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There’s Work to do as Canada Rethinks Africa Strategy

Canada is rethinking its Africa strategy. That, in itself, is an acknowledgment that the current (and past) strategies aren’t working (didn’t work), and have created the need for a reassessment.

Part of that review process unfolded on July 5 in Toronto, at a seminar hosted by the law firm, Gowling WLG and Preponderant Advisory. Speakers included Arif Virani, MP and parliamentary secretary to the Minister for International Trade; Thandiwe Fadane, Republic of South Africa Consul General; Marsha John-Greenwood, vice president for people and culture at the Toronto International Film Festival (TIFF); and, Peter Leowen, Director at the Munk School of Global Affairs and Public Policy of the University of Toronto, 

What became obvious from the discussions is that there’s work for Canada to do over in Africa in face of rising competition, not just from Western rivals, but more importantly from China and Russia. Therefore, it’s imperative to reframe the strategy for economic cooperation between Canada and the continent of more than 1.2 billion people that has the world’s youngest population with an average age of 20.

The seminar became a platform to identify opportunities, challenges, and potential areas of collaboration in order to strengthen bilateral trade, investment and sustainable development.

Arif Virani

A key issue raised was the role policy could play, particularly that on immigration, in fostering improved business relations. One contributor from the audience, an investor with money in more than 30 African startups, noted the peculiar difficulties African businesses seeking Canada visas and capital faced, compared with the rest of the world.

The need for a more nimble immigration process had cropped up a week earlier at the Collision tech conference and exhibition in Toronto, where Immigration Minister Sean Fraser acknowledged that people seeking Canadian startup visas often got those of the U.K. and U.S. while still waiting for a Canadian decision. Quite a number of African exhibitors ended up with empty stands because they couldn’t get the visa on time to enter Canada.

Canadian investments in Africa have tended to concentrate on the mining sector, where the country boasts of companies with very high expertise. There’s been a certain reticence to go into other areas, with fund managers barely ever willing to take a look at African assets, for instance. Most of the time it’s because they lack information, unduly outsized risk profiling or are trapped in old descriptions of the continent that don’t live up to current realities.

Marsha John-Greenwood

The result is that Canadian companies have been slow in taking advantage of opportunities that emerged in Africa recently in areas such as telecommunications, digital technology and fintech, when compared with U.S. and Chinese counterparts. The seven tech unicorns that have emerged in Africa in recent years are dominated mainly by U.S. investors.

Chinese companies have also made significant forays. While initially focused on big infrastructure projects and mining, they have quickly diversified and adapted to other needs. 

One of their biggest successes in Africa is Opera, the web browser unit of Beijing Kunlun Tech, owned by billionaire businessman Zhou Yahui. The company was quick to develop a digital payments platform named OPay that is easily the most popular payment app in Nigeria. OPay has also set up in a number of other African countries.

Such is the competitive business environment now in Africa, where Canada is now kind of a laggard. That it will need vigorous, even radical, efforts to cover lost grounds, was the opinion of several participants at the seminar. 

A cross section of the audience.

What emerged in the end was a consensus on key steps that need to be taken as part of the process of reframing a Canada Africa strategy. They include:

● To analyze the current state of economic cooperation between Canada and Africa, and identify potential areas for collaboration and partnership.

● To develop a strategic framework for enhancing trade, investment, and sustainable development.

● To outline policy recommendations for both the government of Canada and its African counterparts.

● Participants highlighted the existing trade and investment flows between Canada and Africa, emphasizing the need to diversify and expand bilateral economic relations.

● Opportunities for collaboration were identified in various sectors, including agriculture, mining, energy, infrastructure development, education, technology and healthcare.

Challenges and constraints identified include:

● Over-exaggerated risk profiling of many African markets

● A paternalistic view of Africa only in terms of charity or aid

● Lack of awareness about business opportunities and potential partnerships hindered economic cooperation.

● Insufficient trade infrastructure and connectivity that pose challenges to trade facilitation.

● Regulatory barriers and trade restrictions that impede smooth trade flows.

Identified areas of cooperation include:

● Agricultural cooperation, involving knowledge sharing, technology transfer, and investment in agri-processing.

● Infrastructure development and connectivity, including transport and digital connectivity.

● Renewable energy and sustainable development emerged as potential areas for joint ventures and investment.

● Education and skills development were recognized as important for human capital development and knowledge exchange.

● Cultural exchanges and partnership with Africa’s creative industry

Strategic Framework:

● Participants proposed the development of a comprehensive strategy encompassing trade promotion, investment facilitation, and sustainable development goals.

● The strategy would focus on enhancing market access, improving trade facilitation mechanisms, and reducing non-tariff barriers.

● It would also include initiatives to promote investment, technology transfer, and capacity-building as well as sustainable development goals, such as poverty alleviation, gender equality, and environmental sustainability.

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