Attracting private capital to fund Africa’s economic development is a top priority for governments across the continent, according to industry experts speaking at the Global Business Forum Africa 2021 in Dubai on Wednesday.
GBF is a high-level business forum organised by the Dubai Chamber in partnership with Expo 2020 Dubai, which featured a thought-provoking session titled ‘Fuelling Innovation Through Strong Capital Markets’. This panel examined the essential role of capital markets and trade agreements in driving economic development, as well as the invaluable expertise and support that the UAE companies can offer their African counterparts.
Participating in the discussion were Miguel Azevedo, Head of Investment Banking – Middle East and Africa, Citi, UAE; Paul Kavuma, Chief Executive Officer, Capital Principal Partners, Kenya; and Megan McDonald, Head of Client Coverage, Wholesale Banking, Standard Bank Group, South Africa, with the three panelists discussing – among other issues – the impact of the pandemic on capital markets in Africa.
“I actually believe the whole COVID situation is a bit of a blessing in disguise. We were not having a great run in terms of capital markets across Africa before. What this has accelerated in Africa is digitalisation, generally speaking, and we have seen quite a few great stories emerging in the last few years of great companies that want and can go public and put for a country on a continent to have a successful capital market,” said Miguel Azevedo.
“It’s been a bit of a two speed development of capital markets in Africa. It’s gone through phases pre-pandemic of seeing a lot of issues in the debt capital markets, for example, from sovereigns issuing euro bonds, cross-border reaching record levels in 2018-2019, but that was really the way that was being led by the sovereigns, and then we started to see some of the corporates coming to market. That kind of all hit a big pause in 2020, when you see a number of the African governments retreating from the capital markets and instead going to the IMF and the World Bank for funding support,” said Megan McDonald.
“There have been some bright spots. There have been certain sectors which really have benefited from this, such as health care, the more defensive sectors, technology, digitisation… all those things are presenting new opportunities,” said Paul Kavuma.
Also read: Mozambique the main destination of FDI in East Africa – Dubai Chamber’s ‘Why Africa?’ initiative
In a one-on-one session at the forum, Wamkele Mene, the first Secretary-General of the African Continental Free Trade Area (AfCFTA), discussed what the agreement means not just for Africa but for the entire global economy in the wake of the pandemic.
“International investors realise that the value that AfCFTA is bringing to the table is priceless, facilitating the entire investment operations in the African states through representing a comprehensive illustration of the investment environment in Africa. We have ambitious targets, and we are optimistic about what the future holds for our rich continent. We are confident that Africa has a lot to offer for its investor as well as foreign investors,” Kavuma said.
During another session, titled ‘The Evolution of Global Trade’, participants highlighted the need to accelerate procedures for economic integration between the African states taking part in AfCFTA and addressing any obstacles hindering its success. They also reiterated the importance of establishing comprehensive economic partnerships regionally and to benefit from Dubai’s leading position as a trade gateway connecting Africa to the world.
GBF Africa 2021, held under the theme Transformation Through Trade, concludes today (Thursday, October 14). The event is taking place at the Dubai Exhibition Centre, located at Expo 2020 Dubai.