Mining Indaba: Tony Blair waxes lyrical while China is nowhere to be seen
- Marianne Thamm
- South Africa
- 11 Feb 2015 02:17 (South Africa)
While the press corps grumbled about not being allowed to film or record the “distinguished keynote presentation” by former British Prime Minister, Tony Blair, at the Investing in Africa Mining Indaba yesterday, the biggest investor on the continent, China, is conspicuous in its absence. By MARIANNE THAMM.
According to a recent John L. Thornton China Centre/Africa Growth Initiative Paper by Yun Sun, a fellow at the East Asia Program of the Henry L. Stimson Center, in 2009, China had surpassed the US as Africa’s leading trading partner.
Sun found that by the end of 2009, 45.7 percent of China's cumulative foreign aid of ¥256.29 billion had been given to countries in Africa and that in 2012, China's trade with Africa had reached $198.5 billion, while US-African trade in 2012 was $99.8 billion.
Further statistics from Sun’s paper were that Africa made up only five percent of China’s global trade and that in 2011 more than 80 percent of China’s $93.2 billion in imports from Africa were crude oil, raw materials and resources. South Africa is China's largest trading partner in Africa, at a volume of $20.2 billion.
On the other hand, according to a KPMG Merger and Acquisition FDI Into Africa’s Mining 2013 report, the UK had invested only $4.1 billion from 2010 to 2012.
It is odd, then, that China, as one of the world’s leading investment players in Africa, should be so totally absent from the Investing in African Mining Indaba currently on at the Cape Town International Conference Centre.
It’s a bit like the hugely popular person who doesn’t get invited to the party where everyone else gets to have fun and talk about him/her. But perhaps it is because it is the Chinese New Year or maybe it is because China has its own Indaba – Mines and Money (to put it right out there) - to be held this year between March 23 and 27 in Hong Kong.
Be that as it may, that former British Prime Minister, Tony Blair, had been selected also to give the event’s “distinguished keynote presentation” perhaps speaks to the political and economic prism of this particular conference. There were those, however, who wondered out loud whether anyone would dare to make a citizen’s arrest of Blair, who could still face war crimes charges as a result of a British Iraq War inquiry report by Sir John Chilcot.
Blair has reinvented himself since his term of office (between May 1997 to June 2007) and his Africa Governance Initiative (AGI), established in 2009, now advises the presidents of Nigeria, Senegal, Sierra Leone, Liberia, Guinea and Rwanda where “a full AGI staff works at the centre of these governments.”
It is this experience working in Africa that Blair brought to his address.
The former UK prime minister, who described himself as an “Africa optimist”, said that his work in these countries had given him a perspective on Africa, its future and challenges and the difference between success and failure on the continent. He reminded the audience that ten out of the 50 top growing economies in the world were in Africa, this despite the fall in commodity prices.
“Growth in Africa should be around five percent. The middle class set to double in the next decade and population growth will double over the next 20 years. FDI is up by many multiples.”
He said relationships between north and south had changed from one of “donor” and “dependence” to one of “partnership” and there was a move, particularly in the extractive industries like mining, from mere transactions to the idea of relationships.
“Governments want something deeper and richer with those coming to invest in their country.”
He said the composition of African economies was changing both in terms of GDP and FDI.
“For example, in Nigeria’s economy today, 60 percent is in services. Tourism in Africa has tripled over the past decade. This year in telecoms and technology, retail and financial services, they will take a bigger share of FDI than mining and extractive industries. However, having said all of that, the mining sector remains absolutely vital for Africa’s future and even with the sharp declines in prices, there are tremendous opportunities and there will be, no doubt, an adjustment and reshaping of the face of mining within Africa over these next few years.”
New players, like China and India, who did not feature on the continent ten years ago, also reflected the changing geo-politics round Africa.
“What China will put into infrastructure this year in Africa will be more than the entirety of that put in by the international financial institutions,” he said.
These infrastructural developments were part of trend in Africa and new investors were looking for partnerships and co-operation with governments that went beyond just the investment infrastructure.
One of the key investments, he said, was power and electricity – the “single most important precondition for a country’s success”.
“Electricity is needed for business to develop, for education for a country to be connected to the world,” he said.
Future investments in Africa, Blair added, would also have to benefit local business and countries would go a long way to achieving this through reforming education and improving skills so that companies “are not left with a situation with obligations for local content and no realistic way of meeting that.”
Transparency and corruption were also key principles to investment on the continent and rules that now governed investment, some of which were “eye-wateringly tough”, made it impossible to access “high quality investment from the west” where there was corruption on either side of the deal.
African countries also needed to ensure predictability in taxation for a long-term investment, he added.
In his experience, the single biggest differentiator between success and failure, not just in Africa, is the quality of government.
“Not just transparency and honesty, but its effectiveness and its ability to get things done. This is a challenge for any government in the world. One of the first things you learn when you come into office as a Prime Minister or President, and one of the odd things of my profession, unlike others, where you put someone in at the top with experience, is that my profession is the only one where you come in and then you are just there.”
Running a country was like being a CEO, he said.
“You could be the world’s greatest communicator but once you get in office…you have to implement and saying is a lot easier than doing.” DM
Photo: Quartet Representative to the Middle East and former British Prime Minister Tony Blair attends the International donors conference on financing the reconstruction of the Gaza Strip in Cairo October 12, 2014. REUTERS/Mohamed Abd El Ghany