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This event took place on December 09, 2021

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00:07 (music)
00:22 [Esther Awoniyi]: Welcome to everyone wherever you're joining
00:24 us from across the world. Thank you for tuning into this live event hosted by the World Bank's
00:30 Multilateral Investment Guarantee Agency, MIGA. I'm Esther Awoniyi, Business Anchor
00:36 at CNBC, Africa, and your MC and moderator for today. Thank you for joining
00:41 us. Today we'll be unpacking the theme, Driving Foreign Direct Investment to Africa, the first
00:47 in an annual series. In the next 60 minutes, we'll showcase investment opportunities in
00:52 Africa and share new thinking and discussions on FDI among a cross-section of experts, including
00:58 investors, policy makers, and economists.
01:00 [Esther Awoniyi]: We'd love for you, our online viewers, to
01:03 be a part of today's conversation, so please go ahead and post your questions, reactions,
01:08 and engage with the panelists and speakers from the platform you're watching this event
01:13 from. Please also share with the event hashtag #FDIAfrica. Once again, I welcome you all.
01:20 Now to help us kick things off, please welcome Mr. Hiroshi Matano, Executive Vice President,
01:26 MIGA, with some opening remarks. Over to you, Hiroshi.
01:31 [Hiroshi Matano]: Thank you, Esther. I'm pleased to be kicking
01:35 off
01:36 what I hope will be the first of an annual event series on FDI.
01:42 While we always look to innovate and introduce new product lines,
01:45 such as credit enhancement and support for trade finance,
01:48 FDI lies at the heart of what we do. We're the agency within the World Bank Group
01:55 mandated explicitly with bringing in FDI to developing countries.
02:00 Indeed, we were also charged in fiscal year '21
02:06 by issuing US$5.2 billion in insurance coverage for projects across the world.
02:12 [Hiroshi Matano]: However, this event is intended to be a discussion
02:16 and spur a conversation, not just showcasing the work we're doing. This is why we have
02:22 asked James Zhan of UNCTAD, who is Chief Editor of the World Investment Report, to set the
02:29 big picture stage for us. In the spirit of conversation and problem solving, we have
02:35 also asked experts and practitioners, including Honorable Minister, Amadou Hott, who works
02:42 every day on the challenge of bringing FDI to Africa, to share their thoughts on what
02:48 the challenge and opportunities are.
02:51 [Hiroshi Matano]: We focus in Africa this year because it had
02:54 been hit particularly severely as a result of COVID. FDI flow to Sub-Sahara Africa decreases
03:03 in 2020 by 12% to $30 billion. And Greenfield project announcements, key to industrialization
03:12 process in the region, dropped by a 62% to $29 billion, while international project finance
03:21 plummeted by 74% to $32 billion. These are big challenges and how they can be addressed
03:30 will be discussed further over the coming hour. I look forward to an enriching conversation.
03:35 Before closing, let me add in, that in addition to this public annual event, MIGA also aims
03:43 to host FDI dialogues in several African countries over the next few months, to ensure that this
03:50 conversation goes forth. Assuming safe travel goes practical, MIGA management and staff
03:57 look forward to meeting with investors and policy makers to further discuss the pressing
04:03 issues. With that, let me invite President Malpass to say a few words.
04:09 [David R. Malpass]: I'm very pleased to welcome you all today
04:15 to discuss a topic that is a critical part of driving sustainable economic recovery in
04:21 Africa. That is mobilizing private investments and FDI into the region. MIGA was established
04:28 33 years ago because the World Bank governors at the time realized that concerted action
04:35 was needed to increase capital flows to developing countries, without unduly increasing their
04:40 indebtedness. They built a foundational organization, MIGA, whose purpose is to drive FDI into developing
04:49 countries, through investment guarantees. Though that was a different era, we find ourselves
04:54 faced with new compounding challenges. Reversals in development, rising debt, a fragile global
05:01 economy, and the climate crisis. These challenging times however, also offer us a profound opportunity.
05:10 For Africa, FDI can help drive economic recovery, create jobs, generate taxes, open up participation
05:18 in global value chains and be a conduit for knowledge sharing. It has a great potential
05:26 to bring much needed investments in climate, infrastructure, and resiliency to Africa.
05:32 [David R. Malpass]: The COVID pandemic has had a big impact on
05:35 FDI. Flows into emerging markets fell 8% in 2020, and 16% to Africa. However, signs that
05:44 the continent will rebound as a destination for FDI are emerging, and foreign investors
05:50 are seeing green opportunities as well. Renewable energy investments into Africa actually rose
05:57 by 28% in 2020. Globally, the rise in sustainability-focused investments has been rapid. In 2020, the value
06:08 of sustainably themed investment products was $3.2 trillion, up more than 80% from 2019.
06:16 However, the vast majority of this is directed to developed markets and it's our collective
06:23 responsibility to channel more of this funding to developing countries, and Africa in particular.
06:30 Looking ahead, there are concrete actions that can be taken to best leverage FDI going
06:36 forward, that I'd like to put on the table. First, it's important to protect existing
06:41 FDI flows and preserve supply chains that connect foreign and domestic suppliers. Policy
06:47 makers need to review investment policy and promotion strategies to test which ones have
06:53 proven resilient and can support the early stages of the recovery.
06:58 [David R. Malpass]: Second, policy makers need to aim for returning
07:03 to pre-pandemic levels of FDI by focusing on the emerging competitive sectors. Analysis
07:09 of sector dynamics and investor consultations are key to confirm investment competitiveness
07:16 of these sectors. This will enable more targeted investor outreach, and promotion of strategies
07:23 that can position countries as investment destinations. And third, investment policy
07:30 reform should improve the value propositions in these identified priority sectors. Countries
07:36 should focus not only on attracting more FDI, but strengthening its impact so that it is
07:43 development oriented, and facilitates reallocation of resources toward long run economic transformation,
07:52 job creation, and inclusion. This will depend heavily on enabling the business environment.
08:01 Solid actions can lay the groundwork for improving overall business climate and investment conditions
08:08 to attract sustainable FDI.
08:10 [David R. Malpass]: The World Bank Group stands ready to work
08:14 with our clients on these critical issues. Our MIGA arm is well equipped to work with
08:19 private investors who want to be part of this sustainable recovery. I hope these discussions
08:25 will help untangle some of the challenges in driving FDI to developing countries, and
08:31 specifically to Africa. I hope we can collectively chart a concrete path of channeling investment
08:39 into the most impactful projects that deliver returns on human capital, broad based growth,
08:46 and sustainability. Wishing you all a very fruitful discussion. Thanks.
08:55 [Esther Awoniyi]: [inaudible 00:09:33] the significant drop
09:06 in FDI to Africa since 2020. FDI inflows remain the continent's key to sustainable growth.
09:14 Well, joining me now to give us a better picture of the state of, and trends in FDI flows in
09:20 developing countries and an outlook for the African continent is Mr. James Zhan, Senior
09:25 Director of Investment and Enterprise at the United Nations Conference on Trade and Development,
09:31 UNCTAD. Well, thank you so much, James, for taking the time out to join us today. Let's
09:35 just dive right in. What is the current state of FDI in Africa?
09:40 [James Zhan]: Thank you, Esther. I think for the current
09:44 state, I would say that FDI in Africa was hit hard but more resilient, with a quick
09:52 rebound. FDI in Africa was hit hard by the triple shocks caused by the pandemic supply,
09:58 demand and policy. But the decline in influence was much less than the world average. In 2020,
10:07 FDI to Africa declined by 16% to $40 billion. Most countries and regions within the continent
10:15 was affected. FDI inflows to North Africa contracted by 25% to $10 billion, with major
10:24 declines in most countries, such as Egypt, Nigeria, Sudan, and Tunisia. FDI inflows to
10:32 Sub-Saharan Africa decreased by 12% to $30 billion, with large declines in Ghana and
10:41 South Africa.
10:42 [James Zhan]: But nevertheless, FDI flows to Africa demonstrated
10:46 more resilient, compared with the rest of the world. Global FDI declined by 35% last
10:53 year with much more decline in developed economies, transition economies and the Latin America.
11:00 But for the current state I'm talking about, the first half of this year, FDI flows to
11:07 Africa rebounded with 16% increase, reaching an estimated $23 billion. For Sub-Saharan
11:15 Africa, we saw 22% rise with FDI reaching an estimated $18 billion, and the flows rose
11:23 strongly in Nigeria, Mozambique, Ethiopia, and South Africa. FDI remained flat in north
11:31 of Africa while flows to Egypt registered a very minor decline. They rose in Morocco
11:39 and Tunisia. So please note that the relatively positive picture mask the divergence in sectors,
11:46 types of investment, and the geographical distribution.
11:48 [Esther Awoniyi]: Well, positive indeed. But are there countries
11:52 and sectors where FDI levels have remained steady or which haven't been as affected by
11:58 the pandemic, and why so?
12:00 [James Zhan]: Yes, Esther. In some countries, FDI flows
12:04 remained steady or increased slightly. In 2020, for example, flows to Morocco remained
12:11 stable at $1.8 trillion. Morocco's FDI profile was relatively diversified with an established
12:20 presence of some major multinational companies in manufacturing sectors, including automotive,
12:26 aerospace, and the tech cells. Inflows to Nigeria increased slightly to $2.4 billion,
12:35 and to Senegal, FDI was higher. In fact, it increased by 39% in 2020. Central Africa as
12:48 a sub region registered an increase of FDI with inflows of $9.2 billion, and this increasing
12:55 inflows, in particular, in the Republic of Congo. Sector wise-
12:58 [Esther Awoniyi]: Okay. But what do you observe in... Oh, go
12:59 ahead. Sorry to interrupt you. Go ahead.
13:00 [James Zhan]: ... sector wise, the natural resources sector
13:02 will hit hard in 2020, but I had a rapid recovery in the first half of this year. The new investment
13:11 growth sectors was disrupted in 2020, but growing including logistics, financial services,
13:19 consumer services, and renewable energies. What is worrisome is the SDG, Sustainable
13:25 Development Goal sectors, are so seriously impacted, and it will take longer time to
13:30 recover. This includes transportation, water and sanitary, food and agriculture, health
13:38 and education. So the immediate challenge is to minimize the number of lost years in
13:46 terms of progress made towards SDG goals. The main concern in Africa is that the pandemic
13:54 could wipe out the development gains achieved over the last decade.
13:59 [Esther Awoniyi]: Hopefully that won't be the case. But what
14:02 do you observe in terms of FDI flows to more vulnerable countries? Are those affected by
14:07 fragility and conflict?
14:08 [James Zhan]: Yeah. For these vulnerable economies and low
14:11 incomes, I would say it's not worth it that FDI inflows to the 33 African least developed
14:18 countries, increased by 7% to $14 billion in the mid of the pandemic. As a result of
14:26 that, African LDCs perform the better than Africa as a whole. As I mentioned that, FDI
14:33 flows in Africa as whole declined by 16%. The inflows exceeds the 1 billion in five
14:40 African least developed countries. And the 500 meeting in another five. Ethiopia remained
14:47 the largest African low income countries recipient for FDI. In Mozambique, inflows grew by 6%.
14:56 And the Democratic Republic of Congo, investment increased by 11%. In Tanzania, investment
15:04 flows grow by 2%. Uganda failed by 35%. In Sudan, this decreased by 13%. So that's roughly
15:15 the picture of vulnerable and low economy [inaudible 00:16:01].
15:20 [Esther Awoniyi]: What is your outlook for FDI for the continent?
15:24 Obviously, we are hoping that the numbers do pick up going forward. We know that there's
15:30 still issues of debt. There are many African countries. The looming debt crisis were told
15:36 on the continent. Of course, multilateral agencies are trying to aid African countries
15:43 to ensure that they're not buried on all that debt. But what is your outlook for FDI for
15:47 the continent?
15:48 [James Zhan]: Yep. As the short-term and longer term. The
15:52 short-term prospects, I would see a rapid rebounce, but the full recovery takes a longer
15:58 time with uncertainty. So FDI in Africa, expected to increase in 2021. That's what we are witnessing.
16:08 But a full FDI recovery will take place towards perhaps the second half of 2022. Amid slow
16:17 rollout of vaccines and emergence of the new COVID strains such as Delta and the Omicron,
16:24 a significant downside risk persist for FDI in Africa and the prospects for an immediate
16:32 full recovery uncertain. Specifically, we see that similar to the global level growing
16:41 investor, confidence in Africa is mostly in infrastructure, both by favorable long-term
16:48 financing conditions, recovery, stimulus packages, and development assistance related investment
16:54 programs, and international project finance deals. In fact, it was up significantly in
17:02 value. And we also see that it's large deals in some power sectors.
17:07 [James Zhan]: Now, in contrast, investors' confidence in
17:11 Africa, in industry and global value chain remains uncertain. Greenfield Investment Projects
17:18 announcement continued their downward path. That's about 30% in value and 25% in number
17:28 of Greenfield projects for the first three quarters of this year. So that's the kind
17:33 of indicator for the immediate future of FDI flows to Africa. The recovery of investment
17:39 flows to Sustainable Development Goal related sectors in Africa, which have suffered significantly
17:46 during the pandemic with almost a double digit, declines across all SDG sectors. And they
17:54 will remain fragile.
17:55 [James Zhan]: The combined number of announced Greenfield
17:59 investment and projects, financed deals, fell by 32% in these SDG sectors. That's education
18:07 and water, sanitary and what I mentioned earlier. Longer term prospects in Africa for FDI, I
18:13 would say positive with great potential. So new opportunities due to global value chain
18:20 restructuring, which is going to happen, intensified business related international assistance
18:25 in Africa by major countries. The approval of the key mega projects, the Africans Continental
18:33 Free Trade Area Agreement, and this forthcoming sustainable investment protocol, could lead
18:39 to investment and picking up greater momentum beyond the 2022. So Africa is projected to
18:47 grow by 4.6% in 2021, and average of 4% up to 2025. All this will attract investment
19:00 in the years to come.
19:01 [Esther Awoniyi]: Well, fingers crossed on that. Thank you so
19:04 much Zhan, for talking to us today. Now we're moving quickly to our next segment [crosstalk
19:08 00:19:52].
19:09 [James Zhan]: Thank you to MIGA for inviting me.
19:11 [Esther Awoniyi]: We're moving quickly to our next segment,
19:14 where we go behind the scenes to get a good sense of the impact of FDI on the ground in
19:19 African countries.
19:22 [Nkemjika I. Onwuamaegbu]: Good morning. Good afternoon to everyone joining
19:32 today. I would like to take you through a quick tour of MIGA in Africa, and the role
19:36 we play in driving Foreign Direct Investment into the region. First, a quick overview of
19:43 what MIGA does. MIGA's investment guarantees can support a variety of projects, ranging
19:48 from pure private sector, all the way to public sector projects procured by governments. We
19:54 offer political risk insurance products to protect against transfer restriction and currency
19:59 inconvertibility, expropriation, war and civil disturbance, and breach of contract risks.
20:05 We also offer a credit enhancement product that protects against defaults of loans to
20:10 eligible host governments. MIGA has been supporting investments in Africa since its inception
20:16 over 30 years ago. Currently, Africa is the region with the largest outstanding gross
20:22 exposure, representing nearly 30% of our total portfolio exposure. That's six and a half
20:29 billion dollars in guarantees across 99 projects in 30 member countries across Africa. MIGA's
20:36 impact has been significant. 11 million Tons of CO2 equivalent avoided per year, 19,000
20:44 Gigawatts of power generation and 40,000 people employed.
20:49 [Nkemjika I. Onwuamaegbu]: Now travel with me across the continent and
20:52 take a closer look at some of our projects, where MIGA has worked with investors to uncover
20:57 the investment opportunity. Our first stop will be the Kasada Hospitality project. This
21:03 project spans 10 countries across Africa. Kasada, a hospitality focused private equity
21:10 fund, approached MIGA as it was considering building its portfolio of up to $1 billion,
21:16 into the hospitality industry across Africa. MIGA is providing total coverage of up to
21:22 $271 million to Kasada and its subsidiaries. The first set of projects to be covered, a
21:29 portfolio of eight Brownfield hotels acquired by Kasada and operated by a core in Cameroon,
21:36 Cote d'Ivoire and Senegal. A trend we've been witnessing is a gravitation towards Brownfield
21:42 acquisitions versus Greenfield projects in the post-COVID recovery. Greenfield project
21:48 announcements, which reflect investor sentiment and future FDI trends, dropped by 62% from
21:55 $77 billion in 2019 to $29 billion in 2020. Greenfield investments are particularly difficult
22:03 in the hospitality sector where existing capacity remains above demand.
22:07 [Nkemjika I. Onwuamaegbu]: For MIGA, the Kasada project was a great opportunity
22:11 to support a Brownfield investment that will preserve existing jobs and create new jobs,
22:17 directly and indirectly right away. As part of its $1 billion portfolio, Kasada will pursue
22:24 70% Brownfield acquisitions and 30% Greenfield developments. Kasada will prioritize projects
22:31 that have started construction, but have not been completed due to a lack of capital or
22:36 other economic pressures. Now let's move to Burkina Faso to discuss some solar projects
22:43 MIGA's supporting. Burkina Faso has one of the lowest electrification rates in the Sub-Saharan
22:49 African region. 20% as compared to 48% for the region overall. The country is striving
22:55 to address its energy access challenges and enhance its energy security. To advance energy
23:01 access in the country, MIGA recently issued over $5 million to French investor GreenYellow
23:07 that will cover its investments into a 30 Megawatt solar PV energy facility in [Magrionga
23:12 00:23:56].
23:13 [Nkemjika I. Onwuamaegbu]: What makes this project unique? The planter
23:16 anticipated to be part of the first round of solar IPPs in Burkina Faso, and will bring
23:21 much needed, clean and affordable power to the country. Our next stops are in Central
23:26 Africa, where MIGA has partnered with an innovative off-grid energy access company called Bboxx.
23:32 Bboxx is a next generation utility that offers off-grid energy solutions, including solar
23:39 home systems, alongside equipment like lights, televisions, and refrigerators. Bboxx is also
23:45 using energy as an access point to other services such as LPG cylinders and small gas burners
23:52 for clean cooking. Last year, MIGA issued guarantees of up to $37 million to a fund
23:59 managed by African Infrastructures Investment Managers, and almost $6 million in guarantees
24:05 to the facility for energy inclusions, off-grid energy access fund for their investments into
24:11 Bboxx. We saw a unique opportunity to drive investments into the company's innovative
24:16 business model, leveraging Pay As You Go mobile money payments and their off-grid solutions.
24:22 [Nkemjika I. Onwuamaegbu]: For our last destination, let's zoom out to
24:26 two Pan-African financial sector projects. In 2020, MIGA supported two African banking
24:32 groups, Absa and FirstRand, to boost lending in the region and increase bank resiliency
24:38 amid the COVID-19 pandemic. For Absa group, MIGA issued almost $500 million in guarantees
24:45 to help expand financing across seven countries. Freed up capital will be focused on financing
24:51 corporates and SMEs as well as on projects with potential climate corp benefits. In addition,
24:58 as part of the COVID-19 response program, MIGA issued guarantees to FirstRand to support
25:04 its subsidiaries. The guarantees free up capital, which allows the subsidiaries to continue
25:09 their operations and whether the pressures arising from the pandemic.
25:13 [Nkemjika I. Onwuamaegbu]: Both Absa and FirstRand projects are examples
25:17 of MIGA projects where financial institutions have tapped into MIGA's capital optimization
25:22 product, to help boost lending during the COVID-19 pandemic. Now, this is where our
25:28 journey ends today. And as you can see, from all corners across Africa, MIGA has been a
25:33 valuable and trusted partner for investors who want to invest in impactful project. MIGA
25:39 products not only deliver more security to investors, but they also can help reboost
25:45 Foreign Direct Investment in a post-COVID future. Thank you and have a great day.
25:52 [Video with French audio - English subtitles on screen]
30:15 [Esther Awoniyi]: That was a behind-the-scene look
30:18 impact of foreign direct investment
30:20 in developing countries. We're moving on now to our panel discussion
30:25 for this event.
30:26 Joining me for a conversation on Driving FDI to Africa
30:29 is Mr. Amadou Hott, the Honorable Minister of Economy, Planning and Corporation, Senegal.
30:35 Also joining us today is Cheryl Buss, CEO, Absa International. David Damiba, Managing
30:41 Partner and Chief Investment Officer, Kasada Capital Management, also joins us today. Please
30:46 welcome also Ethiopis Tafara, Vice President and Chief Risk, Legal and Administrative Officer
30:51 at MIGA. And last but not the least, Indermit Gill, Vice President for Equitable Growth,
30:58 Finance, and Institutions at the World Bank.
31:00 [Esther Awoniyi]: Thank you all for joining us, taking the time
31:03 out to join us today. A quick reminder to our audience, please post your questions to
31:08 our panelists. There will be a live Q & A session after the conversation. Also remember
31:12 to use a hashtag #FDIAfrica. Now let's get right to it. Let's begin this conversation
31:18 by taking the perspective from governments. Honorable Minister Hott, could you first tell
31:23 us how COVID-19 affected FDI flows to Senegal, and how the country has handled the challenge?
31:30 [Amadou Hott]: Thank you very much. And thank you to MIGA
31:35 for this opportunity and to CNBC for this opportunity. As we all know, the COVID has
31:41 affected FDIs in Africa, especially in Sub-Saharan Africa down 12% to $30 billion. But in Senegal,
31:49 we managed actually to increase FDIs thanks to the energy sector, in particular the investments
31:58 in oil and gas. We have major oil and gas project going on right now with expected first
32:04 oil production and gas production in '23. So the majors have been investing heavily
32:11 and therefore we managed to have a 39% increase to $1.5 billion. So really no investments
32:20 on the tourism sector, no investments virtually on all sectors. No FDIs basically.
32:26 [Amadou Hott]: But the government continue to invest during
32:30 this period in various sectors, but also put in place a economic and social resilience
32:39 program of about 7% of GDP that help us actually avoid recession. We finished the year at 1.5%
32:48 of growth in 2020. But in '21, we are seeing things picking up again with growth expected
32:56 at around 5% this year and next year, 5.5%. We've taken some measures actually to make
33:03 sure that we are attracting more FDIs in the short to medium terms.
33:08 [Esther Awoniyi]: Right. Thank you Honorable Minister. Now let's
33:11 bring in the perspective of the private sector and investors. I would like to ask both Cheryl
33:18 and David, how your firms have navigated the pandemic within the continent, and how has
33:23 the current situation changed your approach to supporting development projects? Cheryl,
33:27 please go first.
33:28 [Cheryl Buss]: Thank you, Esther, and delighted to be on
33:32 the panel today. As we all know, we're all wrapping with the effects, both long-term
33:37 and short-term of COVID, and obviously a great impact on GDP and a great impact on FDI as
33:46 we've seen across the continent. Absa operating in the 12 markets that we do across Africa,
33:53 I had to look and say, what is our plan going through the COVID crisis and through the pandemic?
34:00 And we really took two approaches, which was protecting lives and protecting livelihoods.
34:06 And so what we sought to do initially was to say, what is the medical support? How do
34:11 we get involved medically in terms of PPE, in terms of really availing the countries
34:18 in which we have a presence of support? And then most importantly, and the role as we
34:24 play in a bank and recognizing the importance of the social impact role that we play on
34:29 the continent, was around protecting livelihoods.
34:32 [Cheryl Buss]: So really getting involved in terms of looking
34:36 at giving support into the ecosystem, looking at giving deep relief on loans. We gave in
34:44 excess of $500 million of relief to clients. And so, really played a role. I think that
34:53 going forward, we see significant opportunity and I'm sure we'll unpack that later. But
34:58 although FDI is done at the moment, we see opportunity in the trade space really ignited
35:04 by the Africa Continental Free Trade Agreement, and that needs to be leveraged with the other
35:12 infrastructural support and growth that we see a wide gap, that we see investment opportunity
35:17 to. We will surely be there to support those opportunities of development.
35:22 [Esther Awoniyi]: Well, great. David you are up next.
35:26 [David Damiba]: Thank you, Esther. Thank you very much to
35:31 MIGA for having me on the panel and for giving us the opportunity as Kasada to mention what
35:37 we're doing on the continent, especially in this sector. We are focused on private equity
35:41 real estate with the focus on hotels in Africa, hospitality. The platform was launched in
35:47 2019, so you can only imagine that a year like 2020, which is a historic year in terms
35:54 of stress test in the sector, was enormous for our sector. We see ourselves as solution
36:01 providers in the sector that is already a large employer across Africa. And considering
36:07 the loss of the closure of hotels, the loss of jobs on the continent and the difficulty
36:13 for government to support a lot of the workers in the private sector like things that have
36:17 happened in the U.S. or Europe. We see ourselves as not only solution providers, but impactful
36:24 investors.
36:25 [David Damiba]: What we've done during the difficult year
36:27 of 2020 was basically readjust our approach to investing in this sector. Continue to be
36:33 countercyclical investors. It doesn't matter what time of the cycle we're in. We are long-term
36:37 investors in Africa and the sector. We adjusted a strategy a little bit by focusing a bit
36:43 less on Greenfield investments and more so when acquiring hotels that are already existing,
36:48 where we call Brownfield investments. It went from basically a shift in terms of investing
36:54 to creating jobs, to actually job preservation, as far as Kasada was concerned. We executed
36:59 that and we've acquired 10 hotels in the past 12 months. We are basically bringing our support
37:05 to that.
37:06 [David Damiba]: Hopefully most of the viewers have seen the
37:09 video before, where we've been able to acquire hotels and knowing you require them, but we
37:13 continue to invest in them. We are extremely bullish on Africa. We're very bullish on the
37:17 sector that requires our capital and we are here to help, and we're here to support it.
37:22 We're very much long-term investors.
37:24 [Esther Awoniyi]: Fantastic, David. Indermit, let me bring you
37:27 in here. From a bigger picture perspective, what is your assessment of what countries
37:32 need to do to further drive investor interest? What do investors and lenders need to get
37:38 better at to take advantage of investment opportunities?
37:41 [Indermit Gill]: First I want to thank you very much, and I
37:46 would really like to thank the Minister, Cheryl and David for those insights, because we learn
37:50 a lot from them. I'll just make two short points. I guess the first one is a fairly
37:56 obvious one, which is just as all African countries are not the same, all Foreign Direct
38:02 Investment, whether it's to Africa or to other parts of the world is not the same. One can
38:09 think of FDI as consisting of three types. The first type is resource-seeking FDI. These
38:16 are investments that are for accessing Africa's natural resources like minerals and metals,
38:23 and Africa gets a lot of these investments because it has a lot of natural resources.
38:27 The second is market-seeking FDI. These are investments to access Africa's growing markets
38:34 for goods and services. Now, Africa doesn't get a lot of these because its markets are
38:39 neither big, nor terribly well integrated. But they're getting bigger and they're getting
38:43 more integrated.
38:44 [Indermit Gill]: So these investments are to grow. The third
38:47 is what we call efficiency-seeking FDI. This is the holy grail of FDI in a sense, because
38:55 these are investments to access opportunities for cutting production costs by locating production
39:00 in Africa. These bring three things. It brings patient finance, it brings good jobs and it
39:08 brings socioeconomic progress. This is what is related to global value chains, because
39:13 most goods and services are not produced in one place any longer, they're produced in
39:17 many places. Africa ought to be a big part of this, but it isn't. So these are the three
39:23 things and they require different things. I can tell you more about that, but basically
39:29 for the first type of investment, what Africa really requires or what African countries
39:37 really require, are good institutions. For the second type of investment, it requires
39:42 good institutions, but it also requires good infrastructure. For the third type, it requires
39:48 both those two things, good institutions, good infrastructure, but it also requires
39:53 well targeted interventions. I'm sure that my colleague Ethiopis will actually tell you
39:57 about some of those.
39:58 [Esther Awoniyi]: Very well said Indermit. Ethiopis, let me
40:01 bring you in here. MIGA's role is to drive FDI to developing countries and Africa is
40:06 a priority region. What is your reflection on how things have gone over the past one
40:12 and a half years?
40:14 [Ethiopis Tafara]: Thank you, Esther. As the Honorable Minister
40:18 indicated, the COVID-19 pandemic has led to rising debt burdens as governments try to
40:23 combat the economic impacts. Mostly through prolonged lockdowns and disrupted normal economic
40:29 activity. In Africa, in particular, we've also seen a dramatic decrease in trade finance
40:35 available to businesses and governments, which in turn has significantly constrained imports
40:39 of critical consumer, corporate medical goods and services. But despite the impact of COVID,
40:45 we've had some interesting and innovative projects over the course of 18 months, including
40:51 our first support to an off-grid power project. Our first support to commercial and industrial
40:59 users of telecoms. Our first solar IPP in Burkina Faso. Our first geothermal IPP in
41:06 Ethiopia. The first IPP project for roads in Kenya. And first support for continent-wide
41:12 hotel asset acquisition platform, and you heard from David on this. But we've also witnessed
41:17 a number of trends, which I think are worth highlighting.
41:20 [Ethiopis Tafara]: We've seen an uptake in Brownfield asset acquisition
41:24 plays across the tourism power telecommunication and mobile money sectors. Large scale infrastructure
41:32 projects are being delayed or stalled as governments focus on economic recovery efforts, and corresponding
41:37 fiscal pressures. I was seeing a shift from publicly funded projects to consideration
41:42 of PPP structures, but with governments very carefully scrutinizing their potential liability.
41:48 We're seeing increased focus on water, telecoms, and digital infrastructure. A slow down of
41:54 FDIs, investors focus on building resilience in their current pipeline of projects. We
41:59 see governments considering renegotiation of existing contracts, particularly in fossil-fuel
42:06 IPPs. And then a shift towards distributed energy solutions off-grid, mini-grid, metro-grid,
42:14 and CNI solutions that don't rely on public sector offtake, but on a sustainable enabling
42:19 environment for investments over the long-term. And finally, we see continued interest in
42:23 renewable energy IPPs, in new African markets. It's highlighted with the Burkina Faso project
42:29 I mentioned earlier, as well as a focus on decarbonization of fossil-fuel based projects.
42:33 [Esther Awoniyi]: Well, thank you so much, Ethiopis. You make
42:36 some very good points there. Before I circle back to Minister Hott, just to tell our audience
42:39 that we do apologize for the audio issues that we've had. We're aware of them. We're
42:40 fixing them. And we thank you for your patience. Now, circling back to Minister Hott, let's
42:41 talk about solutions. What is Senegal doing now to keep FDI flow into the country and
42:45 what lessons can other countries and on the continents take away?
42:49 [Amadou Hott]: Thank you very much. We've been actually amending,
42:55 really focusing on reforms on one side, but also on another side, really developing what
43:02 we call the agropoles and special economic zones in the country. On the reform side,
43:09 we've been focused on several areas. Number one is, the Compact with Africa reform with
43:17 the German government, with the G20 initiative focusing on four key areas to attract more
43:26 FDIs, to facilitate the business environment. Number one, it is to focus on access to land
43:35 for [inaudible 00:44:38] means, access to finance, but also reforming the labor laws
43:43 and the labor administration process as well, so that it's more friendly. And lastly, focusing
43:50 also on human capital, basically on vocational training. So we have more young people being
43:58 able to address the needs of investors. The other type of reforms was the main one really
44:05 that have been keeping us busy during the COVID time, was the reforms on the PPP framework.
44:11 [Amadou Hott]: We had a very, let's say complex framework.
44:17 We definitely actually simplify the process, making on sure that the process is very clear,
44:29 very flexible, very diligent so that we don't waste time. During that reform, we also decided
44:35 to create a project preparation facility so we can prepare projects for the private sector
44:43 in various sectors. In the social sectors, including the healthcare sector, but also
44:50 on the economic infrastructure so that we borrow less and we help with the private sector
44:59 invest more alongside the government, with the government providing the facilitation
45:03 and sometimes some guarantees. I'm sure some of those PPP projects will need at the right
45:09 time MIGA guarantees, because sometime we have undertakings of the government, these
45:16 are the private sector. And if MIGA can cover and strengthen those undertakings, that will
45:22 facilitate the investment of the private sector. On the special economic zones, we are first
45:28 striking the construction of some of those.
45:32 [Amadou Hott]: For the agropoles also, we are first striking
45:34 the construction of those so that we can add value to our local production. We produce,
45:40 let's say a lot of peanuts. We produce a lot of cashew nuts and mangoes that are being
45:48 destroyed because we cannot consume everything fresh. We are trying to have those facilities
45:55 areas, those agropoles, so that investors can set up their own enterprises and industries
46:01 and transform locally at some value before exporting. I believe that one of the key lessons
46:07 is really to have a simplified PPP framework, but also to have a project preparation facility,
46:15 because otherwise we will not have investors. We usually rely on external project preparation
46:21 facilities, but sometime it takes time. And now we decided to have it in-house and we
46:27 will contribute our own money next to the investors to prepare projects together. Sometime
46:33 we prepare it alone and then hand over to the private sector who can then invest their
46:37 own money.
46:38 [Esther Awoniyi]: Thank you so much Honorable Minister for that.
46:41 I'm sure the private sector will be very happy just listening to those words. David, let
46:46 me bring you in here. What is your prognosis of FDI trends in the region going forward
46:51 and what kinds of opportunities are you looking into?
46:54 [David Damiba]: Yeah, I think we were pretty big believers
46:58 that FDIs, some of the countries that have added dip on it will rebound in the next few
47:03 years. I think if you look at GDP growth in Africa and what happened in 2020 and the rebound
47:07 that we're seeing in some of the economies in Africa, at the end of the day it ends up
47:10 being quite a bit of a resilient economy in general and quite diversified in its different
47:15 makeup. We're long-term believers in that. The only thing that we change is, as the cycles
47:21 advance and change, we just adjust the way we invest as I mentioned earlier. I think
47:26 what we're looking at now in the next 12 to 24 months is to continue to invest in the
47:30 hospitality sector. We're really investing close to a billion dollars.
47:34 [David Damiba]: We've already started our investment program.
47:36 We've been investing close to a billion dollars in the hospitality sector that is heavily
47:41 fragmented. On the downside, we will look at more Greenfield projects effectively as
47:45 well. We still want to focus on that as we still want to have that part of our portfolios.
47:50 So we will be looking at a few key ones and hopefully announcing them in a few months.
47:56 On the Greenfield, that's one case, and on the Brownfield, we'll continue to do that
47:59 because the pain that the hospitality sector has suffered over COVID, is not necessarily
48:04 going to be something that hotel groups and hotels will come out within the next few months.
48:09 It's going to be a long way out of that. So we remain solution providers. That's one key
48:16 thing.
48:17 [David Damiba]: Aside from these solutions, I think it's great
48:20 to also have the Minister on the panel, we also want to oftentimes work with government
48:25 effectively because we are one of the few investors who in the middle of this crisis
48:29 are going into countries, trying to invest, support jobs, and create jobs. So the more
48:35 we have discussions with the government, the more we can see good ways to work together,
48:40 create value. We have MIGA as also guarantors from providing insurance products. We have
48:46 the IFC funding us as well on the senior debt. We are bringing together all the different
48:50 support groups that can happen, but the government is extremely important in terms of attracting
48:54 private investors who can come in and do that. I think for us is, we don't really have specific
49:00 region where investors across Sub-Saharan Africa will continue our program, but most
49:06 importantly, post acquisition.
49:07 [David Damiba]: Our view is continue to spend money to reposition
49:11 assets in good quality, international standards across Africa. So then when you fly in from
49:16 Paris, London, and New York into hotels in Africa, the standards are maintained, but
49:20 the culture, the African culture, the culture of the country comes out in the asset as well.
49:26 So we will continue doing our investment program with a few tweaks here and there. And ideally
49:32 with the support of governments as well.
49:34 [Esther Awoniyi]: Well, David, you've said it. Well said. Especially
49:37 on the point with governments and the private sector. Outcomes are always better when there
49:42 is a better handshake between the government and the private sector. Cheryl, let me bring
49:45 you in here. What do you think the opportunities are for investments between countries on the
49:50 continent? Are you just as optimistic as David?
49:52 [Cheryl Buss]: Yes. I believe we are. I really think, and
49:57 depending on some of that, is the key milestone which was achieved this year, and that was
50:02 the implementation, the execution of the Africa Continental Free Trade Agreement, as I mentioned
50:09 earlier. During a time where the economies have been really hard hit by the pandemic,
50:14 it really does offer some economic promise and really offers the potential to stimulate
50:22 recovery out of the pandemic. And also offers new opportunities between Africa to Africa
50:29 trade, which is really needed. Now, the World Bank is looking at the Continental Free Trade
50:34 Agreement to uplift in excess of 68 million people out of poverty. This is a substantial
50:41 number. That being said, as successful as the Free Trade Agreement will be, or the area
50:47 will be, it's hugely dependent on consistent infrastructural development and growth.
50:53 [Cheryl Buss]: And as Mr. Gill mentioned, there are significant
50:57 gaps. There's significant FDI interest in the infrastructure space, but there's about
51:02 a hundred billion dollars per annum of infrastructural investment required. Although in some instances
51:10 we've seen that this has been slow, however, we are starting to see some projects that
51:15 are taking shape. Renewable energy projects, other power supply. We know that Africa has
51:21 a need for energy, which will then stimulate other sectors. We're seeing other infrastructural
51:27 development in roads, rail, port. We are seeing these developmental nodes pop up and importantly
51:35 tagged to that, which I think goes well with the goods and services, FDI required is obviously
51:41 digital. And I think that digital will continue to play a key role in the development and
51:49 infrastructural development. So really, I think what we are seeing is that economic
51:53 growth development and success are really linked to infrastructural development. That'll
51:59 result in positive return for investors.
52:02 [Cheryl Buss]: But I think also key to the success is the
52:06 link up and the partnerships that we see come about in public-private partnerships. These
52:12 are key critical, and I don't believe that there's one institution or one government
52:17 that will be able to do it themselves. And so it really will be about a collaborative
52:22 effort between commercial banks, between public sector, between private sector, and of course
52:28 importantly, with development financial institutions. We are proud to have a close collaboration
52:35 with MIGA. Earlier in the year, MIGA announced their support to Absa and the issuance of
52:40 guarantees nearly up to the tune of $500 million for Absa. These guarantees are valid for as
52:47 long as 15 years, and really allows Absa to have the relief to unlend into the SME sector.
52:53 This is also key critical to the continued development and the sustainable growth of
52:59 Africa.
53:00 [Esther Awoniyi]: Well, thank you so much for that, Cheryl.
53:01 Ethiopis, let me circle back to you. Our world leaders are to talking about economic recovery
53:06 that is intertwined with a sustainable climate focus recovery. How do MIGA products encourage
53:12 foreign investors to invest in climate related projects in Africa?
53:17 [Ethiopis Tafara]: Thank you, Esther. Guarantees are becoming
53:22 the instrument of choice for many in the private sector looking to invest in climate projects
53:28 in Africa. As a result, we and MIGA have been able to catalyze private sector finance for
53:34 climate projects, and we've delivered over 1.6 billion in guarantees in support of climate
53:41 finance transactions in Sub-Saharan Africa, since we started tracking climate transactions
53:47 in our fiscal year '16. Now, the bulk of MIGA supported climate finance projects during
53:53 that period, have supported the development of cross border renewable energy projects,
54:00 and solar, and wind, and hydro. However, we also covered projects that helped to green
54:05 the region's financial institutions that support energy efficiency and climate-smart agriculture.
54:12 Now increasingly working very closely with our clients, we're focusing our support to
54:18 enhance the climate resilience of our projects. This is particularly important, given the
54:25 regions' vulnerability to climate change.
54:27 [Ethiopis Tafara]: We're now marrying our expertise in financial
54:31 structuring and management of ESG and other risks that help mitigate the perception of
54:36 risk and investing in Africa, with our expertise in climate mitigation and adaptation. This
54:42 creates new opportunities for climate business. I'll mention three areas we're working on
54:47 taking this approach. First, we're looking to attract foreign investors into expanding
54:52 their presence in renewable off-grid and metro-grid energy, which can help underserved households
54:58 gain access to clean energy. Second, we're working with our World Bank colleagues and
55:04 bilateral partners in exploring how foreign investment can support decommissioning of
55:09 coal-fired power plants, in a transition to green energy, with MIGA potentially providing
55:15 guarantees against government commitments in that process. And finally using guarantees,
55:22 we believe we can help de-risk and scale up the region's role in carbon markets, given
55:28 its abundance of natural capital that can serve as a basis for carbon credits. So we
55:33 think working with the public and private sector, we're quite optimistic that we can
55:39 take in this approach, continue to mobilize for an investment into climate opportunities,
55:44 and support both mitigation and adaptation that will serve the development objectives
55:49 of the continent.
55:50 [Esther Awoniyi]: Well, thank you so much Ethiopis. Indermit,
55:54 Let me bring you in here. I believe this will be my last question to my panelists. Just
55:58 a quick word to our audience, and we will take about three questions. Thank you so much
56:01 for sending in your questions. We see your tweets. We see your retweets. Thank you also
56:05 for using the hashtag. We'll come and take about three questions from our audience after
56:10 this. So Indermit, let me just ask you this last question. What are the policies can governments
56:16 adapt that would further help catalyze FDI in Africa, particularly in transformative
56:22 sectors that foster greater equity and economic growth.
56:26 [Indermit Gill]: Excellent question, Esther, and a very difficult
56:30 question. But just as I talked about three types of FDI earlier, I want to emphasize
56:36 two aspects of this FDI. The first one is quantity, which helps the economy grow, the
56:42 second one is quality, which makes sure that the average African citizen actually benefits
56:47 from this growth. I think that if one looks at these three types of FDI, you actually
56:52 find that you have slightly different priorities in terms of quality and quantity. For example,
56:58 for resource-seeking FDI, I'd say that the top priority is quality. We want to be sure
57:04 that the FDI actually benefits the owners of these natural resources, the ordinary people.
57:09 For example, the deals made by foreign investors and say, oil in Chad or copper in Zambia should
57:16 be transparent and fair. That means that the folks who are bringing the money should earn
57:23 a fair return, but the government should get revenues and the people should get the benefits
57:28 of these revenues.
57:29 [Indermit Gill]: I think that the institution, the highest
57:32 priorities are resource sector governance and public financial management. Now for market-seeking
57:38 FDI, I think the big issue along the lines of what Cheryl said, has to do with integration.
57:45 Basically, this is because Africa is fragmented into many small markets, much as how Europe
57:50 was 30, 40 years ago. But Africa, if it were just one economy, it would be $3.5 trillion.
57:58 But the problem is that Africa has a lot of small economies, so you have to integrate
58:02 these markets and the [ACFDA 00:59:07] will definitely help in this one. But this is very
58:10 difficult business. One has to be patient because even the European single market has
58:16 a lot of unfinished business, especially in the market for services. So one has to be
58:20 patient with this one. The third part, the part which is going to be the hardest is the
58:27 efficiency-seeking FDI.
58:28 [Indermit Gill]: Here you want both quality and quantity. This
58:31 is a massive agenda. Basically, any developing economy has to get help from organizations
58:40 like the African Development Bank, the World Bank, the IFC, and of course, MIGA, because
58:45 this means that you have to take big risks when you're bringing in FDI of this sort.
58:51 And because this means locating a part of your production, that is part of a larger
58:57 global value chain in a poor country, political stability starts to matter. Infrastructure
59:02 quality starts to matter. All of these things. And you have to get this mixed right. You
59:06 can't rely just on fiscal incentives, just on special economic zones, and so on. Those
59:11 will be important, but you need all of these other things along the lines of what the panelists
59:15 have said.
59:17 [David R. Malpass]: Thank you so much, Indermit, and also a big
59:21 thank you to all our panelists for today. Sharing this very insightful comments and
59:26 of course, on Foreign Direct Investment on the continent, how the private sector can
59:32 have a better handshake with government. And of course, mounting all the challenges, particularly
59:37 this post-COVID world that we're all living in. Thank you so much for your time today
59:42 on the panel. Also, thank you to our audience. Just as quickly, I mentioned that we know
59:47 we're running slightly over time, but we just want to quickly accommodate some of our audience
59:53 questions. I'll just quickly take one. And perhaps I'll just choose one of the panelists
59:57 to answer the question. I'll start with this question. Perhaps the Honorable Minister Hott
01:00:03 can answer this question for us. It says, how can FDI accelerate the growth of the African
01:00:09 Continental Free Trade Agreement? I know that is already in effect. Continental 1.2 billion
01:00:17 people, potential GDP of $2.5 trillion. Minister Hott, what are your comments on this?
01:00:24 [Amadou Hott]: Yeah, it's a great question. We definitely
01:00:30 need more FDIs towards Africa or intra-African FDIs basically, so that we can produce more
01:00:40 in Africa and sell within Africa. Because otherwise, the Continental Free Trade Area
01:00:48 will just provide the opportunity for people investing outside the continent and producing
01:00:54 outside the continent, to just export massively into our continent by going through, let's
01:01:00 say some countries, to reach the whole continent. This Continental Free Trade Area will be quite
01:01:08 interesting. If the investments is happening inside Africa, the value added is happening
01:01:14 inside Africa, and then exporting to other African countries, from one African countries,
01:01:25 let's say. I think our governments have to really fast track all the reforms to make
01:01:30 the business environment friendlier so that people can say, let me go to Africa, produce
01:01:38 there, sell into Africa, instead of producing outside the continent and then export into
01:01:44 our continent.
01:01:45 [Esther Awoniyi]: Yeah. Thank you so much Honorable Minister
01:01:47 for that. Now this next question, I think I'm going to pose this question to Ethiopis.
01:01:51 Now it says, are there any criteria that make a country more favorable and open to Foreign
01:01:56 Direct Investment? Mr. Tafara, if you could answer that.
01:02:05 [Ethiopis Tafara]: I started by saying certainly, Esther. There
01:02:12 are conditions that make for a more favorable setting for Foreign Direct Investment. It
01:02:21 obviously depends on the sector, but the regulations around a given sector's activities frequently
01:02:30 will determine the comfort and the appetite that Foreign Direct Investors have, for pursuing
01:02:38 a project or an investment in that particular country. So it very much depends on the sector,
01:02:44 but certainly the ability to get your money out is a critical factor. The ease with which
01:02:52 you can get services and products that you need for a particular project investment is
01:02:59 also a factor.
01:03:00 [Ethiopis Tafara]: There are a number of factors. But yeah, I
01:03:03 think you'll have to look at the particular sector in which you're interested to develop
01:03:07 as a government, as a country and determine what you may need to ease in terms of regulation
01:03:12 or which may need to change in terms of regulation, to actually facilitate the investment that
01:03:16 you're seeking. It will be very sector specific. But investors usually have a bottom line,
01:03:24 frequently have shareholders, and they have criteria that they meet. So taking those into
01:03:29 account, you can determine what you may need to do, to make it easier for direct investors
01:03:37 to consider your market.
01:03:38 [Esther Awoniyi]: Very well said. Cheryl, perhaps I can ask
01:03:40 you this. We're just going to take this last question. What criteria should businesses
01:03:45 and entrepreneurs meet or tips to keep in mind when an opportunity such as FDI is presented
01:03:51 to them?
01:03:52 [Cheryl Buss]: I think that one of the biggest things is
01:03:54 around long-term appetite. You know that Africa can be quite cyclical, so even investors looking
01:04:01 at coming into Africa with a short-term investment attitude, I don't think that's the right continent
01:04:10 for investment. I think that Africa is one that will offer great return. It offers great
01:04:15 opportunity. But the investment and the real commitment has to be there. It has to be long-term
01:04:19 in nature, and then it has to have the ability and the sustainability to handle the waves
01:04:25 that may come. We've seen how economically hit Africa's being, through the COVID pandemic.
01:04:32 And so you need to know that you have the ability to ride the waves when they're ups
01:04:37 and when they're downs. Your investment policy needs to be one that keeps the capital in
01:04:43 there for the long-term. There will surely be a return and success on it, but it's around
01:04:48 the investment appetite on a sustainable basis.
01:04:52 [Esther Awoniyi]: Well, thank you so much, Cheryl. Now, we have
01:04:55 a plethora of questions that our audience have sent in and I'm quite thrilled to see
01:05:01 just the interest and of course the enthusiasm, and part of the audience sending in all these
01:05:05 questions via different online platforms. They're showing of course how very much interested
01:05:11 you all are on this particular topic. But I'm afraid that's where we're going to have
01:05:16 to live it with the questions. But of course, like I said earlier, this is just the first
01:05:20 in an annual series. The conversations will continue. You can continue to engage on the
01:05:27 MIGA platform. Social media handles, of course, continue to engage MIGA on this particular
01:05:33 topic.
01:05:36 You have been watching a live event hosted by the World Bank's Multilateral Investment
01:05:40 Guarantee Agency, MIGA.
01:05:41 I'm Esther Awoniyi, I've been your host and your MC.
01:05:50 (music)
01:05:54 For more on how MIGA is driving FDI to Africa, visit us at: www.miga.org

Driving Foreign Direct Investment (FDI) to Africa

Follow the event on Twitter #FDIAfrica

Foreign private investment in Africa has fallen dramatically as a result of COVID-19, with foreign direct investment (FDI) flows to the continent dropping by some 16% in 2020. And yet, FDI can be transformative for the region and is crucial for helping Africa get on the path towards long-term sustainability and growth. What will it take to attract private investors to the region? What examples can we learn from that can be scaled?

Join The Multilateral Investment Guarantee Agency (MIGA) and an accomplished group of experts, investors, and thought leaders as we discuss what it will take to drive foreign direct investment into Africa, especially into sectors that contribute to a green, inclusive, and resilient recovery, and into countries experiencing fragility, conflict and violence.

Use the following timestamps to navigate different sections of the video.

00:00 Welcome and opening remarks
09:00 Current state of FDI in Africa
11:52 Countries and sectors where FDI levels have remained steady
14:02 FDI flows to vulnerable countries affected by fragility and conflict
15:21 Outlook for FDI for the African continent
19:14 The role of MIGA in Africa
25:57 Stories from the frontlines: the impact of FDI in Africa
30:13 How COVID-19 affected FDI flows to Senegal
33:09 Perspective of the private sector and investors in supporting development projects
37:29 What countries need to do to further drive investor interest
40:58 MIGA's role in driving Foreign Direct Investment (FDI) to Africa
42:39 What Senegal is doing to keep FDI flowing to the country
46:44 Prognosis of FDI trends in Africa going forward
49:45 Opportunities for investments between countries on Africa
53:10 Investing in climate related projects in Africa
56:09 Policies that governments can adapt to catalyze FDI in Africa
59:19 Live Q&A: free trade agreements, competitiveness, entrepreneurs
1:04:53 Closing remarks

Speakers

David R. Malpass

Former President, World Bank Group
@DavidMalpassWBG
Amadou  Hott

Minister of Economy, Planning and Cooperation, Senegal 
@AmadouHott
Cheryl Buss

CEO, Absa International 
 @cheryl_buss
David  Damiba

Managing Partner  and  Chief Investment Officer,  Kasada  Capital Management 
Hiroshi Matano

Executive Vice President, MIGA, World Bank Group
@MIGA
Ethiopis Tafara

Vice President and Chief Risk, Legal and Administrative Officer, MIGA
@MIGA
Indermit Gill

Chief Economist of the World Bank Group and Senior Vice President for Development Economics
@IndermitGill
James X. Zhan,

Senior Director of Investment and Enterprise, UNCTAD 
@Jamesunctad
Nkem  Onwuamaegbu

Acting Regional Head, Africa, MIGA

Moderator

Esther Awoniyi

Journalist, CNBC
@Estheroawoniyi

Read the transcript

00:07 (music)
00:22 [Esther Awoniyi]: Welcome to everyone wherever you're joining
00:24 us from across the world. Thank you for tuning into this live event hosted by the World Bank's
00:30 Multilateral Investment Guarantee Agency, MIGA. I'm Esther Awoniyi, Business Anchor
00:36 at CNBC, Africa, and your MC and moderator for today. Thank you for joining
00:41 us. Today we'll be unpacking the theme, Driving Foreign Direct Investment to Africa, the first
00:47 in an annual series. In the next 60 minutes, we'll showcase investment opportunities in
00:52 Africa and share new thinking and discussions on FDI among a cross-section of experts, including
00:58 investors, policy makers, and economists.
01:00 [Esther Awoniyi]: We'd love for you, our online viewers, to
01:03 be a part of today's conversation, so please go ahead and post your questions, reactions,
01:08 and engage with the panelists and speakers from the platform you're watching this event
01:13 from. Please also share with the event hashtag #FDIAfrica. Once again, I welcome you all.
01:20 Now to help us kick things off, please welcome Mr. Hiroshi Matano, Executive Vice President,
01:26 MIGA, with some opening remarks. Over to you, Hiroshi.
01:31 [Hiroshi Matano]: Thank you, Esther. I'm pleased to be kicking
01:35 off
01:36 what I hope will be the first of an annual event series on FDI.
01:42 While we always look to innovate and introduce new product lines,
01:45 such as credit enhancement and support for trade finance,
01:48 FDI lies at the heart of what we do. We're the agency within the World Bank Group
01:55 mandated explicitly with bringing in FDI to developing countries.
02:00 Indeed, we were also charged in fiscal year '21
02:06 by issuing US$5.2 billion in insurance coverage for projects across the world.
02:12 [Hiroshi Matano]: However, this event is intended to be a discussion
02:16 and spur a conversation, not just showcasing the work we're doing. This is why we have
02:22 asked James Zhan of UNCTAD, who is Chief Editor of the World Investment Report, to set the
02:29 big picture stage for us. In the spirit of conversation and problem solving, we have
02:35 also asked experts and practitioners, including Honorable Minister, Amadou Hott, who works
02:42 every day on the challenge of bringing FDI to Africa, to share their thoughts on what
02:48 the challenge and opportunities are.
02:51 [Hiroshi Matano]: We focus in Africa this year because it had
02:54 been hit particularly severely as a result of COVID. FDI flow to Sub-Sahara Africa decreases
03:03 in 2020 by 12% to $30 billion. And Greenfield project announcements, key to industrialization
03:12 process in the region, dropped by a 62% to $29 billion, while international project finance
03:21 plummeted by 74% to $32 billion. These are big challenges and how they can be addressed
03:30 will be discussed further over the coming hour. I look forward to an enriching conversation.
03:35 Before closing, let me add in, that in addition to this public annual event, MIGA also aims
03:43 to host FDI dialogues in several African countries over the next few months, to ensure that this
03:50 conversation goes forth. Assuming safe travel goes practical, MIGA management and staff
03:57 look forward to meeting with investors and policy makers to further discuss the pressing
04:03 issues. With that, let me invite President Malpass to say a few words.
04:09 [David R. Malpass]: I'm very pleased to welcome you all today
04:15 to discuss a topic that is a critical part of driving sustainable economic recovery in
04:21 Africa. That is mobilizing private investments and FDI into the region. MIGA was established
04:28 33 years ago because the World Bank governors at the time realized that concerted action
04:35 was needed to increase capital flows to developing countries, without unduly increasing their
04:40 indebtedness. They built a foundational organization, MIGA, whose purpose is to drive FDI into developing
04:49 countries, through investment guarantees. Though that was a different era, we find ourselves
04:54 faced with new compounding challenges. Reversals in development, rising debt, a fragile global
05:01 economy, and the climate crisis. These challenging times however, also offer us a profound opportunity.
05:10 For Africa, FDI can help drive economic recovery, create jobs, generate taxes, open up participation
05:18 in global value chains and be a conduit for knowledge sharing. It has a great potential
05:26 to bring much needed investments in climate, infrastructure, and resiliency to Africa.
05:32 [David R. Malpass]: The COVID pandemic has had a big impact on
05:35 FDI. Flows into emerging markets fell 8% in 2020, and 16% to Africa. However, signs that
05:44 the continent will rebound as a destination for FDI are emerging, and foreign investors
05:50 are seeing green opportunities as well. Renewable energy investments into Africa actually rose
05:57 by 28% in 2020. Globally, the rise in sustainability-focused investments has been rapid. In 2020, the value
06:08 of sustainably themed investment products was $3.2 trillion, up more than 80% from 2019.
06:16 However, the vast majority of this is directed to developed markets and it's our collective
06:23 responsibility to channel more of this funding to developing countries, and Africa in particular.
06:30 Looking ahead, there are concrete actions that can be taken to best leverage FDI going
06:36 forward, that I'd like to put on the table. First, it's important to protect existing
06:41 FDI flows and preserve supply chains that connect foreign and domestic suppliers. Policy
06:47 makers need to review investment policy and promotion strategies to test which ones have
06:53 proven resilient and can support the early stages of the recovery.
06:58 [David R. Malpass]: Second, policy makers need to aim for returning
07:03 to pre-pandemic levels of FDI by focusing on the emerging competitive sectors. Analysis
07:09 of sector dynamics and investor consultations are key to confirm investment competitiveness
07:16 of these sectors. This will enable more targeted investor outreach, and promotion of strategies
07:23 that can position countries as investment destinations. And third, investment policy
07:30 reform should improve the value propositions in these identified priority sectors. Countries
07:36 should focus not only on attracting more FDI, but strengthening its impact so that it is
07:43 development oriented, and facilitates reallocation of resources toward long run economic transformation,
07:52 job creation, and inclusion. This will depend heavily on enabling the business environment.
08:01 Solid actions can lay the groundwork for improving overall business climate and investment conditions
08:08 to attract sustainable FDI.
08:10 [David R. Malpass]: The World Bank Group stands ready to work
08:14 with our clients on these critical issues. Our MIGA arm is well equipped to work with
08:19 private investors who want to be part of this sustainable recovery. I hope these discussions
08:25 will help untangle some of the challenges in driving FDI to developing countries, and
08:31 specifically to Africa. I hope we can collectively chart a concrete path of channeling investment
08:39 into the most impactful projects that deliver returns on human capital, broad based growth,
08:46 and sustainability. Wishing you all a very fruitful discussion. Thanks.
08:55 [Esther Awoniyi]: [inaudible 00:09:33] the significant drop
09:06 in FDI to Africa since 2020. FDI inflows remain the continent's key to sustainable growth.
09:14 Well, joining me now to give us a better picture of the state of, and trends in FDI flows in
09:20 developing countries and an outlook for the African continent is Mr. James Zhan, Senior
09:25 Director of Investment and Enterprise at the United Nations Conference on Trade and Development,
09:31 UNCTAD. Well, thank you so much, James, for taking the time out to join us today. Let's
09:35 just dive right in. What is the current state of FDI in Africa?
09:40 [James Zhan]: Thank you, Esther. I think for the current
09:44 state, I would say that FDI in Africa was hit hard but more resilient, with a quick
09:52 rebound. FDI in Africa was hit hard by the triple shocks caused by the pandemic supply,
09:58 demand and policy. But the decline in influence was much less than the world average. In 2020,
10:07 FDI to Africa declined by 16% to $40 billion. Most countries and regions within the continent
10:15 was affected. FDI inflows to North Africa contracted by 25% to $10 billion, with major
10:24 declines in most countries, such as Egypt, Nigeria, Sudan, and Tunisia. FDI inflows to
10:32 Sub-Saharan Africa decreased by 12% to $30 billion, with large declines in Ghana and
10:41 South Africa.
10:42 [James Zhan]: But nevertheless, FDI flows to Africa demonstrated
10:46 more resilient, compared with the rest of the world. Global FDI declined by 35% last
10:53 year with much more decline in developed economies, transition economies and the Latin America.
11:00 But for the current state I'm talking about, the first half of this year, FDI flows to
11:07 Africa rebounded with 16% increase, reaching an estimated $23 billion. For Sub-Saharan
11:15 Africa, we saw 22% rise with FDI reaching an estimated $18 billion, and the flows rose
11:23 strongly in Nigeria, Mozambique, Ethiopia, and South Africa. FDI remained flat in north
11:31 of Africa while flows to Egypt registered a very minor decline. They rose in Morocco
11:39 and Tunisia. So please note that the relatively positive picture mask the divergence in sectors,
11:46 types of investment, and the geographical distribution.
11:48 [Esther Awoniyi]: Well, positive indeed. But are there countries
11:52 and sectors where FDI levels have remained steady or which haven't been as affected by
11:58 the pandemic, and why so?
12:00 [James Zhan]: Yes, Esther. In some countries, FDI flows
12:04 remained steady or increased slightly. In 2020, for example, flows to Morocco remained
12:11 stable at $1.8 trillion. Morocco's FDI profile was relatively diversified with an established
12:20 presence of some major multinational companies in manufacturing sectors, including automotive,
12:26 aerospace, and the tech cells. Inflows to Nigeria increased slightly to $2.4 billion,
12:35 and to Senegal, FDI was higher. In fact, it increased by 39% in 2020. Central Africa as
12:48 a sub region registered an increase of FDI with inflows of $9.2 billion, and this increasing
12:55 inflows, in particular, in the Republic of Congo. Sector wise-
12:58 [Esther Awoniyi]: Okay. But what do you observe in... Oh, go
12:59 ahead. Sorry to interrupt you. Go ahead.
13:00 [James Zhan]: ... sector wise, the natural resources sector
13:02 will hit hard in 2020, but I had a rapid recovery in the first half of this year. The new investment
13:11 growth sectors was disrupted in 2020, but growing including logistics, financial services,
13:19 consumer services, and renewable energies. What is worrisome is the SDG, Sustainable
13:25 Development Goal sectors, are so seriously impacted, and it will take longer time to
13:30 recover. This includes transportation, water and sanitary, food and agriculture, health
13:38 and education. So the immediate challenge is to minimize the number of lost years in
13:46 terms of progress made towards SDG goals. The main concern in Africa is that the pandemic
13:54 could wipe out the development gains achieved over the last decade.
13:59 [Esther Awoniyi]: Hopefully that won't be the case. But what
14:02 do you observe in terms of FDI flows to more vulnerable countries? Are those affected by
14:07 fragility and conflict?
14:08 [James Zhan]: Yeah. For these vulnerable economies and low
14:11 incomes, I would say it's not worth it that FDI inflows to the 33 African least developed
14:18 countries, increased by 7% to $14 billion in the mid of the pandemic. As a result of
14:26 that, African LDCs perform the better than Africa as a whole. As I mentioned that, FDI
14:33 flows in Africa as whole declined by 16%. The inflows exceeds the 1 billion in five
14:40 African least developed countries. And the 500 meeting in another five. Ethiopia remained
14:47 the largest African low income countries recipient for FDI. In Mozambique, inflows grew by 6%.
14:56 And the Democratic Republic of Congo, investment increased by 11%. In Tanzania, investment
15:04 flows grow by 2%. Uganda failed by 35%. In Sudan, this decreased by 13%. So that's roughly
15:15 the picture of vulnerable and low economy [inaudible 00:16:01].
15:20 [Esther Awoniyi]: What is your outlook for FDI for the continent?
15:24 Obviously, we are hoping that the numbers do pick up going forward. We know that there's
15:30 still issues of debt. There are many African countries. The looming debt crisis were told
15:36 on the continent. Of course, multilateral agencies are trying to aid African countries
15:43 to ensure that they're not buried on all that debt. But what is your outlook for FDI for
15:47 the continent?
15:48 [James Zhan]: Yep. As the short-term and longer term. The
15:52 short-term prospects, I would see a rapid rebounce, but the full recovery takes a longer
15:58 time with uncertainty. So FDI in Africa, expected to increase in 2021. That's what we are witnessing.
16:08 But a full FDI recovery will take place towards perhaps the second half of 2022. Amid slow
16:17 rollout of vaccines and emergence of the new COVID strains such as Delta and the Omicron,
16:24 a significant downside risk persist for FDI in Africa and the prospects for an immediate
16:32 full recovery uncertain. Specifically, we see that similar to the global level growing
16:41 investor, confidence in Africa is mostly in infrastructure, both by favorable long-term
16:48 financing conditions, recovery, stimulus packages, and development assistance related investment
16:54 programs, and international project finance deals. In fact, it was up significantly in
17:02 value. And we also see that it's large deals in some power sectors.
17:07 [James Zhan]: Now, in contrast, investors' confidence in
17:11 Africa, in industry and global value chain remains uncertain. Greenfield Investment Projects
17:18 announcement continued their downward path. That's about 30% in value and 25% in number
17:28 of Greenfield projects for the first three quarters of this year. So that's the kind
17:33 of indicator for the immediate future of FDI flows to Africa. The recovery of investment
17:39 flows to Sustainable Development Goal related sectors in Africa, which have suffered significantly
17:46 during the pandemic with almost a double digit, declines across all SDG sectors. And they
17:54 will remain fragile.
17:55 [James Zhan]: The combined number of announced Greenfield
17:59 investment and projects, financed deals, fell by 32% in these SDG sectors. That's education
18:07 and water, sanitary and what I mentioned earlier. Longer term prospects in Africa for FDI, I
18:13 would say positive with great potential. So new opportunities due to global value chain
18:20 restructuring, which is going to happen, intensified business related international assistance
18:25 in Africa by major countries. The approval of the key mega projects, the Africans Continental
18:33 Free Trade Area Agreement, and this forthcoming sustainable investment protocol, could lead
18:39 to investment and picking up greater momentum beyond the 2022. So Africa is projected to
18:47 grow by 4.6% in 2021, and average of 4% up to 2025. All this will attract investment
19:00 in the years to come.
19:01 [Esther Awoniyi]: Well, fingers crossed on that. Thank you so
19:04 much Zhan, for talking to us today. Now we're moving quickly to our next segment [crosstalk
19:08 00:19:52].
19:09 [James Zhan]: Thank you to MIGA for inviting me.
19:11 [Esther Awoniyi]: We're moving quickly to our next segment,
19:14 where we go behind the scenes to get a good sense of the impact of FDI on the ground in
19:19 African countries.
19:22 [Nkemjika I. Onwuamaegbu]: Good morning. Good afternoon to everyone joining
19:32 today. I would like to take you through a quick tour of MIGA in Africa, and the role
19:36 we play in driving Foreign Direct Investment into the region. First, a quick overview of
19:43 what MIGA does. MIGA's investment guarantees can support a variety of projects, ranging
19:48 from pure private sector, all the way to public sector projects procured by governments. We
19:54 offer political risk insurance products to protect against transfer restriction and currency
19:59 inconvertibility, expropriation, war and civil disturbance, and breach of contract risks.
20:05 We also offer a credit enhancement product that protects against defaults of loans to
20:10 eligible host governments. MIGA has been supporting investments in Africa since its inception
20:16 over 30 years ago. Currently, Africa is the region with the largest outstanding gross
20:22 exposure, representing nearly 30% of our total portfolio exposure. That's six and a half
20:29 billion dollars in guarantees across 99 projects in 30 member countries across Africa. MIGA's
20:36 impact has been significant. 11 million Tons of CO2 equivalent avoided per year, 19,000
20:44 Gigawatts of power generation and 40,000 people employed.
20:49 [Nkemjika I. Onwuamaegbu]: Now travel with me across the continent and
20:52 take a closer look at some of our projects, where MIGA has worked with investors to uncover
20:57 the investment opportunity. Our first stop will be the Kasada Hospitality project. This
21:03 project spans 10 countries across Africa. Kasada, a hospitality focused private equity
21:10 fund, approached MIGA as it was considering building its portfolio of up to $1 billion,
21:16 into the hospitality industry across Africa. MIGA is providing total coverage of up to
21:22 $271 million to Kasada and its subsidiaries. The first set of projects to be covered, a
21:29 portfolio of eight Brownfield hotels acquired by Kasada and operated by a core in Cameroon,
21:36 Cote d'Ivoire and Senegal. A trend we've been witnessing is a gravitation towards Brownfield
21:42 acquisitions versus Greenfield projects in the post-COVID recovery. Greenfield project
21:48 announcements, which reflect investor sentiment and future FDI trends, dropped by 62% from
21:55 $77 billion in 2019 to $29 billion in 2020. Greenfield investments are particularly difficult
22:03 in the hospitality sector where existing capacity remains above demand.
22:07 [Nkemjika I. Onwuamaegbu]: For MIGA, the Kasada project was a great opportunity
22:11 to support a Brownfield investment that will preserve existing jobs and create new jobs,
22:17 directly and indirectly right away. As part of its $1 billion portfolio, Kasada will pursue
22:24 70% Brownfield acquisitions and 30% Greenfield developments. Kasada will prioritize projects
22:31 that have started construction, but have not been completed due to a lack of capital or
22:36 other economic pressures. Now let's move to Burkina Faso to discuss some solar projects
22:43 MIGA's supporting. Burkina Faso has one of the lowest electrification rates in the Sub-Saharan
22:49 African region. 20% as compared to 48% for the region overall. The country is striving
22:55 to address its energy access challenges and enhance its energy security. To advance energy
23:01 access in the country, MIGA recently issued over $5 million to French investor GreenYellow
23:07 that will cover its investments into a 30 Megawatt solar PV energy facility in [Magrionga
23:12 00:23:56].
23:13 [Nkemjika I. Onwuamaegbu]: What makes this project unique? The planter
23:16 anticipated to be part of the first round of solar IPPs in Burkina Faso, and will bring
23:21 much needed, clean and affordable power to the country. Our next stops are in Central
23:26 Africa, where MIGA has partnered with an innovative off-grid energy access company called Bboxx.
23:32 Bboxx is a next generation utility that offers off-grid energy solutions, including solar
23:39 home systems, alongside equipment like lights, televisions, and refrigerators. Bboxx is also
23:45 using energy as an access point to other services such as LPG cylinders and small gas burners
23:52 for clean cooking. Last year, MIGA issued guarantees of up to $37 million to a fund
23:59 managed by African Infrastructures Investment Managers, and almost $6 million in guarantees
24:05 to the facility for energy inclusions, off-grid energy access fund for their investments into
24:11 Bboxx. We saw a unique opportunity to drive investments into the company's innovative
24:16 business model, leveraging Pay As You Go mobile money payments and their off-grid solutions.
24:22 [Nkemjika I. Onwuamaegbu]: For our last destination, let's zoom out to
24:26 two Pan-African financial sector projects. In 2020, MIGA supported two African banking
24:32 groups, Absa and FirstRand, to boost lending in the region and increase bank resiliency
24:38 amid the COVID-19 pandemic. For Absa group, MIGA issued almost $500 million in guarantees
24:45 to help expand financing across seven countries. Freed up capital will be focused on financing
24:51 corporates and SMEs as well as on projects with potential climate corp benefits. In addition,
24:58 as part of the COVID-19 response program, MIGA issued guarantees to FirstRand to support
25:04 its subsidiaries. The guarantees free up capital, which allows the subsidiaries to continue
25:09 their operations and whether the pressures arising from the pandemic.
25:13 [Nkemjika I. Onwuamaegbu]: Both Absa and FirstRand projects are examples
25:17 of MIGA projects where financial institutions have tapped into MIGA's capital optimization
25:22 product, to help boost lending during the COVID-19 pandemic. Now, this is where our
25:28 journey ends today. And as you can see, from all corners across Africa, MIGA has been a
25:33 valuable and trusted partner for investors who want to invest in impactful project. MIGA
25:39 products not only deliver more security to investors, but they also can help reboost
25:45 Foreign Direct Investment in a post-COVID future. Thank you and have a great day.
25:52 [Video with French audio - English subtitles on screen]
30:15 [Esther Awoniyi]: That was a behind-the-scene look
30:18 impact of foreign direct investment
30:20 in developing countries. We're moving on now to our panel discussion
30:25 for this event.
30:26 Joining me for a conversation on Driving FDI to Africa
30:29 is Mr. Amadou Hott, the Honorable Minister of Economy, Planning and Corporation, Senegal.
30:35 Also joining us today is Cheryl Buss, CEO, Absa International. David Damiba, Managing
30:41 Partner and Chief Investment Officer, Kasada Capital Management, also joins us today. Please
30:46 welcome also Ethiopis Tafara, Vice President and Chief Risk, Legal and Administrative Officer
30:51 at MIGA. And last but not the least, Indermit Gill, Vice President for Equitable Growth,
30:58 Finance, and Institutions at the World Bank.
31:00 [Esther Awoniyi]: Thank you all for joining us, taking the time
31:03 out to join us today. A quick reminder to our audience, please post your questions to
31:08 our panelists. There will be a live Q & A session after the conversation. Also remember
31:12 to use a hashtag #FDIAfrica. Now let's get right to it. Let's begin this conversation
31:18 by taking the perspective from governments. Honorable Minister Hott, could you first tell
31:23 us how COVID-19 affected FDI flows to Senegal, and how the country has handled the challenge?
31:30 [Amadou Hott]: Thank you very much. And thank you to MIGA
31:35 for this opportunity and to CNBC for this opportunity. As we all know, the COVID has
31:41 affected FDIs in Africa, especially in Sub-Saharan Africa down 12% to $30 billion. But in Senegal,
31:49 we managed actually to increase FDIs thanks to the energy sector, in particular the investments
31:58 in oil and gas. We have major oil and gas project going on right now with expected first
32:04 oil production and gas production in '23. So the majors have been investing heavily
32:11 and therefore we managed to have a 39% increase to $1.5 billion. So really no investments
32:20 on the tourism sector, no investments virtually on all sectors. No FDIs basically.
32:26 [Amadou Hott]: But the government continue to invest during
32:30 this period in various sectors, but also put in place a economic and social resilience
32:39 program of about 7% of GDP that help us actually avoid recession. We finished the year at 1.5%
32:48 of growth in 2020. But in '21, we are seeing things picking up again with growth expected
32:56 at around 5% this year and next year, 5.5%. We've taken some measures actually to make
33:03 sure that we are attracting more FDIs in the short to medium terms.
33:08 [Esther Awoniyi]: Right. Thank you Honorable Minister. Now let's
33:11 bring in the perspective of the private sector and investors. I would like to ask both Cheryl
33:18 and David, how your firms have navigated the pandemic within the continent, and how has
33:23 the current situation changed your approach to supporting development projects? Cheryl,
33:27 please go first.
33:28 [Cheryl Buss]: Thank you, Esther, and delighted to be on
33:32 the panel today. As we all know, we're all wrapping with the effects, both long-term
33:37 and short-term of COVID, and obviously a great impact on GDP and a great impact on FDI as
33:46 we've seen across the continent. Absa operating in the 12 markets that we do across Africa,
33:53 I had to look and say, what is our plan going through the COVID crisis and through the pandemic?
34:00 And we really took two approaches, which was protecting lives and protecting livelihoods.
34:06 And so what we sought to do initially was to say, what is the medical support? How do
34:11 we get involved medically in terms of PPE, in terms of really availing the countries
34:18 in which we have a presence of support? And then most importantly, and the role as we
34:24 play in a bank and recognizing the importance of the social impact role that we play on
34:29 the continent, was around protecting livelihoods.
34:32 [Cheryl Buss]: So really getting involved in terms of looking
34:36 at giving support into the ecosystem, looking at giving deep relief on loans. We gave in
34:44 excess of $500 million of relief to clients. And so, really played a role. I think that
34:53 going forward, we see significant opportunity and I'm sure we'll unpack that later. But
34:58 although FDI is done at the moment, we see opportunity in the trade space really ignited
35:04 by the Africa Continental Free Trade Agreement, and that needs to be leveraged with the other
35:12 infrastructural support and growth that we see a wide gap, that we see investment opportunity
35:17 to. We will surely be there to support those opportunities of development.
35:22 [Esther Awoniyi]: Well, great. David you are up next.
35:26 [David Damiba]: Thank you, Esther. Thank you very much to
35:31 MIGA for having me on the panel and for giving us the opportunity as Kasada to mention what
35:37 we're doing on the continent, especially in this sector. We are focused on private equity
35:41 real estate with the focus on hotels in Africa, hospitality. The platform was launched in
35:47 2019, so you can only imagine that a year like 2020, which is a historic year in terms
35:54 of stress test in the sector, was enormous for our sector. We see ourselves as solution
36:01 providers in the sector that is already a large employer across Africa. And considering
36:07 the loss of the closure of hotels, the loss of jobs on the continent and the difficulty
36:13 for government to support a lot of the workers in the private sector like things that have
36:17 happened in the U.S. or Europe. We see ourselves as not only solution providers, but impactful
36:24 investors.
36:25 [David Damiba]: What we've done during the difficult year
36:27 of 2020 was basically readjust our approach to investing in this sector. Continue to be
36:33 countercyclical investors. It doesn't matter what time of the cycle we're in. We are long-term
36:37 investors in Africa and the sector. We adjusted a strategy a little bit by focusing a bit
36:43 less on Greenfield investments and more so when acquiring hotels that are already existing,
36:48 where we call Brownfield investments. It went from basically a shift in terms of investing
36:54 to creating jobs, to actually job preservation, as far as Kasada was concerned. We executed
36:59 that and we've acquired 10 hotels in the past 12 months. We are basically bringing our support
37:05 to that.
37:06 [David Damiba]: Hopefully most of the viewers have seen the
37:09 video before, where we've been able to acquire hotels and knowing you require them, but we
37:13 continue to invest in them. We are extremely bullish on Africa. We're very bullish on the
37:17 sector that requires our capital and we are here to help, and we're here to support it.
37:22 We're very much long-term investors.
37:24 [Esther Awoniyi]: Fantastic, David. Indermit, let me bring you
37:27 in here. From a bigger picture perspective, what is your assessment of what countries
37:32 need to do to further drive investor interest? What do investors and lenders need to get
37:38 better at to take advantage of investment opportunities?
37:41 [Indermit Gill]: First I want to thank you very much, and I
37:46 would really like to thank the Minister, Cheryl and David for those insights, because we learn
37:50 a lot from them. I'll just make two short points. I guess the first one is a fairly
37:56 obvious one, which is just as all African countries are not the same, all Foreign Direct
38:02 Investment, whether it's to Africa or to other parts of the world is not the same. One can
38:09 think of FDI as consisting of three types. The first type is resource-seeking FDI. These
38:16 are investments that are for accessing Africa's natural resources like minerals and metals,
38:23 and Africa gets a lot of these investments because it has a lot of natural resources.
38:27 The second is market-seeking FDI. These are investments to access Africa's growing markets
38:34 for goods and services. Now, Africa doesn't get a lot of these because its markets are
38:39 neither big, nor terribly well integrated. But they're getting bigger and they're getting
38:43 more integrated.
38:44 [Indermit Gill]: So these investments are to grow. The third
38:47 is what we call efficiency-seeking FDI. This is the holy grail of FDI in a sense, because
38:55 these are investments to access opportunities for cutting production costs by locating production
39:00 in Africa. These bring three things. It brings patient finance, it brings good jobs and it
39:08 brings socioeconomic progress. This is what is related to global value chains, because
39:13 most goods and services are not produced in one place any longer, they're produced in
39:17 many places. Africa ought to be a big part of this, but it isn't. So these are the three
39:23 things and they require different things. I can tell you more about that, but basically
39:29 for the first type of investment, what Africa really requires or what African countries
39:37 really require, are good institutions. For the second type of investment, it requires
39:42 good institutions, but it also requires good infrastructure. For the third type, it requires
39:48 both those two things, good institutions, good infrastructure, but it also requires
39:53 well targeted interventions. I'm sure that my colleague Ethiopis will actually tell you
39:57 about some of those.
39:58 [Esther Awoniyi]: Very well said Indermit. Ethiopis, let me
40:01 bring you in here. MIGA's role is to drive FDI to developing countries and Africa is
40:06 a priority region. What is your reflection on how things have gone over the past one
40:12 and a half years?
40:14 [Ethiopis Tafara]: Thank you, Esther. As the Honorable Minister
40:18 indicated, the COVID-19 pandemic has led to rising debt burdens as governments try to
40:23 combat the economic impacts. Mostly through prolonged lockdowns and disrupted normal economic
40:29 activity. In Africa, in particular, we've also seen a dramatic decrease in trade finance
40:35 available to businesses and governments, which in turn has significantly constrained imports
40:39 of critical consumer, corporate medical goods and services. But despite the impact of COVID,
40:45 we've had some interesting and innovative projects over the course of 18 months, including
40:51 our first support to an off-grid power project. Our first support to commercial and industrial
40:59 users of telecoms. Our first solar IPP in Burkina Faso. Our first geothermal IPP in
41:06 Ethiopia. The first IPP project for roads in Kenya. And first support for continent-wide
41:12 hotel asset acquisition platform, and you heard from David on this. But we've also witnessed
41:17 a number of trends, which I think are worth highlighting.
41:20 [Ethiopis Tafara]: We've seen an uptake in Brownfield asset acquisition
41:24 plays across the tourism power telecommunication and mobile money sectors. Large scale infrastructure
41:32 projects are being delayed or stalled as governments focus on economic recovery efforts, and corresponding
41:37 fiscal pressures. I was seeing a shift from publicly funded projects to consideration
41:42 of PPP structures, but with governments very carefully scrutinizing their potential liability.
41:48 We're seeing increased focus on water, telecoms, and digital infrastructure. A slow down of
41:54 FDIs, investors focus on building resilience in their current pipeline of projects. We
41:59 see governments considering renegotiation of existing contracts, particularly in fossil-fuel
42:06 IPPs. And then a shift towards distributed energy solutions off-grid, mini-grid, metro-grid,
42:14 and CNI solutions that don't rely on public sector offtake, but on a sustainable enabling
42:19 environment for investments over the long-term. And finally, we see continued interest in
42:23 renewable energy IPPs, in new African markets. It's highlighted with the Burkina Faso project
42:29 I mentioned earlier, as well as a focus on decarbonization of fossil-fuel based projects.
42:33 [Esther Awoniyi]: Well, thank you so much, Ethiopis. You make
42:36 some very good points there. Before I circle back to Minister Hott, just to tell our audience
42:39 that we do apologize for the audio issues that we've had. We're aware of them. We're
42:40 fixing them. And we thank you for your patience. Now, circling back to Minister Hott, let's
42:41 talk about solutions. What is Senegal doing now to keep FDI flow into the country and
42:45 what lessons can other countries and on the continents take away?
42:49 [Amadou Hott]: Thank you very much. We've been actually amending,
42:55 really focusing on reforms on one side, but also on another side, really developing what
43:02 we call the agropoles and special economic zones in the country. On the reform side,
43:09 we've been focused on several areas. Number one is, the Compact with Africa reform with
43:17 the German government, with the G20 initiative focusing on four key areas to attract more
43:26 FDIs, to facilitate the business environment. Number one, it is to focus on access to land
43:35 for [inaudible 00:44:38] means, access to finance, but also reforming the labor laws
43:43 and the labor administration process as well, so that it's more friendly. And lastly, focusing
43:50 also on human capital, basically on vocational training. So we have more young people being
43:58 able to address the needs of investors. The other type of reforms was the main one really
44:05 that have been keeping us busy during the COVID time, was the reforms on the PPP framework.
44:11 [Amadou Hott]: We had a very, let's say complex framework.
44:17 We definitely actually simplify the process, making on sure that the process is very clear,
44:29 very flexible, very diligent so that we don't waste time. During that reform, we also decided
44:35 to create a project preparation facility so we can prepare projects for the private sector
44:43 in various sectors. In the social sectors, including the healthcare sector, but also
44:50 on the economic infrastructure so that we borrow less and we help with the private sector
44:59 invest more alongside the government, with the government providing the facilitation
45:03 and sometimes some guarantees. I'm sure some of those PPP projects will need at the right
45:09 time MIGA guarantees, because sometime we have undertakings of the government, these
45:16 are the private sector. And if MIGA can cover and strengthen those undertakings, that will
45:22 facilitate the investment of the private sector. On the special economic zones, we are first
45:28 striking the construction of some of those.
45:32 [Amadou Hott]: For the agropoles also, we are first striking
45:34 the construction of those so that we can add value to our local production. We produce,
45:40 let's say a lot of peanuts. We produce a lot of cashew nuts and mangoes that are being
45:48 destroyed because we cannot consume everything fresh. We are trying to have those facilities
45:55 areas, those agropoles, so that investors can set up their own enterprises and industries
46:01 and transform locally at some value before exporting. I believe that one of the key lessons
46:07 is really to have a simplified PPP framework, but also to have a project preparation facility,
46:15 because otherwise we will not have investors. We usually rely on external project preparation
46:21 facilities, but sometime it takes time. And now we decided to have it in-house and we
46:27 will contribute our own money next to the investors to prepare projects together. Sometime
46:33 we prepare it alone and then hand over to the private sector who can then invest their
46:37 own money.
46:38 [Esther Awoniyi]: Thank you so much Honorable Minister for that.
46:41 I'm sure the private sector will be very happy just listening to those words. David, let
46:46 me bring you in here. What is your prognosis of FDI trends in the region going forward
46:51 and what kinds of opportunities are you looking into?
46:54 [David Damiba]: Yeah, I think we were pretty big believers
46:58 that FDIs, some of the countries that have added dip on it will rebound in the next few
47:03 years. I think if you look at GDP growth in Africa and what happened in 2020 and the rebound
47:07 that we're seeing in some of the economies in Africa, at the end of the day it ends up
47:10 being quite a bit of a resilient economy in general and quite diversified in its different
47:15 makeup. We're long-term believers in that. The only thing that we change is, as the cycles
47:21 advance and change, we just adjust the way we invest as I mentioned earlier. I think
47:26 what we're looking at now in the next 12 to 24 months is to continue to invest in the
47:30 hospitality sector. We're really investing close to a billion dollars.
47:34 [David Damiba]: We've already started our investment program.
47:36 We've been investing close to a billion dollars in the hospitality sector that is heavily
47:41 fragmented. On the downside, we will look at more Greenfield projects effectively as
47:45 well. We still want to focus on that as we still want to have that part of our portfolios.
47:50 So we will be looking at a few key ones and hopefully announcing them in a few months.
47:56 On the Greenfield, that's one case, and on the Brownfield, we'll continue to do that
47:59 because the pain that the hospitality sector has suffered over COVID, is not necessarily
48:04 going to be something that hotel groups and hotels will come out within the next few months.
48:09 It's going to be a long way out of that. So we remain solution providers. That's one key
48:16 thing.
48:17 [David Damiba]: Aside from these solutions, I think it's great
48:20 to also have the Minister on the panel, we also want to oftentimes work with government
48:25 effectively because we are one of the few investors who in the middle of this crisis
48:29 are going into countries, trying to invest, support jobs, and create jobs. So the more
48:35 we have discussions with the government, the more we can see good ways to work together,
48:40 create value. We have MIGA as also guarantors from providing insurance products. We have
48:46 the IFC funding us as well on the senior debt. We are bringing together all the different
48:50 support groups that can happen, but the government is extremely important in terms of attracting
48:54 private investors who can come in and do that. I think for us is, we don't really have specific
49:00 region where investors across Sub-Saharan Africa will continue our program, but most
49:06 importantly, post acquisition.
49:07 [David Damiba]: Our view is continue to spend money to reposition
49:11 assets in good quality, international standards across Africa. So then when you fly in from
49:16 Paris, London, and New York into hotels in Africa, the standards are maintained, but
49:20 the culture, the African culture, the culture of the country comes out in the asset as well.
49:26 So we will continue doing our investment program with a few tweaks here and there. And ideally
49:32 with the support of governments as well.
49:34 [Esther Awoniyi]: Well, David, you've said it. Well said. Especially
49:37 on the point with governments and the private sector. Outcomes are always better when there
49:42 is a better handshake between the government and the private sector. Cheryl, let me bring
49:45 you in here. What do you think the opportunities are for investments between countries on the
49:50 continent? Are you just as optimistic as David?
49:52 [Cheryl Buss]: Yes. I believe we are. I really think, and
49:57 depending on some of that, is the key milestone which was achieved this year, and that was
50:02 the implementation, the execution of the Africa Continental Free Trade Agreement, as I mentioned
50:09 earlier. During a time where the economies have been really hard hit by the pandemic,
50:14 it really does offer some economic promise and really offers the potential to stimulate
50:22 recovery out of the pandemic. And also offers new opportunities between Africa to Africa
50:29 trade, which is really needed. Now, the World Bank is looking at the Continental Free Trade
50:34 Agreement to uplift in excess of 68 million people out of poverty. This is a substantial
50:41 number. That being said, as successful as the Free Trade Agreement will be, or the area
50:47 will be, it's hugely dependent on consistent infrastructural development and growth.
50:53 [Cheryl Buss]: And as Mr. Gill mentioned, there are significant
50:57 gaps. There's significant FDI interest in the infrastructure space, but there's about
51:02 a hundred billion dollars per annum of infrastructural investment required. Although in some instances
51:10 we've seen that this has been slow, however, we are starting to see some projects that
51:15 are taking shape. Renewable energy projects, other power supply. We know that Africa has
51:21 a need for energy, which will then stimulate other sectors. We're seeing other infrastructural
51:27 development in roads, rail, port. We are seeing these developmental nodes pop up and importantly
51:35 tagged to that, which I think goes well with the goods and services, FDI required is obviously
51:41 digital. And I think that digital will continue to play a key role in the development and
51:49 infrastructural development. So really, I think what we are seeing is that economic
51:53 growth development and success are really linked to infrastructural development. That'll
51:59 result in positive return for investors.
52:02 [Cheryl Buss]: But I think also key to the success is the
52:06 link up and the partnerships that we see come about in public-private partnerships. These
52:12 are key critical, and I don't believe that there's one institution or one government
52:17 that will be able to do it themselves. And so it really will be about a collaborative
52:22 effort between commercial banks, between public sector, between private sector, and of course
52:28 importantly, with development financial institutions. We are proud to have a close collaboration
52:35 with MIGA. Earlier in the year, MIGA announced their support to Absa and the issuance of
52:40 guarantees nearly up to the tune of $500 million for Absa. These guarantees are valid for as
52:47 long as 15 years, and really allows Absa to have the relief to unlend into the SME sector.
52:53 This is also key critical to the continued development and the sustainable growth of
52:59 Africa.
53:00 [Esther Awoniyi]: Well, thank you so much for that, Cheryl.
53:01 Ethiopis, let me circle back to you. Our world leaders are to talking about economic recovery
53:06 that is intertwined with a sustainable climate focus recovery. How do MIGA products encourage
53:12 foreign investors to invest in climate related projects in Africa?
53:17 [Ethiopis Tafara]: Thank you, Esther. Guarantees are becoming
53:22 the instrument of choice for many in the private sector looking to invest in climate projects
53:28 in Africa. As a result, we and MIGA have been able to catalyze private sector finance for
53:34 climate projects, and we've delivered over 1.6 billion in guarantees in support of climate
53:41 finance transactions in Sub-Saharan Africa, since we started tracking climate transactions
53:47 in our fiscal year '16. Now, the bulk of MIGA supported climate finance projects during
53:53 that period, have supported the development of cross border renewable energy projects,
54:00 and solar, and wind, and hydro. However, we also covered projects that helped to green
54:05 the region's financial institutions that support energy efficiency and climate-smart agriculture.
54:12 Now increasingly working very closely with our clients, we're focusing our support to
54:18 enhance the climate resilience of our projects. This is particularly important, given the
54:25 regions' vulnerability to climate change.
54:27 [Ethiopis Tafara]: We're now marrying our expertise in financial
54:31 structuring and management of ESG and other risks that help mitigate the perception of
54:36 risk and investing in Africa, with our expertise in climate mitigation and adaptation. This
54:42 creates new opportunities for climate business. I'll mention three areas we're working on
54:47 taking this approach. First, we're looking to attract foreign investors into expanding
54:52 their presence in renewable off-grid and metro-grid energy, which can help underserved households
54:58 gain access to clean energy. Second, we're working with our World Bank colleagues and
55:04 bilateral partners in exploring how foreign investment can support decommissioning of
55:09 coal-fired power plants, in a transition to green energy, with MIGA potentially providing
55:15 guarantees against government commitments in that process. And finally using guarantees,
55:22 we believe we can help de-risk and scale up the region's role in carbon markets, given
55:28 its abundance of natural capital that can serve as a basis for carbon credits. So we
55:33 think working with the public and private sector, we're quite optimistic that we can
55:39 take in this approach, continue to mobilize for an investment into climate opportunities,
55:44 and support both mitigation and adaptation that will serve the development objectives
55:49 of the continent.
55:50 [Esther Awoniyi]: Well, thank you so much Ethiopis. Indermit,
55:54 Let me bring you in here. I believe this will be my last question to my panelists. Just
55:58 a quick word to our audience, and we will take about three questions. Thank you so much
56:01 for sending in your questions. We see your tweets. We see your retweets. Thank you also
56:05 for using the hashtag. We'll come and take about three questions from our audience after
56:10 this. So Indermit, let me just ask you this last question. What are the policies can governments
56:16 adapt that would further help catalyze FDI in Africa, particularly in transformative
56:22 sectors that foster greater equity and economic growth.
56:26 [Indermit Gill]: Excellent question, Esther, and a very difficult
56:30 question. But just as I talked about three types of FDI earlier, I want to emphasize
56:36 two aspects of this FDI. The first one is quantity, which helps the economy grow, the
56:42 second one is quality, which makes sure that the average African citizen actually benefits
56:47 from this growth. I think that if one looks at these three types of FDI, you actually
56:52 find that you have slightly different priorities in terms of quality and quantity. For example,
56:58 for resource-seeking FDI, I'd say that the top priority is quality. We want to be sure
57:04 that the FDI actually benefits the owners of these natural resources, the ordinary people.
57:09 For example, the deals made by foreign investors and say, oil in Chad or copper in Zambia should
57:16 be transparent and fair. That means that the folks who are bringing the money should earn
57:23 a fair return, but the government should get revenues and the people should get the benefits
57:28 of these revenues.
57:29 [Indermit Gill]: I think that the institution, the highest
57:32 priorities are resource sector governance and public financial management. Now for market-seeking
57:38 FDI, I think the big issue along the lines of what Cheryl said, has to do with integration.
57:45 Basically, this is because Africa is fragmented into many small markets, much as how Europe
57:50 was 30, 40 years ago. But Africa, if it were just one economy, it would be $3.5 trillion.
57:58 But the problem is that Africa has a lot of small economies, so you have to integrate
58:02 these markets and the [ACFDA 00:59:07] will definitely help in this one. But this is very
58:10 difficult business. One has to be patient because even the European single market has
58:16 a lot of unfinished business, especially in the market for services. So one has to be
58:20 patient with this one. The third part, the part which is going to be the hardest is the
58:27 efficiency-seeking FDI.
58:28 [Indermit Gill]: Here you want both quality and quantity. This
58:31 is a massive agenda. Basically, any developing economy has to get help from organizations
58:40 like the African Development Bank, the World Bank, the IFC, and of course, MIGA, because
58:45 this means that you have to take big risks when you're bringing in FDI of this sort.
58:51 And because this means locating a part of your production, that is part of a larger
58:57 global value chain in a poor country, political stability starts to matter. Infrastructure
59:02 quality starts to matter. All of these things. And you have to get this mixed right. You
59:06 can't rely just on fiscal incentives, just on special economic zones, and so on. Those
59:11 will be important, but you need all of these other things along the lines of what the panelists
59:15 have said.
59:17 [David R. Malpass]: Thank you so much, Indermit, and also a big
59:21 thank you to all our panelists for today. Sharing this very insightful comments and
59:26 of course, on Foreign Direct Investment on the continent, how the private sector can
59:32 have a better handshake with government. And of course, mounting all the challenges, particularly
59:37 this post-COVID world that we're all living in. Thank you so much for your time today
59:42 on the panel. Also, thank you to our audience. Just as quickly, I mentioned that we know
59:47 we're running slightly over time, but we just want to quickly accommodate some of our audience
59:53 questions. I'll just quickly take one. And perhaps I'll just choose one of the panelists
59:57 to answer the question. I'll start with this question. Perhaps the Honorable Minister Hott
01:00:03 can answer this question for us. It says, how can FDI accelerate the growth of the African
01:00:09 Continental Free Trade Agreement? I know that is already in effect. Continental 1.2 billion
01:00:17 people, potential GDP of $2.5 trillion. Minister Hott, what are your comments on this?
01:00:24 [Amadou Hott]: Yeah, it's a great question. We definitely
01:00:30 need more FDIs towards Africa or intra-African FDIs basically, so that we can produce more
01:00:40 in Africa and sell within Africa. Because otherwise, the Continental Free Trade Area
01:00:48 will just provide the opportunity for people investing outside the continent and producing
01:00:54 outside the continent, to just export massively into our continent by going through, let's
01:01:00 say some countries, to reach the whole continent. This Continental Free Trade Area will be quite
01:01:08 interesting. If the investments is happening inside Africa, the value added is happening
01:01:14 inside Africa, and then exporting to other African countries, from one African countries,
01:01:25 let's say. I think our governments have to really fast track all the reforms to make
01:01:30 the business environment friendlier so that people can say, let me go to Africa, produce
01:01:38 there, sell into Africa, instead of producing outside the continent and then export into
01:01:44 our continent.
01:01:45 [Esther Awoniyi]: Yeah. Thank you so much Honorable Minister
01:01:47 for that. Now this next question, I think I'm going to pose this question to Ethiopis.
01:01:51 Now it says, are there any criteria that make a country more favorable and open to Foreign
01:01:56 Direct Investment? Mr. Tafara, if you could answer that.
01:02:05 [Ethiopis Tafara]: I started by saying certainly, Esther. There
01:02:12 are conditions that make for a more favorable setting for Foreign Direct Investment. It
01:02:21 obviously depends on the sector, but the regulations around a given sector's activities frequently
01:02:30 will determine the comfort and the appetite that Foreign Direct Investors have, for pursuing
01:02:38 a project or an investment in that particular country. So it very much depends on the sector,
01:02:44 but certainly the ability to get your money out is a critical factor. The ease with which
01:02:52 you can get services and products that you need for a particular project investment is
01:02:59 also a factor.
01:03:00 [Ethiopis Tafara]: There are a number of factors. But yeah, I
01:03:03 think you'll have to look at the particular sector in which you're interested to develop
01:03:07 as a government, as a country and determine what you may need to ease in terms of regulation
01:03:12 or which may need to change in terms of regulation, to actually facilitate the investment that
01:03:16 you're seeking. It will be very sector specific. But investors usually have a bottom line,
01:03:24 frequently have shareholders, and they have criteria that they meet. So taking those into
01:03:29 account, you can determine what you may need to do, to make it easier for direct investors
01:03:37 to consider your market.
01:03:38 [Esther Awoniyi]: Very well said. Cheryl, perhaps I can ask
01:03:40 you this. We're just going to take this last question. What criteria should businesses
01:03:45 and entrepreneurs meet or tips to keep in mind when an opportunity such as FDI is presented
01:03:51 to them?
01:03:52 [Cheryl Buss]: I think that one of the biggest things is
01:03:54 around long-term appetite. You know that Africa can be quite cyclical, so even investors looking
01:04:01 at coming into Africa with a short-term investment attitude, I don't think that's the right continent
01:04:10 for investment. I think that Africa is one that will offer great return. It offers great
01:04:15 opportunity. But the investment and the real commitment has to be there. It has to be long-term
01:04:19 in nature, and then it has to have the ability and the sustainability to handle the waves
01:04:25 that may come. We've seen how economically hit Africa's being, through the COVID pandemic.
01:04:32 And so you need to know that you have the ability to ride the waves when they're ups
01:04:37 and when they're downs. Your investment policy needs to be one that keeps the capital in
01:04:43 there for the long-term. There will surely be a return and success on it, but it's around
01:04:48 the investment appetite on a sustainable basis.
01:04:52 [Esther Awoniyi]: Well, thank you so much, Cheryl. Now, we have
01:04:55 a plethora of questions that our audience have sent in and I'm quite thrilled to see
01:05:01 just the interest and of course the enthusiasm, and part of the audience sending in all these
01:05:05 questions via different online platforms. They're showing of course how very much interested
01:05:11 you all are on this particular topic. But I'm afraid that's where we're going to have
01:05:16 to live it with the questions. But of course, like I said earlier, this is just the first
01:05:20 in an annual series. The conversations will continue. You can continue to engage on the
01:05:27 MIGA platform. Social media handles, of course, continue to engage MIGA on this particular
01:05:33 topic.
01:05:36 You have been watching a live event hosted by the World Bank's Multilateral Investment
01:05:40 Guarantee Agency, MIGA.
01:05:41 I'm Esther Awoniyi, I've been your host and your MC.
01:05:50 (music)
01:05:54 For more on how MIGA is driving FDI to Africa, visit us at: www.miga.org

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