Friday, January 14, 2011

Africa doesn't need favours, says Mo Ibrahim

The Sudanese founder of the Mo Ibrahim Foundation says investors are finally getting 
the message that there is money to be made in Africa, where there is much more capacity 
for growth than abroad.

The Africa Report: Do you think the downturn has focused attention on Africa?

Mo Ibrahim: The message slowly is filtering through. Here in Africa – this is the real economy. We don’t have fancy products – we don’t have CDS [credit default swaps], all the things that caused the crash – we don’t have those here. If you want to invest in the basic economy where there is real money, you come here, to Africa. What you see is what you get, and we are not bothered by downturns. Even in times of plenty, those guys don’t come to invest here in any case.

So we don’t care, and we don’t want favours. In fact, we are offering investors favours. If you are stupid enough not to see it, that’s your problem. One day, you will see the light. I made all my money here. I made millions and billions investing here. If you want to waste all your money in American real estate, that’s your business.

So where to invest now in Africa, and how?

[My businesses] are in real estate, we are in financial institutions, in agriculture ... Africa is hungry for services and products. Three-quarters of our people are young people. People need everything. We are pushing for the rule of law, we are fighting against corruption. We don’t pay bribes. Africa is rich, but we have mismanagement of our resources. We need good governance, and that’s what we are fighting for. The right policies and transparency are essential. It’s not about asking the US for more money or China for more money. We have everything we need right here. 

Does a middle class help?

A middle class will emerge. It won’t rain from the sky, we have to develop it. And investment will follow. We will get it by education, but we have got to get serious. We have wasted 50 years. Enough is enough. 

There is a consensus that Africa needs roads and power, but how do you attract investment into infrastructure when it is harder to get returns in those sectors?

Only by example. I built infrastructure in Africa. We got 850% return on our investment. Of course, building a power plant is not the same as telecoms, but you will still get a return. And actually it is better because you sign a contract before you even start. If I am building power stations here, I sign a contract with the government saying they will buy all my power at this price. I have already got my money back, guaranteed. This is a low-risk, lower-return operation. People will still invest at a 3-4% return.

How can trade between African countries be boosted and what is holding it back?

We need to trade with each other more. Look at Europeans, how much inter-European trade is happening compared to how much trade is taking place between African countries. It is time to start to build this infrastructure linking us together. Otherwise we will be tiny, weeny, sub-scale countries, not viable and unable to compete in this world.

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