Infrastructure Key To Africa Success - Sanusi

Well, growth rate at the moment is in excess of 6%, its average 7%. And the bulk of the growth is driven by agriculture, by wholesale trade, and by services. So GDP growth has not been driven by the oil sector. In fact in the last quarter, the oil sector declined. The greatest challenge for us is the rate at which we implement structural reforms. And that is where the difference will be between single-digit and double-digit growth. (QUESTION: I guess my question is more of this, is Africa developing or simply enjoying a prolonged boom in raw materials?) 

Well for most of Africa, if you look at the breakdown of GDP, you'd find that the growth has not been driven by commodities. It's been driven by good macroeconomic policies, by demographics, by agriculture. What we need to do is to develop agriculture beyond primary production, go into manufacturing and that is where development begins, where you need growth in order to have development. 

(QUESTION: Governor, I have noticed - this is Chrystia Freeland speaking, hi.)

 Hi. 

(QUESTION: I have noticed that Africa is becoming really trendy in the investing community. A lot of people are saying to me, the next big emerging market is going to be Africa. Some people say actually Africa has already emerged, it's just that the rest of the world didn't notice it because you have had this really sustained high level of economic growth now for several years. Are you seeing that expressed in terms of real foreign investment?) 

Yes, I am. Well certainly, if you look at Nigeria, we got 20% of all the FDI into Africa. The problem is that a lot of it is hopefully investment. We need to get real investment into the real sector. The second thing is,Africa is 53 different countries and many people get carried away by what happens in Nigeria or South Africa. But there are a number of very small countries that are doing extremely well. Ethiopia, for example, has done a lot in terms of its coffee and commodities exchange and leather. Tanzania is doing very well in terms of its Southern Agricultural Growth Corridor. You have Mozambique, you have Ghana with investments in oil and gas coming in, you have Angola with its petrochemicals industry. So there are a number of small economies other than Nigeria and South Africa and Algeria and Egyptand a lot is happening in those economies and that's where to look really. AndBotswana obviously has been a long story of good governance. Mauritius now has transformed itself from exporting sugar to exporting sugar cane and being a real export economy. It's small but it's fantastic. So these are pockets of good news, and getting more and more of them and that's what's important in Africa. 

(QUESTION: So your point about Africa being geographically a continent but politically in many countries is really important, to what extent do you think African countries are going to have to forge some sort of regional economic unit in order to really take advantage of the growth potential?)

 It's absolutely necessary. I mean if you look at African countries, what you'd find is that most of the goods consumed in Africa are produced outside of Africa, particularly in places like China. And a major problem is the lack of infrastructure and the bottlenecks on the way of movement of goods and services. So it's much cheaper to produce goods in Shanghai and ship to Lagos than to produce in Cape Town and basically sent toKigali. So we need to have unions and the South African community has made a lot of progress - the East African community is far ahead of all the other regional groups. InWest Africa, we're looking at our common external tariffs trying to look at the ECOWAS region. But the reality is Africa is one large market that can produce the goods that it consumes, largely those that are based on agriculture. And if we can move agriculture off the value chain and be able to transport goods across the continent and increase inter-African trade from 10% now to about 30%, 40%, 50% in the coming years, growth will be in double digits on the continent."