Dangote, President of the Dangote Group.
I thank you very much. In the name of God, the Most Gracious, the Most Merciful.
Your Excellency, President Abdel Fattah el-Sisi, the visionary leader.
Your Excellencies, Presidents of African states and governments. I would also like to thank His Excellency Obasanjo, who traveled from Kenya to here. I don't know how he got here at his age.
My colleagues from the private sector, ladies and gentlemen, it is an honor to be among you today here in the City of the Two Holy Mosques, and especially to participate in this dialogue — a dialogue that invites us all to think about the future of our beloved continent.
We are living in an era where many changes have affected the global economy. Trade is now dominated by geopolitical supply chains that depend on national security and geography. Energy has once again become the focus of diplomatic policies and investment decisions, and governments around the world are rediscovering industrial policies. The world is facing a great deal of disruption, and the role of the economy has now become subject to change. Africa is no stranger to this environment.
The question before us is: how can Africa achieve higher growth? We must ask ourselves this question — what kind of growth can drive Africa forward in a world that has become divided and less predictable? For me, this must be the very core of a new covenant for Africa. We want to transform African economies for growth.
We used to celebrate increases in gross national income as an indicator of growth, but growth alone is not enough. In which areas is this growth achieved? What local opportunities does it create? What jobs does this economy provide? And what economic resilience exists?
Africa represents 18.5% — half of the world's population — but only 2% of the value added in global trade, and 0.8% of high-tech exports. This gap does not only shed light on gross national income; it represents a challenge. Africa could achieve significant growth in gross national income while remaining a country dependent on importing food, machinery, medicines, and vital technologies. Such an economy may grow steadily, but it becomes more structurally fragile.
The next phase of development in Africa must concern itself not only with the process of growth, but with shaping that growth and its strength. This requires a fundamental transformation as Africa moves toward greater capabilities. In fact, Africa possesses many capabilities: we hold a large share of minerals essential to manufacturing future technologies, we have vast agricultural lands representing about 60% of the world's cultivated land, and we have large areas for generating renewable energy, as well as young populations, with a large proportion under the age of...
Through the African Continental Free Trade Area, African markets are indeed available, and skills therefore become a key advantage for African economies. Africa is indeed a strong and vast continent, but there is a need to support the different economies. Manufacturing in a single African country does contribute significantly, yet there are different regulations in each African country, different systems, different payment systems, and different border procedures from one country to another, in addition to different logistics and logistical obstacles.
But even with this African trade, we still have many opportunities. For example, what we consume in Nigeria differs from the consumption of Togo or Ghana or other countries. There must be alignment. These figures show the problem: only 16 out of 46 African countries manufacture intermediate goods, and more than half of the continent's exports and imports involve five economies outside Africa. Therefore, neighboring economies must all be interconnected. This fragmentation or division is what weakens Africa. Businesses in Africa are smaller than required, and investment decisions become more difficult. This common market does not translate into a strong or shared economic power.
The African Continental Free Trade Area offers us all an opportunity, but we must think of this agreement not only as a trade agreement — there must be an expansion of infrastructure so that investment becomes possible within the African continent, and so that this investment crosses African borders. We must also design a market that aims at 30 million people — this is one of the proposals, and there is a need for more proposals so that there is genuine integration.
Your Excellencies, distinguished guests, there is another issue that requires more attention. African entrepreneurs do not lack ambition; what limits them is the cost and the environment in which they operate, and this increases competition. Of course, the cost here relates to the cost of capital, the cost of transport, the cost of logistics, and the cost of crossing borders. Sometimes there are costs related to existing policies that are not characterized by certainty.
The gaps in infrastructure in areas such as transport and energy, among others, make costs increase by 50% above the global average. The African factory competes globally with lower costs in other markets. This increases the cost of African goods. If we want investment to move from trade to manufacturing, we need long-term assets and we must work to reduce these costs. This is possible, and we have proven that we can do it, as we supply more than 20% of the energy used by the European Union.
There must be a revision of policies. We must understand the cost of manufacturing a single good and compare this cost with similar economies. Also, the number of hours lost in business due to the unavailability of electricity — which is the case in many African countries. How much time is needed to reach the airport? How much time is needed to reach the markets? How can we cross borders? This question may seem operational, but collectively we need to make these decisions in order to strengthen industry in Africa.
Everything that affects industry in Africa is energy, and there is a need for energy-related infrastructure. The formation of energy in Africa remains always important, but obtaining energy is only the starting point, and it of course helps business operations run. For several decades, the average per capita electricity consumption in Africa was much higher than that of India or Central Asia. But today, per capita electricity consumption in India has risen significantly and increased at a higher rate in Southeast Asia. The expansion in the use of electricity and electricity supplies helps trade and helps stabilize manufacturing operations.
Manufacturing operations greatly help African economies, but this has also led to an increase in household electricity consumption. Therefore, there is a need for an integrated energy strategy that helps achieve industrial ambitions. We must start by thinking of energy from an economic perspective, especially energy-intensive industries, and think of investment corridors, agriculture, financial centers, technology, clusters, and major cities. Energy systems must be platforms for developing other industries, and we must stop importing raw materials and instead export fully manufactured goods.
The new growth covenant includes private sector companies, and in this dialogue we must choose between the state and the market. Africa does not have markets that allow for assistance; we cannot support the private sector unless there are strong governments. We must support entrepreneurs and encourage them to have competitive businesses. The challenge is not deciding which side we should lead, but these institutions must help both the state and the private sector succeed — they must do what is best in terms of the policies put in place and in encouraging entrepreneurs, making prosperity available.
Of course, providing infrastructure and protecting market integration are two important matters, and markets need capital to build companies and provide the right environment. When these roles are integrated, we find an increase in investments. And of course, capital always defends itself and always tries to reach favorable environments that help it operate. Therefore, today's legislation is what helps make tomorrow's decisions. There is also a need for an African approach so that there are global partnerships. Africa must be a participant in every economic center. We need investments, technology, markets, and partnerships from all over the world, but the quality of these partnerships must rise so that we help Africa. A good partnership helps African capabilities and provides the necessary skills, and this helps local companies work with modern technologies and enter global markets. As much as possible, we seek to participate in global value chains. Africa will not seek a place in the global scene; rather, we must define our economic destination and seek the partnerships that will help us reach this goal.
Ladies and gentlemen, the global disruption we are witnessing today may continue for some time, and Africa will not remain at the mercy of any event happening far from Africa's shores. But our economies must be resilient in the face of these disruptions, and Africa must become a base for precision industries and complex industries. The industries in Africa have so far been small, but with time and with the necessary financing, Africa can define its economy and its growth, and Africa can provide the materials needed for global markets, especially in the field of technology. This option will be the reason for Africa's new growth.
We are about 20 years away from 2050, and therefore Africa must be the supplier of food, mineral materials, fully manufactured goods, and more. The world we live in today is changing, and this gives Africa a rare opportunity, as we need to have a fixed place in the global economy. We can design this economy, and this must be the ambition of African governments and African partners, to secure Africa's share of growth and to increase Africa's capacity to create this growth.
I would like to thank all our leaders for providing this support, especially Afreximbank, because many countries would have faced many difficulties were it not for Afreximbank. I can say in my testimony that without Afreximbank and the other banks, we would not be where we are today. I thank you for giving this opportunity. The visions of our leaders are extremely important. Foreign banks will not help us develop our continent — only Africans will develop Africa, not anyone else. Africa must unite for the development of Africa.
For this reason, our group supports Vision 2030, and we are currently investing over four years about 50 billion dollars, and we have invested only in Kenya about 16 billion dollars. We have done this work and obtained the approvals, so we welcome all cooperation with us today. What I want to commit to before our leaders is: if you allow this agreement — the free trade agreement — to exist, with free movement of people, services, and goods, if we do not interact with one another, there is no other way to build the Africa we dream of.
I know that prosperity, job creation, and other matters require stability, and this stability provides jobs, as we have the youngest populations in the world. If we do not cooperate with one another, we will face difficult times. Thank you.
