Alain Laridon : “Being a small island economy, we need Africa more than ever before”

Alain Laridon, former MP and a diplomat, elaborates on different strategies that would launch 
Mauritius as a viable partner in building businesses and contributing in generating healthy wealth for 
the African continent.

What are the different opportunities for Mauritius in Africa?
Through the launching of Mauritius-Africa Fund, we should encourage local enterprises to invest in Africa. We should revamp the fund. First, it will participate in the equity financing of businesses, investing in viable projects in any African countries. As human capital, it will provide jobs to Mauritian professionals and consultants. They will participate in the development of Africa. Mauritius must be used as a gateway for India and China to invest in African countries. These countries can use Mauritius to invest in African countries. This will allow Mauritian professionals to work in African countries.

How can we tap into the potentials of African markets?
Mauritius has to intensify its efforts to provide support to local investors (African) for forays into the African continent, which represents tremendous investment opportunities. We have to develop ‘Artificial Intelligence’ to a large extent. Mauritius is now a key player on the African growth agenda following the creation of the Africa strategy. The newly created Africa Centre for Business Excellence, an Economic Development Board initiative, has further helped to position the country as a gateway to Africa by identifying business and employment opportunities for Mauritians. Africa is an emerging market in many fields - we have to take advantage of it. Mauritius can strengthen economic cooperation with the African continent in areas such as financial services, medical facilities, education sector and the ocean strategy, among others.

Do you believe exporting towards Africa can be beneficial to us? 
The export to Africa strategy is very important. The government should continue to assist Mauritian exports enterprises eying the African markets. Mauritius should also continue to cement its position as the gateway to Africa by organizing high level conferences under the BOI across the continent to showcase Mauritius as a trusted partner. Moreover, Mauritius should establish greater cooperation at the institutional level, share experience, encourage best practices and increase networking. Mauritius should also organize roadshows in many African countries, if we seek business with African countries.

As long as governments implement regional free trade policies such as abandoning export and import bans and removing non-tariff barriers, production for domestic markets will become increasingly attractive."

What about the risk factors we need to overcome? 
New infrastructure, connectivity networks and new technology continue to spread out throughout the continent. For all the above mentioned reasons, there have been manifestations of exuberant interest from all over the world to do business and invest in Africa. For instance, Brazil, Russia, India and China. These are all members of the BRICS group. South Africa, accounting for one third of sub-Saharan African economy and being regarded as an influential member country of Africa, was invited in 2010 to join the enlarged BRICS group, as it was felt that the strategic interest of the BRICS in Africa will strengthen the position of South Africa as a leading regional power and a gateway for other BRICS countries to the African market.

So, do you believe that BRICS can play a major role in the African market? 
The motivations of the BRICS to engage in Africa stem basically from their interests in the continent’s reserve of resources of all sorts and in particular the natural resources. Equally attractive for them have been the prospects that they can tap into the vast potentials of Africa’s agriculture, which remains this far under-exploited. BRICS know that they can reap yet richer dividends, as they are able to bring in massive investment capital into Africa.

In this context, does Mauritius need to act fast and penetrate the African market? 
Considering the importance and impact of the new BRICS engagement in Africa, it becomes imperative for us to review our strategies as to how and where Mauritius will pitch itself in its dealings with Africa. Equally important is to know how we make best use of our membership of the African regional and sub-regional blocks as well as our privileged relationship with BRICS themselves and with other development partners like EU, US and Japan, who also have strong trade and business interests in Africa.

Finally, does Mauritius need Africa or does Africa need Mauritius? 
A pertinent question then is: How to craft our own business model in Africa? Being a small island economy, we need Africa more than ever before. The 53 countries of Africa have their own specificities and peculiarities, though there are some identifiable commonalities. We cannot obviously go all over Africa at once. Nor do we have big cheque books to use to ease our market entries. Our competitive and comparative advantages are probably related to a few sectors and clusters. We need to identify these and organize ourselves probably better through strategic alliances; including with BRICS countries. We need to seriously look at different scenarios and options.

Which African countries have we ignored so far? 
First, there is South Africa, where there are lots of acres of unexploited lands available. Second, Zimbabwe, where unexploited lands are waiting to be explored and the new regime would likely want to give facilities to Mauritians. There is also Mozambique where land is available. Fourth, Cote D’Ivoire, which is a booming economy. There is also Kenya where China has realised huge projects. The list goes on with Tanzania, Nigeria and Ghana.  

Which sectors do we need to exploit more?
We can tap into the vast potentials of Africa’s agriculture, which remains this far under-exploited. Our entrepreneurs should look for joint ventures, private equity and venture capital routes in areas of core competences. Agribusiness holds the key to meeting urban consumers’ demand for food, particularly processed food. Emerging countries will also increase demands for Africa’s farm commodities. There is vast potential for establishing production and trade links, as well as synergies between different actors along the entire agribusiness value chain (producers, processors and exporters), through the provision of incentives that bolster private sector investments and encourage the competitiveness necessary to meet consumer requirements for price, quality and standards. 

Growing opportunities from investment in infrastructure will help overcome the current challenges associated with poor access between farm-level production and downstream activities, such as processing and marketing. This opens the door to increasing the production of higher agricultural value-added products while continuing to produce popular commodities such as coffee, tea, cocoa, cotton, livestock products, fresh vegetables and fruits. While regional integration is expected to help countries reach economies of scale, it should also help minimise high transaction costs associated with fragmented markets and price controls. As long as governments implement regional free trade policies such as abandoning export and import bans and removing non-tariff barriers, production for domestic markets will become increasingly attractive. This, in turn, should counter the effects of those existing tariff regimes that favour raw over processed goods.

Rapidly changing demands and technologies mean that Africa can power its way through the technological revolution. For example, information and communication technology applications such as mobile banking solutions are playing an important role in connecting smallholder producers to buyers. This would make the continent’s agribusiness systems competitive.