Mr Lee Yi Shyan at the Inaugural Africa Singapore Business Forum 2010, 14 July 2010

Mr Lee Yi Shyan at the Inaugural Africa Singapore Business Forum 2010, Fullerton Hotel Excellencies,

Ministers,
Dr Mohammed Ibrahim, Founder of Celtel and the Mo Ibrahim Fund

Distinguished Speakers and Guests from Africa,

Members of the Singaporean business community,

Ladies and Gentlemen,

It is my great pleasure to address you this morning at the inaugural Africa Singapore Business Forum. I would like to welcome honorable Ministers from Angola, Cameroon, Republic of Congo, Gabon, Mauritius, Nigeria and Togo; as well as the economic delegations from Algeria, Egypt, Botswana, Ghana, Nigeria, Rwanda, South Africa, and Zambia.

May I also offer my congratulations to the six African teams for their great showing at the World Cup. I recall vividly South Africa’s opening goal and Ghana’s impressive performance in the run-up to the quarterfinals. The historic event has not shown the world what South Africa can do, but also brought the entire Africa to the center stage.

Africa is the reason why we are all here today. I recall the genesis of this forum. In October last year, I visited South Africa and Nigeria on a business mission organized by International Enterprise Singapore, the Singapore Business Federation and the Singapore Chinese Chambers of Commerce and Industry. I was struck by the great economic potentials of the two countries. Upon my return, I asked if our agencies could explore ways to enhance our collective understanding of the market and how we contribute to the development there. Hence we thought of gathering people who know about Africa to advise and guide us. IE Singapore and SBF had modest plan for this inaugural forum. But we are pleasantly surprised by the level of enthusiasm. We are pleased to have 8 ministers, about 150 African participants and 300 Singapore-based business leaders gathered in this room. To all you, my warmest welcome and appreciation.

(I)Collectively, Africa has emerged

Why Africa? Between 2000 and 2008, FDI into Africa more than doubled, amounting to almost US$ 88 billion. During the same period, African’s GDP averaged almost 6% a year. In the near term, the World Bank further estimates Africa to grow between 4.5% - 5.2%. This figure is comparable to other fast growing regions such as emerging Asia, and the Middle East. With GDP today at US$1.2 trillion[1], Africa’s economy is almost that of India’s and Russia’s, and further projected to expand to a US$2.6 trillion economy by 2020.[2]

With 52 cities of over 1 million people, Africa today is almost as urbanized as China. The continent’s rapid urbanization, supported by (i) abundant natural resources; (ii) improved political and macroeconomic conditions, and (iii) a market of close to 1 billion, signals promising long term growth prospects. These are important drivers that our businesses cannot ignore. Collectively, Africa has emerged.

(II) Africa and Singapore: New Partners in the Africa-Asia equation

What can we do together? Let me begin first by highlighting major trends between Asia and Africa. Firstly, rising trade. In the last two decades alone, Asia’s share of African trade has doubled, peaking at US$235 billion[3] in 2008, prior to the economic downturn. In the last 5 years, Singapore’s trade with Africa grew at a compounded annual growth rate of 8.4%, to reach S$8.4 billion.

Secondly, rising investments. Between 2000-2008, Asia’s accounted for over 15% of total global FDI into Africa. Asia’s FDI into Africa continues to rise, led by countries such as China, Hong Kong, India, Malaysia, and Singapore. Africa is renewing its economic links with Asia, just as it was linked to Asia by the ancient traders plying the maritime “silk routes”. Africa is looking east, and so is Asia looking west. In this new wave of exchanges, Singapore is well situated geographically and culturally to serve the renaissance between the two continents.

Thirdly, need for urbanization. As Africa develops its infrastructure, as it adds new public amenities, schools, institutions to boost its developmental capacity, it will be to Africa’s interests to acquire the lessons of other more advanced countries to shorten its learning curve. Towards this goal, Singapore’s experience may be of some relevance as a case study. Without natural resources, we progressed from third world to first world in less than four decades. Our public and private sector collectively accumulated experiences in many areas of potential mutual interests, such as urban planning, industry development, transport & logistics, public housing, environmental protection, water preservation and regeneration, healthcare and education, just to name some.

I am happy to note exchanges and mutual learning have already started for some time now. We have the pleasure of hosting many incoming delegations from countries such as Egypt, Botswana, Nigeria, Libya, Rwanda and Kenya. We are happy to strengthen our contacts and communications.

Africa is still a relatively new destination for many Singaporean firms. Even then, we don’t have to start from zero. In fact, our companies have established themselves in 23 of Africa’s 53 states, providing solutions in a wide range of industry sectors. Some of them have participated in the development of ports in Egypt, Gabon and Ghana; Others have provided advisory to Nigeria and Rwanda in airport management. One of our well known companies, Hyflux, is building the world’s largest water desalination plant in Algeria.

For African companies venturing out to Asia, Singapore’s strategic location makes us a natural gateway. As the world’s busiest trans-shipment port, the world’s best airport and the most competitive economy, Singapore is home to 7,000 multinational companies including some from Africa. If you don’t like sophisticated-sounding description, what about this label from an American friend: “Singapore is Asia 101”. Indeed, the World Bank ranks us as the “World’s easiest place to do business” for four years now.

Grinrod, a South-African firm, operates a regional trading company for the Southeast Asian market. Angliss Singapore, owned by the Bidvest Group of South Africa, supplies a full range of quality food products to over 3,000 customers in the Southeast Asia region. Lastly, Sonasia, a subsidiary of Sonangol, Angola’s National Oil Company, uses Singapore as a regional headquarters for marketing. There are about 80 African companies operating out of Singapore. We would like to see how to build on this base, to double or triple the number in the next 5 years.

(III) Opportunities for Collaboration: New Initiatives

Today, I am happy to announce 3 initiatives that will help encourage more business interaction between our local and African business community – firstly, the new partnership between African Development Bank & International Enterprise Singapore to explore cooperation in areas such as water & sanitation, urban development, airports & seaports, technical & vocational training, and e-government.

The African Development Bank funds a wide variety of projects in Africa as part of their mission to help reduce poverty, improve living conditions and mobilize resources for the continent’s economic and social development. I trust that this new partnership will pave the way for more Singapore companies to participate in such projects, and facilitate their project financing needs.

Secondly, I am happy to announce the signing of a MOU between the Singapore Cooperation Enterprise and the Togo government for the development of Togo’s industrial and education sectors.

Finally, I would like to announce the launch of the Africa Business Group by the Singapore Business Federation. The Africa Business Group will be a result-oriented, business-to-business platform meant to create business transactions and project deals between the business communities in Africa and Singapore. By working with their counter-parts in Africa, SBF’s Africa Business Group seeks to bring more Singapore investments in Africa. In the second half of this year, Singapore companies can look forward to more than 3 business missions to Africa, organized by SBF, IE Singapore in partnership with our various business chambers.

Conclusion

Africa may have been in the lime light for the wrong reasons in the past. But this is set to change, just as the successful 2010 World Cup has created a watershed for Africa. Macro-economic stability, implementation of regional cooperation and custom union, rising energy and commodity prices, improving infrastructure and a common desire to modernize have set many countries on sustained growth paths. Africa will require substantial investments in infrastructure development, urbanization and human resource development. Africans will export more and in turn consume more.

Singapore’s own entrepreneurial successes in Africa are growing. Surprisingly, the most inspiring story for me comes from a woman entrepreneur Mdm Loi Eng Koon.She started her consumer electronics trading business in Nigeria 20 years ago single-handedly. She has gone on to manufacture CDs and DVDs for the Nigeria’s growing film industry, “Nollywood”. Her latest venture is to help introduce solar-power street lights to parts of Nigeria. Twenty years of hard work and adventure only strengthened Mdm Loi’s faith in Africa. In my mind, she remains as one of the ardent proponents for Singapore businesses to seize the opportunities in Nigerian and Africa. Mdm Loi may be diminutive in size, her courage and business acumen are of no ordinary measure.

On this note, let me I wish you a rewarding conference.

Thank you.

[1] Source: CIA World Fact book 2010
[2] Source: Mckinsey Global Institute Jun 2010
[3] Source: WTO Jun 2010