foundation on propelling the wheel of industrialization in the Gulf countries and providing consultations and information, He added that one of the most important programs of the organization is the industrial investment program, which contributed to the foundation of several industrial projects in the Gulf countries.

He added that the size of demand on food products strongly posits the question of supporting the initiative of the Gulf countries to invest in the African continent in the fields of food industry and establish joint projects in this field to provide the requirements of the Gulf countries of food products; this will contribute at the same time to developing the economies of African countries. He said his organization works on translating the trends of the Gulf countries into programs of food security  via the projects of agricultural and animal production. He affirmed their support to these initiatives and their work on realizing them.

He revealed communications conducted by the organization with a number of African states and organizations such as the World Food Organization (FAO) in Khartoum to present investment opportunities in the fields of food industry. He explained that 10 opportunities will be offered to serve the Gulf-African trends. He announced the organization's readiness to provide its expertise in the fields of industrial investment to investors from both sides.

Summary of Session Four

The fourth session of the Gulf-African Conference 2010 was convened in the afternoon of Saturday in the King Faisal Conference Hall at Riyadh Intercontinental Hotel. The session affirmed the importance of financing and the role of regional organizations in developing investments and increasing trade exchanges between the African continent and the GCC States. The session emphasized the necessity of having the sovereign wealth funds in the Gulf countries and African states play their desired role in supporting and creating a climate of investment in these African countries. On his part, the Executive Secretary of Southern Africa Development Community (SADC), Tomáz Augusto Salomão, emphasized the importance of the role of regional organizations and communities in facilitating the tasks of foreign investors in Africa and also in supporting the gross product of African countries. He explained that the membership of SADC consists of 15 states of the countries of southern Africa. SADC has also created an atmosphere to capitalize on the available opportunities. However, he said in order for these countries to be able to benefit from their natural resource, they need more support and assistant. In this regard, he explained that these countries require supporting security to assist in developing investments and increase the size and value of trade exchange with other countries of which the GCC countries come in the forefront. Also, these countries need to tackle many challenges; on top of these challenges come poverty, the impact of climate change, weak infrastructures and communications. Moreover, these countries need to upgrade airports and increase the number of air flights between them and the rest of the world. He concluded by saying that in spite of poor services and infrastructure utilities in the countries of the African south, they have begun not a short time ago to establish infrastructure projects which have come to fruition and more of these projects will be accomplished in the near and foreseeable future.

Ebrahim Ismail Ebrahim, South Africa Deputy Minister of the Department of International Relations and Cooperation (DIRCO) talked of the importance of the Gulf-African cooperation. He said South Africa and Saudi Arabia have realized the importance of this cooperation a long time ago starting in the early 1970s. Presently, these two countries seek to make this relation an established and closer one. He explained that the Custodian of the Two Holy Mosques, King Abdullah bin Abdulaziz, is working on a closer cooperation between the Kingdom of Saudi Arabia and African countries in general and the countries of southern Africa in particular. This derives from the fact that Africa is achieving the highest rates of growth in the world in the present time and is one of the largest consumer markets in the world, too. Hence, Africa is seeking to establish strategic partnerships with several countries in the world and the GCC states are the first partner that African states are targeting to make their relations closer with.

Ebrahim Ismail Ebrahim maintained that strategic partnerships are among the best methods of consolidating cooperation and developing investments to set on progress in the continent that has lagged much behind economic development. Finally, he expressed his country's wish to host the next session of the Gulf-African investment conference.

On her part Erica Benet, the Ambassador of World African Diaspora Union (WADU) from the Republic of Ghana, affirmed the importance of the role of Gulf and African women in supporting bilateral economic relations between the Gulf countries and Africa and asserted that Gulf women have the ability to engage in successful investment and have past experiences that attest to this. She referred to the successful investment being implemented by Prince Al-Waleed bin Talal in Africa and proposed to a group of Gulf businesswomen participating in the conference to take the initiative of investing in Africa after taking into account the view of Prince Al-Waleed bin Talal provided that this initiative is to be made within the next month. In the same vein, Dr. Salem bin Nasser Al-Gudhea, the Economic Advisor in the Secretariat General of the GCC, reviewed the experiences of regional organizations in reinforcing the exploration of investment opportunities in the Gulf and African regions, He maintained that the Gulf funds of sovereignty wealth have succeeded in financing several projects in sub-Saharan African states. He explained that the Saudi Fund for Development gave aid to 41 African states, the Kuwait Development Fund contributed to establishing 118 projects in 40 countries and Abu Dhabi Fund for Development established several projects in Africa. He concluded by referring to the necessity of establishing new Gulf and African investment funds to launch and support productive and investment projects in the Black Continent, as well as financing African exports.

Summary of Session Five

The fifth session of the Gulf-African Investment Conference 2010, which was organized jointly by the Saudi Council of Chambers of Commerce and Industry and the GRC, was held on the second day of the conference. The session presented the course of encouraging and financing investment as a major and central issue in the Gulf-African relations. Through a number of subjects, the participants and speakers tried to identify the obstacles facing effective commercial and investment relations between the two sides, how to remove the obstacles and where the major opportunities of building strong economic relations between the two sides lie.

The session was chaired by Professor Mark Fuller, Chairman and Co-Founder of Monitor Group. The speakers included HE Dr. Ahmed Mohammed Ali Chairman of the Islamic Development Bank, HE Mr. Ahmed bin Mohammad Al-Ghanam Deputy Director-General of the Saudi exports program in the Saudi Fund for Development, HE Dr. Richard F. Tolbert from the Republic of Liberia, the Ugandan Minister of Investment, Ebrahim Patel the Minister of Economic Development in South Africa, and HE Dr. Alawi Shaaban Swabury of SADC.

At the beginning of the session, Professor Mark Fuller, Chairman and Co-Founder Monitor Group, spoke of the reasons that delayed Africa from benefiting from the Gulf and global investments. In this regard, he said that Africa had suffered for a long time from colonialism and its attendant international failure to support the African continent. It also suffered from coups, political instability and piracy. Africa also has a major problem of public relations as most African countries cannot market themselves in addition to the fact that it suffers from weakness in infrastructure, utilities and services.

Yet he said he was optimistic about the future of Africa, which is heading towards urbanization with 40% of its population living in cities, these constitute 80% of the economic value of the continent. He demonstrated that the Black Continent has witnessed an influx from China and other countries and, therefore, the Arabian Gulf countries must take initiative to invest in this important strategic region.

At the beginning of his speech, HE Dr. Ahmed Mohammed Ali, the Chairman of the Islamic Development Bank, thanked the Council of the Saudi Chambers of Commerce and Industry and the GRC for organizing the conference, which he described as important and central in the history of the Gulf-African economic relations. He said in spite of the geographical proximity and the immense opportunities available in Africa, the commercial relations between the two sides are very limited and represent 4% only. The Kingdom and the United Arab Emirates were among 20 of the greatest investing countries in Africa; the Kingdom came in the 12th rank and the UAE in the 17th.

He referred to a rise in the exports of the Gulf countries to Africa during the past two decades from $2.9 biilion in 1990 to $8.17 bilion in 2009 while the imports of the Gulf countries grew from $2.4 billion in 1990 to $11.6 billion in 2009.

In his speech, Ali touched on the fields of Gulf investments in Africa in the domains of agriculture, ports, communications, mining, industrial zones, and tourism. According to statistics released by the GRC, the Gulf countries invested round $15 billion in sub-Saharan African states, which went into building ports in Kenya, Senegal and Djibouti and other investments in different countries.

Dr. Ahmed Mohammed Ali limited the difficulties facing building effective economic relations between the two sides to the fact that several African countries lack infrastructures, which represent the backbone of economic activity and on which reinforcing trade and investment exchange between countries depends. In addition to this, there are the obstacles pertinent to shortage in human and institutional capabilities; this negatively affects the standard of the services necessary to establishing and implementing projects. Customs obstacles and unattractive investment climate constitute additional obstacles in the way of building strong economic relations between the Gulf and Africa.

He called on all national, regional and international actors to lay down a joint program to address these obstacles and proposed that the year 2020 a year to make the Gulf countries among the first ten trade partners of Africa.

He expressed their readiness in the Islamic Development Bank to employ their expertise, which extends over more than 36 years of cooperation with all the initiatives of governmental and non-governmental organizations alike on the level of chambers of commerce, businessmen union and all bodies to lay down a program to reinforce relations between the two sides, as well as devising mechanisms to implement this program and follow up its execution step by step.

He said that the Islamic Development Bank has implemented, and is implementing, developmental projects and programs in Africa whose estimated value is round $15 billon and these programs can be benefited from, including the program of the Arab Bank for Economic Development in Africa. This program is beneficial in supporting exports of Arab countries to all African states. He pointed out that the Islamic Corporation for Insurance of Investments and Export Credits (ICIEC) offers guarantees for the exports of member states to all African countries.

In the same session, Kajara Aston, Minister of State for Investment in the Republic of Uganda, called for convening the next session of he Gulf-African investment conference in Kampala. In this regard, he explained that his country has taken important measures to attract investments, including abolishing customs duality and is also studying abolishing customs tariffs with the GCC countries. He mentioned that his country is prepared to receiving large investments in the field of real estate, construction, infrastructures, roads and bridges, agriculture, tourism, communications, and electricity generation. He added that investment has a bright future in Africa; not only this, but Africa is regarded as the continent of the 21st century in the field of investment. He explained that his country needs cooperation in the field of oil and energy with the Gulf countries as it will begin producing 200,000 barrels per day as of 2012. However, he admitted that there are many difficulties facing African countries in the field of attracting foreign investments owing to weak political relations with most countries of the outside world, especially the Gulf countries, the multiplicity of languages and local dialects, and also the political instability that was witnessed by most countries of the continent in the last quarter of the last century. However, they hope to establish a partnership with the GCC countries in the coming stages to reinforce their economic capabilities, especially investment capabilities, develop education, and rehabilitate their national cadres in all fields.

In the same session, Dr. Richard F. Tolbert, chairman of the joint inter-ministry concessions committee in the Republic of Liberia, spoke of investment opportunities in his country. He said although his country is a small state in terms of area and number of the population, yet it has 9 million hectares of lands suitable for agriculture. Malaysian and Indonesian companies have actually begun agricultural investment by $13 million and they hope that the Gulf countries invest in their country in the agricultural field, especially in palm oil, cocoa, citrus fruits and rubber. Liberia also invites investment in the field of forestry as it possesses 40% of the remaining forests in Africa.

The representative of the Republic of Benin spoke in a similar way of his country's vision of developing its relations with the Gulf countries. In this regard, he referred to the fact that financing represents one of the most significant obstacles facing the exploitation of investment opportunities in his country. He asked the Islamic Development Bank to increase its activity in Benin with a focus on building a data base; he explained that Benin and the rest of African countries south of Sahara suffer from a shortage in data that borders on scarcity sometimes. He called on the Gulf investors to invest in his country, especially in the gold mines, gems, and minerals, in addition to agriculture and tourism.

On his part, Ahmed Mohammed Al-Ghannam,Director of the Export Program and Assistant to the Vice-Chairman and Managing Director, Saudi Fund for Development, addressed the role performed by the Gulf countries in the global economics, as the Kingdom represents one of the biggest 20 economies in the world with  a gross product in excess of $450 billion per annum. The Kingdom, and the Gulf countries in general, is characterized by a suitable investment climate and a competitive business environment. The Kingdom occupies the 19th rank in terms of these two qualities and the 15th rank among the largest exporters of goods in the world. Moreover, the Saudi banking sector is very strong.

He added that these capabilities enabled the Kingdom to attract foreign investments from different countries in the world. The Gulf-African Investment conference is organized in consistence with this as the conference is meant to reinforce the relations between the Gulf and African states. He said that the Saudi Fund for Development is the major channel of providing loans and credit facilities in the Kingdom. Its objective is to contribute to financing development and infrastructure projects. Among the important projects of the Fund is the program of supporting national exports; this finances Saudi non-oil exports and develops trade exchange with friendly countries.

Al-Ghannam also spoke of the economic activities of the Fund in Africa where the value of the soft (interest free) loans offered by the Fund until the end of 2009 amounted to nearly 15 billion Saudi Riyals. Also, the Kingdom provided through the Fund free grants of more than 18 billion Saudi Riylas. These grants contributed to establishing projects for digging wells, fighting diseases and implementing other schemes. The Fund credits allocated to national exports exceeded 16 billion Saudi Riyals; several banks and importers in 45 countries benefited from these credits. Africa had had the greatest share of these credits.

He explained that the investments of Saudi private sector are estimated at 4.6 trillion Saudi Riyals. To reinforce these investments, the Kingdom formed several committees and convened conferences, including the Saudi-East African Forum in Ethiopia. The Kingdom also encouraged agricultural investment in Africa in the framework of the initiative of the Custodian of the Two Hoy Mosques for agricultural investment abroad in order to identify the opportunities of agricultural investment in Africa.

Al-Ghannam said that the efforts of reinforcing the Gulf-African relations clash with a number of obstacles, including lack of investment attractive regulations, especially those pertaining to allocation of investment lands and protection of the rights of investors, protracted and complicated customs and trade procedures, poor systems of governance and weak infrastructures in many African countries.

To overcome obstacles, Al-Ghannam said that work must develop investment regimes and laws and increase cooperation between the Gulf and African countries via implementing joint projects and investments, developing cooperation in the field of human resources development, signing joint agreements, encouraging regional economic integration, liberalizing trade, removing obstacles, and the optimal exploitation of natural resources and the competitive advantages of the African countries.
Moreover, there is a need to develop and encourage the role of the banking sector to enable it to offer facilities and guarantees to financing development, economic, and investment projects in the African continent. Embassies must play a role in providing information, removing obstacles impeding investors, and facilitating visit procedures for trade delegations.

Finally, we extend our thanks to the Custodian of the Two Holy Mosques for having been the patron of this conference. We also extend our thanks and appreciation to the Crown Prince HRH Prince Sultan bin Abdul Aziz, and to HRH Prince Nayf bin Abdul Aziz, second Deputy Prime Minister and Minister of Interior, and to HRH Prince Salman bin Abdul Aziz the Governor of Riydh Province.

 

The Working Group on Trade: Session Summary

The working group on trade heard presentations make by H.E. Abdullah Al Hemoud (Deputy Minister of Foreign Trade, Saudi Arabia), H.E. Dr Sidi Ould Bebaha Ould Tah (Minister of Economic Affairs and Development, Mauretania), H.E. Albert Besse (Minister of Finance and Budget, Central African Republic), H.E. Mahama Ayurgiga (Deputy-Minsiter of Trade and Industry, Ghana), and Dr Prosper Honest Ngowi (Mzumbe University, Tanzania). Account was also taken of the presentation of H.E. Ebrahim Patel (Minister of Economic Development, South Africa) to the plenary session.

In the presentations and the subsequent discussion, the following points were given prominence:

1. The promotion of trade must be linked to the promotion of investment (especially that of Gulf states/organisations/companies in Africa). The current low level of African imports to the GCC (comprising only 1.7% of total Gulf imports) can not be substantially increased solely through measures which facilitate the flow of goods and services. Investment in productive fields (especially in the food-producing and food-processing sectors), and in the infrastructure which will enable African products to reach GCC markets will be needed. This is the key element required for strengthening trade flows.

 

2. Substantial complementarity exists in the trade/investment nexus between the two sides. The GCC currently imports some $13 billion worth of food per annum. Given that food production in some GCC states is being reduced (due to environmental concerns) and demand is increasing, the need for food imports is bound to increase. Africa has the potential to supply a significant part of the GCC’s needs in basic food commodities. To realise this potential, however, Africa need substantial investment in infrastructure and productive activities. The GCC needs to be diversifying its investments globally, and Africa constitutes a valuable target for such diversification: a significantly higher rate of return can be expected than from investments in OECD countries, with a strong prospect of continued growth.

 

3. There were differences among speakers/participants as to whether Africa is “ready for enhanced investment/trade” or whether significant legislative and other changes need to be made before the investment/trade relationship can take off. There was general agreement that the expansion of the relationship is currently being held back by a high degree of ignorance on both sides as to the basic situation and arrangements of the other. A wide range of measures were proposed to enhance mutual knowledge and understanding: more trade missions, joint business workshops, bilateral business committees, expanded activities by embassies in spreading commercial and investment information, more aggressive promotion of export and investment opportunities by governments etc.

 

4. It was also suggested that close attention should be given to the development of free trade areas (especially on a region-to-region basis, GCC-ECOWAS, GCC-COMESA etc), the development of trade finance within a framework which would take account of the particularities of Africa’s situation (and would therefore be different from the trade finance currently supplied by international financial institutions), investment in African infrastructure (roads, port facilities etc) in a framework linked to productive activity (thereby making trade possible/easier). Particular emphasis was placed on the role which the King Abdullah Initiative for Agricultural Development could play in the future, although some African participants had found it difficult to secure quick responses from the organisation.

 

5. There was a conviction that the African and GCC states had common concerns with regard to global trading and investment issues. They should work together in negotiations over the Doha round, and other international fora. A coordinated plan for joint action is needed.

 

Working Group 2:  Agriculture

 

Presentation Summaries by the Moderator: Dr. Hamad Al-Sheikh

Dr. Hafez Ghanem, Assistant Director-General
Economic and Social Development Department
Food and Agricultural Organization of the United Nations (FAO)

 

Comprehensive national and regional food security strategies are necessary to address the particular food security problems of the Gulf.  Increasing food supplies from abroad through trade or investment will continue to be key strategic elements for the Gulf; however, they should also seek to improve transparency, efficiency and reliability of markets.  FDI in Africa can be a “win-win” arrangement, but must be done right, and in partnership with host countries.  There is a need to reconcile the investment objectives of investors with the investment needs of developing countries.  Land acquisitions may not be necessary of desirable—other forms of investment such as contract farming and out-grower schemes, can offer secure supply with less economic and political concerns.  Investments could be in infrastructure and institutions, which currently constrain much agriculture in developing countries.  Care must be taken in the formulation of contracts and the selection of suitable business models.  The perceived risks attached to FDI have led to calls for an international code of conduct to regulate them; thus, FAO, UNCTAD, the World Bank and IFAD have drafted the Principles for Responsible Investment that Respects Rights, Livelihoods and Resources.  Definition of principles is the first step, forming a basis for an inclusive and comprehensive consultative process, to which the FAO is fully committed.

 

Mr. Baba Dioum, General Coordinator
Conference of West African Ministers of Agriculture

 

The Comprehensive Africa Agriculture Development Program (CAADP) is at the heart of efforts by African governments under the African Union (AU)/New Partnership for Africa’s Development (NEPAD) initiative to accelerate growth and eliminate poverty and hunger in Africa.  The main objective of CAADP is to help African countries reach economic growth through agriculture-led development, enabling the expansion of exports.  Business cooperation between African and Gulf countries should be based upon the rules of international trade and regional associations, and could extend to joint discussions to achieve strategic storage according to mutual interests.  If the CAADP strategy is implemented, particularly with regards to the extension of cultivated land, water management, development of agricultural markets, and the generation and dissemination of technology, there would be an increased supply of African food products, resulting in long-term supply for the Gulf.  To do this, we should focus on managing natural resources in order to mitigate the impact of climate change.  Targeted investments from the Gulf would improve the supply to local and emerging markets, including Gulf countries, such as through Public-Private Partnerships and Private Alliances, where the rules would be defined by harmonizing market standards, and improving the legal and regulatory framework.

 

Dr. Teunis van Rheenen, Coordinator for Partnerships and Senior Research Fellow
International Food Policy Research Institute

 

(1) By raising productivity, investments in agriculture contribute to growth and poverty reduction in Africa.  The potential for increasing agricultural production in Africa is huge, but a green revolution in will require reforms and investments that have to be country specific.  In GCC states, increases in food imports will rise dramatically, and it will be important to adopt a modern definition of food security that goes beyond food self-sufficiency.  (2)  If Africa’s huge potential is unleashed, it can become a net exporter of food.  However, some basic criteria must first be fulfilled, including surplus production, strategic infrastructural investments, engaging with local stakeholders, and building upon ongoing initiatives, such as CAADP.  (3) Investments that contribute to agricultural productivity attack poverty from specific directions, and reduce it overall.  Investments, however, should go beyond the agricultural sector and include food processing, especially through the private sector.  (4) Investments need to have strong “win-win” characteristics, e.g. through the creation of joint ventures.  “Business as usual” is urgently needed to enhance food security, which implies investing in agriculture and social protection; adopting a country-led, bottom-up approach is necessary; policies must be designed using evidence and experiments; and commitments must be honored.  Moreover, investments in country strategies are important for long-term sustainable development, such as IFPRI’s network of Country Strategy Support Programs.

 

Dr. Mahendra Shah, Director of International Affairs Program
Qatar National Food Security Program

 

This presentation consists of 38 pages of Power Point slides, with detailed statistics, graphs, flowcharts, and maps from the Qatar National Food Security Program’s research on enhancing domestic production and international agricultural investments.  The aim of the presentation was to illustrate the importance of improving self-sufficiency using a sustainable production model, as well as securing external sources of supply through import diversification and intelligent investment strategies within the supply chain, including secured imports and storage.  Developing partnerships and contract farming through Qatari investments in Africa, was presented as a way to establish food security and promote sustainable agriculture.  A series of slides explored various aspects of land cultivation in sub-Saharan Africa, and prospects for Gulf investments there.  Concluding remarks included emphasizing the creation of job opportunities for nationals, reducing pressures on current cultivated land, the importance of joint-venture partnerships with investors and land-lease rental valuations, as well as highlighting the need to consult pertinent, comprehensive and timely information, expert advice, and multilateral organizations.  

 

Mr. Mark Cackler, Manager of Agriculture and Rural Development Department
The World Bank

 

Agriculture is basic element of poverty reduction, economic growth and environmental sustainability in the 21st century.  Various types of shock have caused food security to resurface as a global issue, e.g. the food, fuel and commodity price crisis of 2006-2008.  In retrospect, we should not have been surprised when food prices spiked, nor that the 2008 spike led to both social unrest and export restrictions.  The food price “crisis” of 2008 is not over—the number of hungry people has been rising, and the challenges of food supply and demand are compelling.  “Food security” is the situation that exists when all people, at all times, have physical, social and economic access to sufficient, safe, and nutritious food that meets their dietary needs and food preferences for an active and healthy lifestyle.  Agriculture remains an engine of economic growth, and growth from agriculture is especially effective for poverty reduction, but rising commercial pressure on productive resources cause alarm about a wide range of developmental risks.  So, to be productive and sustainable, agro-investments must be done right.  Principles of Responsible Ago-Investment:  (1) land and resource rights, (2) food security, (3) transparency, (4) consultation and participation, (5) economic viability and responsible agro-enterprise investing, (6) social sustainability, (7) environmental sustainability.

 

H. E. Abdulazia al-Ageel, Secretary General
Gulf Organization for Industrial Consulting (GOIC)
State of Qatar

 

The importance of the Gulf-Africa Investment Conference lies in linking the strategic approach of the GCC states with the economic objectives of African countries.  Since 1976, the GOIC has worked to bolster industrial development in the GCC, providing consulting services through specialized programs, such as the important Industrial Investment Program.  GOIC supports opportunities in strategic economic sectors of the GCC, such as small and medium industries in petrochemicals, metallurgy and food products; food industries consists of about 12% of investment opportunities.  The demand for food products in GCC states is increasing, and is expected to double by 2010.  To face the widening food gap, along with the continuous increase in commodity prices, GCC members created the Food Security Program.  GOIC is linking its investment programs and activities to these trends, in the form of Food Security Plans.  The promotion of food manufacturing will be linked to strategic agricultural investments by GCC states, in cooperation with African states.  GOIC is working to establish contacts with concerned African parties, such as the Arab Authority for Agricultural Investment and Development in Sudan, and other similar opportunities in the field of production.  GOIC is fully capable and willing to cooperate with investors from both the public and private sectors, such as those who desire feasibility studies.  

 

Dr. Abdullah A. Al-Obaid
Deputy Minister for Agricultural Research and Development Affairs
Kingdom of Saudi Arabia

 

Dr. Al-Obaid represented King Abdullah’s initiative for agricultural investment abroad.  His presentation delineated the principles upon which the initiative is based, the primary targeted countries, the eight agricultural products covered, and the responsibilities of the stakeholders.  Dr. Al-Obaid emphasized the corporate responsibilities of investors towards the countries invested in, which coincide with those outlined by the World Bank. 

General Summary:  There are clear “win-win” opportunities in agricultural investment between African and GCC countries.  These opportunities, if properly managed and developed, could result in huge positive benefits for all parties, as well as the world, through increased food security.  On one hand, Africa has bountiful land, labor, and water resources that are underutilized or idle, and lack financial resources.  On the other hand, GCC countries lack arable land, labor, and water resources, but have plentiful financial capital in search of opportunities for investment.  For African countries, this represents an opportunity to increase the productivity of their economies, through GCC capital and management resources harnessing underutilized labor, land and water, in order to advance development.  Capital needs security to move from the GCC or international markets to Africa, hence it will not do so unless African countries have: (1) institutional stability, (2) political stability, (3) freedom of movement for capital, (4) freedom of movement for inputs and products, (5) transparency of laws and regulation.  There is a need to work out these fundamentals between the GCC countries and Africa, in order to promote development properly. 

 

    

              
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