Viewpoint : President Alassane Dramane Ouattara
Today, the African continent is home to 60% of the world’s arable land. It has abundant energy resources ranging from hydrocarbons to renewable energies. In addition, four of the world’s 10 most dynamic economies, including Côte d’Ivoire, are on the African continent. By 2050, one in four people of the globe’s population will be African and the workforce from Africa will be the largest in the world. In order to take advantage of this potential for sustainable and inclusive growth, and to provide more opportunities for our growing young population, we need to accelerate the pace of investment on the African continent. We must target investment in areas such as education, health, safety, industry, new technologies and, most importantly, infrastructure development. This also includes significant sub-regional projects in the transport and energy sectors to encourage regional integration.
This is what we have undertaken in Côte d’Ivoire, by allocating more than a third of the government’s annual budget to social spending, particularly in the areas of education and health, with a focus on gender equality, compulsory education up to the age of 16, education and vocational training and universal medical coverage. In terms of water supply, in five years, from 2011 to 2015, Côte d’Ivoire produced as much drinking water as in the 50 years since its independence. The country has also increased its energy capacity by 38%, from 1450 MW in 2011 to 2000 MW in 2016. Today, the country exports electricity to seven countries in the sub-region. Our goal is to become the energy hub of our region and to double the capacity to 4000 MW by 2020, including renewable energies. We are convinced that without good access to electricity, industrialisation is not possible; likewise, households, schools and hospitals cannot function effectively. However, this is not enough and we must continue to accelerate investments.
According to the World Bank, Africa needs annual investments of about $93bn to meet its infrastructure needs. In light of this, the question of financing these indispensable investments arises. In this context, we need, in addition to development finance institutions like the African Development Bank, to focus on accelerating the mobilisation of domestic resources. With a tax-to-GDP ratio of around 17% compared to 36% in OECD countries, Africa must improve its tax collection to finance its development with its own resources. We also need to focus on improving the business climate to attract domestic and international private investment, including public-private partnerships and private equity. The “Doing Business” report demonstrates that African leaders are already striving to ensure consistency, predictability and stability in their public policies to create an enabling environment for investment and business.
The development of a sound and diversified financial sector and the increase of the domestic savings rate, both private and public, is also needed in order to increase the amount and the duration of the loans, necessary for investment in infrastructures. Lastly, we must mobilise institutional capital. According to the African Development Bank, African pension funds and sovereign wealth funds are valued at $334bn and $164bn respectively. The mobilisation of these institutional investments in infrastructure, in particular pension funds estimated at $1trn by 2030, would greatly contribute to realising our growth potential. In addition, we must eliminate the bottlenecks that delay the implementation of such projects. These include improving governance, public sector human resources, project feasibility studies and project implementation rates.
In this regard, I encourage you to come and invest in Côte d’Ivoire. It is a country where peace and security are ensured. A country filled with potential and opportunities, with a prosperous business environment for the private sector and a sound macroeconomic situation, where visions and strategies can effectively be transformed into concrete and coherent actions.
The above is adapted from a speech given at the 2017 Business for Africa Forum in Sharm El Sheikh, Egypt.
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