West Africa, said EBID CEO Christian Adovelande speaking through a translator, has a wealth of resources from oil to cocoa, yet very little investment has been made there.
Of the nearly $1-billion in finance loans provided since inception, the IDC has invested only $95-million in the region, while sub-Saharan Africa sees less than 5% of the world's foreign direct investment and less than 2% of world trade.
But moves to cancel the debt of the world's 18 poorest countries, of which five are in West Africa, should create better conditions for investment in the region.
With the signing of the agreement between the two organisations, South Africans will have access to investment funds that can be used in the 15 member states of the Economic Community of West African States (Ecowas), and the 240-million people living in the region have an opportunity to invest in South Africa.
Higher rates of economic growth will flow as a consequence as there will be numerous opportunities for cross-border investment, as well as extraction and beneficiation of natural resources.
In addition, the agreement will see cooperative coinvestment between the two, skills sharing, technology sharing and a possibility of joint ventures, said IDC CEO Geoffrey Qhena.
“Since our entry into West Africa nearly five years ago, the IDC has invested in projects with value in excess of $95-million.
“These investments are largely in Nigeria and Ghana in the areas of tourism, telecommunications and mining.
“The barriers created by different cultures and language(s) have seen us struggle to make meaningful progress into the remaining 13 member countries of the Ecowas region.”
However, events have now progressed to the point where the IDC is looking at projects in countries such as Togo, Mali, Senegal, Cape Verde, Gabon, Sierre Leone and Benin.
Yesterday's signing of the memorandum of understanding, which comes three months after the IDC visited Togo to see how it could implement its African mandate, will ensure that the IDC can expand its footprint in the region.
Now firms will be able to invest in infrastructure and resource projects to aid in growing the economies of the two regions.
There is, said Adovelande “an enormous opportunity to invest”, especially as the agreement will facilitate better investment decisions, better opportunity identification and better mitigation of risk.
Qhena said that the IDC, through this relationship, has a better understanding of the region and understands what challenges face companies, especially smaller firms, when looking to invest in West Africa.
In light of this, a line of credit to the tune of $50-million is being discussed to help small, medium and micro companies invest in projects in Africa.
The terms of arrangement should be finalised soon, said Qhena.
Other agreements with countries in the Southern African Development Community are also been investigated.
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