Growing regional confidence is attracting rising international investment in Central Africa, says Matthieu Le Roux, Of Counsel - Miranda Correia Amendoeira
Douala, the commercial capital of Cameroon, is a changed city these days - a giant building site scattered with cranes, excavators and other heavy lifting equipment. Concrete, tar and bricks line the city’s main artery, a testament to the ongoing construction boom of offices, conference centres and hotels for the multinationals being drawn to this regional powerhouse. But for the city’s almost two and a half million inhabitants, who have to brave the burgeoning traffic jams, there is good news. Consortiums from the world over will soon be vying for a slice of the Government-initiated tender to develop a tramway system – one of six transport projects now being developed in Cameroon. It is not just the world waking up to Central Africa; Central Africa is waking up to itself.
Beyond oil and mining
The region’s abundant natural resources are no secret – oil and gas, precious, semi-precious and industrial minerals and timber have attracted investors from Europe, the US and emerging economic giants such as China, Brazil and India. These sectors have remained healthy despite geopolitical turbulence and the financial downturn and continue to provide the cornerstone for much of the Central African economy.
Gabon is in the process of licensing new oil blocs, while Congo’s US$10bn Moho Nord offshore oil project (Brazzaville) – jointly financed by Total, Chevron and the Congolese State Oil Company (SNPC) – is attracting companies from around the world to provide support services. Mines in the mineral-rich Katanga province of the Democratic Republic of Congo (DRC) are being eagerly acquired by Chinese consortiums.
But the new wave of growth engulfing the region is also embracing new sectors. The biggest projects focus on transport infrastructure to enable local consumers to, for the first time, access their own countries’ resources, natural or otherwise. Cameroon’s planned 315km US$300m Limbe to Yaounde oil pipeline and expansion of its railway network come to mind.
Ports are being modernised, such as Congo’s Mossaka and Libreville in Gabon. New highways and airports are being built to facilitate access within and across the region. What is even more encouraging is the deep involvement of the State in developing, implementing and accelerating projects, most through public-private partnerships and with strict planning and project delivery timetables.
Central Africa is likewise rapidly connecting to the outside world through cutting-edge communications technology. Cameroon has launched a new airtime distribution system using Electronic Payment Terminals, while the Gabonese Telecommunications Agency (ANNIF) has declared 2013 “The Year of the Internet” aiming to increase the number of users and coverage in rural areas. International cable conglomerates such as Canal+ are already investing in the country.
Central Africa’s renewed confidence in itself is being reflected by increased international investment. The World Bank has proposed funding for the construction of the DRC’s long-awaited Grand Inga Project – the world’s largest hydroelectric project and which may provide up to 40% of Africa’s electricity needs.
Winds of change – supranational and national developments
Central Africa’s Governments are aware also that attracting business and ensuring that investment benefits trickle down to the local populace requires a change of attitude in some parts. Among the long-term objectives is a process of legislative modernisation and the tilting of legal systems to better facilitate business, providing certainty for both local and international investors, in order to be a help not a hindrance to growth.
Eager to change the public’s perception of bureaucracy, corruption and rusty legal machinery, Central Africa is drawing on established precedent and the adoption of common legislation at a supranational level, through organisations such as OHADA (L'Organisation pour l'Harmonisation en Afrique du Droit des Affaires), the Central African Monetary and Economic Community (CEMAC), the Inter-African Insurance Markets Community (CIMA) and the Common Market for Eastern and Southern Africa (COMESA).
Membership of such organisations has proved to be catalyst for the establishment of uniform rules on corporate, customs, banking, securities, insurance and antitrust matters. The creation of one-stop business centres, such as the Gabon’s Business Development Centre (CDE) and the Business Start-Up Centre (CFE) in Congo (Brazzaville), are helping to streamline company registration and formation procedures. To further encourage levels of international investment, rules on foreign business initiatives have been relaxed though the establishment of Investment Charters such as in Gabon; likewise, where Government oversight of projects has been strengthened through a new Public Procurement Code.
In a nutshell, Central Africa is no longer merely a place to extract resources but is a bona fide market with a huge consumer base. It is a region readier than ever to welcome investors. Are you ready for Central Africa?
Matthieu Le Roux is Of Counsel at Miranda Correia Amendoeir. He can be contacted at: