1 Norwegian Ministry of Trade and Industry 29 September 2011, 09:00 AM Minister of Trade and Industry Trond Giske Time: 15 minutes - Words: 1,393
Look to Africa! Introductory remarks by Minister of Trade and Industry Trond Giske at the African-Norwegian Business Summit, in Oslo on 29 September 2011 Check against delivery [Slide #1 – Intro slide]
Excellencies, Distinguished guest, ladies and gentlemen:
One of my first encounters with Africa came through reading the memoirs of a Danish Baroness – who made Africa her home for 17 years.
I am course talking about Karen Blixen’s “Out of Africa”, published in 1937.
Later I learned that the title of Karen Blixen’s book is derived from an old Latin proverb. It translates into English as: “Out of Africa, always something new.”1 [Slide #2 – Traditional news covers on Africa]
And out of Africa, the common observation goes, there is always something new.
Take a snapshot of the main new stories of the past 12 months: Into mid-2011, the world’s worst food crisis is being felt in East Africa; in Ethiopia, Somalia and Kenya;
1
”Ex Africa semper aliquid novi.”
1
2
the crisis in Libya comes in the context of wider unrest throughout the Middle East and North Africa; and following elections in Cote d’Ivoire in October 2010, the situation became volatile, violent outbursts turned into the country’s second civil war.
We are all too familiar with the bad news coming out of Africa.
And no wonder: For as long as I can remember, newsflash from Africa were almost always about hunger and starvation, war and conflict, poverty and disease. [Slide #3 – Good news from Africa]
Yet the real story is certainly about the upsides: In July of last year, the UN Secretary-General Ban Ki-moon noted that only four African countries were embroiled in armed conflict, compared with 14 at the end of the 1990s.2 In 22 countries of sub-Saharan Africa, the HIV incidence rate declined by more than 25 percent between 2001 and 2009, UNAids reports.3 And the most under-communicated newsflash is this: Africa is currently one of the world’s fastest-growing regions in the world. From 2000 through 2008, the African continent’s real GDP rose by 4.9 percent a year – more than twice its pace in the 1980s and 1990s.
2
Report of the Secretary-General to the 65th session of the UN General Assembly, 20 July 2010 (A/65/152S/2010/526*. 3 Source: UN Aids, September 2011.
2
3
To be sure: Many of Africa’s 50-plus individual economies still face serious challenges; including poverty, disease, and high infant mortality. Yet, powered by a decade of growth, and enabled by political and social stability – in more and more countries – the African continent’s future looks very, very bright.
*** [Slide #4 – GDP growth rates in 2015 - annual percent change]
It once was the case that when the first world caught a cold, the developing world caught the flu.
Those days seem to be over. With the European Union and the United States still in the doldrums; developing countries are growing faster than the industrialised world. The IMF forecast that they will grow between 6.1 and 6.4 percent this year and next. 4 The rate for the advanced economies, in contrast, trails at only 1.6 percent. And going forward: IMFs predictions for 2015 show a clear gap; advanced economies growing at 2.7 percent – emerging and developing economies growing at 6.7 percent!
*** [Slide # 5 – Jim O’Neill]
4
Source: IMF World Economic Outlook, September 2011.
3
4
One of the first people to talk about power shifts in the international economy was the British economist, Jim O’Neill.
In 2001, he introduced the BRIC term.
When visiting Oslo in March, he said:”When people talk about the global credit crisis, the BRIC countries talk about the North Atlantic credit crisis.” [Slide #6 – World’s ten fastest-growing economies]
Much has been said about the rise of the BRICs – Brazil, Russia, India and China – and the eastward shift in economic power.
Yet over the past decade – from 2000 to 2010 – no less than six of the world’s ten fastest-growing economies were in sub-Saharan Africa. The only BRIC country to make the top ten was China – in second place behind Angola. The other five African sprinters were Nigeria, Ethiopia, Chad, Mozambique and Rwanda – all with annual growth rates of around 8 percent, or more. On IMF forecasts, Africa will grab seven of the top ten places over the next five years! It is no understatement: Africa is – at last – becoming an integral part of the world economy.
*** [Slide #7 – Kagame]
4
5
Speaking in Paris earlier this month, Rwanda’s President Paul Kagame was upbeat about Africa’s future.
He said [and I quote]:
“In Africa’s case, the economic performance in the last decade gives the continent a unique opportunity to claim a more active role and a stronger bargaining position in the global arena.”
***
[Slide #8 – Africa, today and tomorrow]
Kagame’s optimism is backed up by strong and reliable predictions:
First of all, Africa will continue to profit from rising global demand for energy, minerals, food and the like: As a result, Africa’s collective GDP will continue to rise – from 1.6 trillion in 2008 to 2.6 trillion in 2020, McKinsey predicts.5 Standard Chartered forecasts that Africa’s economy will grow at an annual rate of 7 percent over the next 20 years – even faster than China’s.6
Second; urbanisation, an expanding labour force, and the rise of the African middle class will create engines of growth.
5 6
Source: McKinsey Global Institute, June 2010. Source: The Economist, ”A more hopeful continent - The lion kings?”, 6 Jan. 2011,
5
6
If recent trends continue: Africa’s consumer spending will reach 1.4 trillion USD by 2020.7 By 2040, Africa will be home to one in five of the planet’s young people – it will have the world’s largest working-age population.8
To sum up: High demand for Africa’s goods, increased consumer spending and a growing working-population – it raises Africa’s prospects, it lowers Africa’s ills.
*** [Slide #9 – Norway’s trade with Africa]
Africa’s quickening economic pulse is also felt here in Norway: Demand for Norway’s goods and services were almost four times as high in 2010 as in the year 2000. Norway’s imports from Africa were severely affected by the financial crisis, but imports are yet again picking up. Last year, Norway exchanged goods worth more than 2.6 billion USD with African countries. The import and export of services amounted to a similar amount: 2.8 billion USD.
Behind these figures are several stories of an increasing economic relationship:
7 8
Source: McKinsey Global Institute, June 2010. IBID
6
7
Yara for instance: As the only global fertilizer company with permanent representation on the continent, Yara is well-positioned to help Africa develop its agriculture and improve productivity and profitability. Norway’s energy giant Statoil is active in Africa: Angola is a key building block for Statoil’s international growth. Nigeria is another promising market. ***
Yet the trade figures tell a different story: Of Norway’s global goods trade in 2010, only 1.3 percent was with African countries. The export services to Africa accounted for 5.6 percent of the Norway’s total. But service imports from Africa are small; only 1.4 percent of Norway’s entire import. Overall: We are not exploiting the full potential in business and trade.
***
The time has come to change Norwegian perceptions of Africa. And now is the time to strengthen Norway’s relations with a booming continent. This Business Summit is certainly an important step forward; so too is the establishment of the Norwegian-African Business Association; not to mention the forthcoming Norwegian trade delegation visit to three of Africa’s rising stars.
7
8
***
[Slide #10 – Norwegian trade delegation to Africa]
In a few weeks time – from the 20th to the 25th of November – a delegation of Norwegian companies, organisations and institutions will embark on an African adventure.
Lead by Mr. Solheim – Norway’s Minister of the Environment and International Development – and myself, the target is to explore the potential for deeper business contacts in Angola, Ghana and Mozambique.
The economic relations between Norway and Africa are characterised less by competition than by complementarities: For instance, Norway has a lot to offer in maritime and offshore industries – technology, products and services which Africa needs as it continues to grow. The same goes for the renewable energy industry – another focus area for the forthcoming delegation visit. In addition, the delegation is made up of companies from other key sectors; such as ICT, consulting and fertilizer production.
***
8
9 [Slide #11 – Conclusion]
To all our African guests: It is my hope that your visit will be both interesting and rewarding, and that it will further enhance our economic relations.
To all participating Norwegian companies: For the past decades, Norway’s relationship with the African continent has been characterised by aid. Our job is to contribute to Africa’s progress by focusing on investments, business and trade.
And finally to our hosts – the Norwegian-African Business Association: Thank you for creating this meeting point.
And finally, thank you for your attention.
---***---
9