President Paul Kagame has debunked the mentality that Africa must always look to western countries for funding of major long-term initiatives, saying that the continent is not as poor as it is presumed.
The President was speaking yesterday at the opening of the Transform Africa Summit 2018 underway at the Kigali Convention Centre.
With the Single African Digital Market and other initiatives requiring capital injection, President Kagame called for efforts to mobilise private African capital to participate in the projects.
“We must work harder to ensure that African private capital is mobilised to participate fully in major projects on the continent,” he said.
Kagame said that there is a myth that Africa lack ability to fund major investment projects and has to turn to the West which he said is more of a mindset problem.
The African continent loses billions of dollars through illicit financial flows while a section of its citizens have assets invested abroad, he said.
“There is this myth that we always have to look outside the continent to fund major initiatives. But this simply can’t be true, when Africa is losing billions every year through lost taxes, sending private assets abroad, and other factors. We are not poor, not at all,” he said.
The ‘Africa is poor mindset’, he said, has led to majority of Africans leaving strategic long-term investments to others.
“The issue is more the mindset that it is normal to use our money for consumption while we leave strategic long-term investing to others. It means that, no matter how much we earn, we would remain poor. Whether this comes from colonialism or not is irrelevant. It is up to us to identify mindsets that hold us back as a continent, and change how we do business,” he said.
A majority of infrastructure projects and investments from across the continent are often funded by capital from outside Africa which is often at high interest rates.
The process of building a single African digital market and initiatives such as the African Continental Free Trade Area, he said, also requires political will from African governments as well as commitment from the private sector.
“Political will, both from governments and the private sector, is essential in implementing the African Continental Free Trade Area. This agreement will transform Africa, but only if we translate its provisions into reality on the ground,” he said.
The continent, he said, also ought to have a favourable investment climate to build trust among investors as well as attract the right partnerships to drive the required innovation.
Kagame said that favourable investment climate should not be limited to achieving good rankings in indexes but should also extend to reaching out to global markets.
“A favourable investment climate is critical in order to build trust in African economies, attract the right partnerships, and spur innovation. Indeed, many African countries are already among the leaders in business-friendly reforms. But achieving good rankings is not an end in itself. The goal is to attract more and better investment, and that requires effectively communicating these facts to global markets, and even to our own investors right here in Africa,” the President said.
Going forward, he said that the continent could borrow from efforts by the African Union and the International Telecommunications Union, together with the private sector, to rollout broadband to under-served communities by harmonising spectrum and standards.
Jared Cohon, President Emeritus and University Professor, Civil and Environmental Engineering, Public Policy at Carnegie Mellon University, said that achieving a single digital will, among other things, open economies leading to impacts such as job creation.
Dr Hamadoun Touré, the Executive Director of Smart Africa Secretariat, said the membership of the Smart Africa has grown from 22 to 24 members – as Ghana and Zambia have since joined – which would further add momentum to the initiative.