This week, a group of high-level American and African investors will be travelling with me to Abidjan and Dakar. It is the first of several investor trips now planned for the region.
Collectively, we will be bringing financial resources, networks that cross industry sectors and regional boundaries, and a strong track record of developing successful projects that create jobs and economic growth.
Perhaps the most important element of what we will bring, however, is our message.
We will be broadcasting our confidence in—and solidarity with—the people and promising economic future of West Africa in order to attract other investors from around the world.
Our confidence is manifest in the decision of my agency, the Overseas Private Investment Corporation (OPIC)—the U.S. government’s development finance agency—to officially open a brand new representative office in Abidjan.
This is our clear, concrete investment in the future of the region.
We take this step, in part, to acknowledge progress. Senegal, Benin, Togo, and Cote d’Ivoire recently ranked in the top 10 nations not just in Sub-Saharan Africa but in the entire world based on the number of investor-friendly reforms. This momentum is encouraging growth for the market of 300 million people throughout West Africa.
When I lived in West Africa nearly 25 years ago, my town had no consistent piped water, no paved roads, only intermittent power and, of course, no land lines for telephones much less cellphones and computers. Foreign aid, rather than foreign direct investment, was a dominant feature of the economies.
And now 25 years later, foreign direct investment into Africa has grown by 800 percent?
African nations are now regularly topping the lists of countries making investor-friendly reforms? Over the past two years, Africa has ranked first in the world in the number of reforms enacted.
African economies are now forecasted to grow 30 percent faster than the rest of the world?
When nations begin to make efforts to pave the way for private investors, OPIC can use its tools to help stimulate and encourage investment. We provide long-term loans, loan guarantees and political risk insurance to private sector investors, large and small. As a development agency, we select only those investments that have a positive, enduring development impact on peoples’ lives.
OPIC, for example, is a major lender to the Cap des Biches project, a high-priority initiative that will provide electricity to more than 100,000 Senegalese.
Under the administration of President Obama, OPIC has made Africa a major priority.
Our financial commitments to private sector projects in Africa have grown from single digits to nearly 40 percent of our portfolio last year. Cumulatively, nearly one quarter of our $20 billion portfolio is now invested on the continent.
I have seen how our financing of diverse projects—which range from private schools, health clinics and small-scale renewal energy to large-scale port rehabilitation, power plants, and water and sanitation—has created jobs and improved lives. Of equal importance, the financial performance of these projects continues to be just as good as, if not better than, the performance of our investments in other regions.
What type of investors should countries in West Africa be targeting? We believe the investors we are bringing to Dakar have all the characteristics that West Africa should be seeking. They are prepared to work with strong local partners. They have deep experience. They have proven track records. They have a commitment to responsible investing. In short, they have the best interests of Senegal at heart.
Nations and cities in the global economy compete intensely for such investors. They want to attract these investors because they know that, when projects succeed, high-quality jobs, economic growth and innovation follow. However, these competitions cannot be won with business cards, glossy brochures and hospitality. They are won through reliable transparency in public sector procedures, consistent and fair application of rules and regulations, and efficient and effective contract enforcements. Those are essentials.
The convergence that we see of reform-minded governments, on the one hand, and responsible global companies in search of markets, on the other, is very exciting. It is cause for optimism.
When we can bring the innovative technology, advanced financing and world-class management of leading US companies together with the dynamism, untapped potential and growth of West Africa, we can do far more than envisage a brighter future. We can build it together.
The author is president and CEO of the Overseas Private Investment Corporation, the U.S. government’s development finance agency.