Africa must drive its own economic growth because foreign investors are coming to Africa to make money not to solve the continent’s problems, Finance Minister Patrick Chinamasa said in Rwanda on Tuesday.
Chinamasa was part of a panel that was discussing new business models for private sector resource mobilisation at the African Development Bank’s annual meeting in Kigali Rwanda.
“The reality is that foreign investors come to Africa to make money and not to be part of the solution to Africa’s economic problems. It’s, therefore, upon African governments to innovate and come up with mechanisms that will drive the continent’s economic growth,” Chinamasa told the session, according to The New Times.
According to the African Development Bank Chinamasa also told the session that although governments were trying their best to create conducive policies to attract foreign investment and funding for the private sector, financial institutions were not following suit.
“Local banks and large financial institutions are not playing their proper roles to support the private sector. They must come up with instruments and models that support the informal sector, not only in financing, but also in skills building,” he said.
“It is paramount to know that before banks can dish out money to the private sector, local investors must first have the skills and knowledge of how to invest in their areas of choice. This way, they will make a serious contribution towards our economic development.”
Chinamasa’s remarks come at a time when there is confusion about Zimbabwe’s indigenisation policy with some reports saying the government is softening its stance while the Deputy Minister of Indigenisation Mathias Tongofa said yesterday that the law had not been changed.
A report by Global Financial Integrity released last week said that third world countries are losing US$542 billion a year through illicit financial outflows. Trade misinvoicing accounts for 80 percent of this amount, or US$424 billion.
The report, which looks at five African countries regarded as models for growing economies on the continent- Ghana, Kenya, Mozambique, Tanzania and Uganda, says the five lost US$60.8 billion in the 10 years from 2002-2011 through misinvoicing.
Tanzania lost the highest amount of US$18.73 billion, followed by Ghana with US$14.39 million and Kenya with US$13.58 billion. Uganda and Mozambique lost US$8.84 billion and US$5.27 billion, respectively.