Does Africa really benefit from foreign investment?
Tuesday, September 11, 2012
According to Mthuli Ncube, chief economist of the African Development Bank (ADB), this is because Africa has weak manufacturing and agro-processing sectors.
He further maintains that at least 70% of growth over the past decade has been driven by natural resources.
“Exploiting natural resources is capital intensive and does not create many jobs directly,” he says.
He says that for more people to benefit and to create more jobs, there has to be value-added processing of those resources.
“But more importantly, the answer lies in creating what is known as sovereign wealth funds,” he says.
“These are resources that can be used for creating venture funds, to support new entrepreneurs, new business ideas, which could then create jobs,” he says.
He points to Botswana, which has done a good job in creating sovereign wealth funds out of its diamond revenues, as an ideal example of how such a concept can work.
Source: BBC (link opens in a new window)