Global Companies with a Foothold in Africa Have a New Opportunity Ahead

The Africa Finance Corporation, a private development company based in Nigeria, says it will invest up to $140 million in a public-private economic zone created in Gabon by the government in partnership with Olam International, an agricultural business. The investment will fund several major infrastructure projects that potentially will increase Gabon’s export production, including its crude oil shipments.

The investment is earmarked for development in the Gabon Special Economic Zone of a new mineral terminal, a new general logistics terminal, and other unspecified projects. The partnership behind the zone also operates two other economic zones in the country, both in early development.

Like many countries in Africa, infrastructure weakness has kept Gabon from optimizing its export potential. Andrew Alli, the AFC’s chief executive, said: “Gabon has the benefit of an abundance of land as well as enviable natural resources, with long-established oil, timber and mining industries, and some of the world’s largest deposits of manganese and iron ore. There is huge potential for sustainable growth if the adequate supporting infrastructure is in place.”

In 2013, Gabon exported $8.8 billion and imported $3.8 billion, producing a trade surplus of $5 billion, according to the Atlas project of MIT. It exports over $6 billion a year in crude petroleum; other major exports include manganese ore, shipping vessels, and timber products. Its major imports are specialty ships, excavation machinery, refined petroleum and automobiles.

Last year, Gabon became the tenth member of the AFC, a shareholder organization whose members bestow preferred creditor status to the company which AFC says makes investment more viable. To date, the AFC has invested $3.2 billion in projects located mostly in West Africa in such sectors as power, telecommunications, transport and logistics, natural resources and heavy industries. AFC shareholders include sovereign African governments, African banks, private equity funds and other corporate investors.

Warren Strugatch
Warren Strugatch is a writer, speaker and consultant based in Stony Brook, NY. He covers economic development, global business, management and marketing.

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