Business opportunities help Ireland redefine its relationship with Africa
OPINION:Irish people seeking a silver lining to the global economic slump could do worse than look at how the crisis is helping us redefine our relationship with Africa.
The nature of our long-standing association with the continent, primarily rooted in the work of Irish missionaries and development agencies there, has begun to be transformed in recent years. Poverty, unemployment, corruption and crime are still major issues undermining progress there but Africa is no longer seen in terms of the “dark continent” cliche.
This, combined with the economic turmoil that has weakened Ireland’s economy and those of its traditional western trading partners, has motivated Irish companies to look at African markets they may otherwise have ignored.
Enterprise Ireland (EI) has played an influential role in this evolution, and is a key participant in Ireland’s third trade mission in as many years to South Africa this week. The State agency, which opened a Johannesburg office last year, has 180 Irish companies on its books exploring African opportunities, an increase of 69 since 2006.
These companies are responsible for much of the expanding export trade between Ireland and South Africa, the continent’s biggest economy and a regional hub, which amounted to €944 million in 2011, an increase of 23 per cent on 2010.
Merchandise and services exports from Ireland to Nigeria, the next biggest African economy, were worth €357 million last year.
The good news for those with a foothold in sub-Saharan Africa is that the International Monetary Fund believes the region is poised to continue the high growth rates posted since the turn of the century.
The IMF has predicted Africa’s economy would grow an average of 5 per cent in 2012 and 5.7 per cent in 2013. Telecommunications, e-learning, the financial services and life sciences are areas in which EI believes huge opportunities exist in South Africa and further afield.
Last year’s EI trade mission to South Africa helped Irish companies secure €15 million worth of new business.
Businesses that benefited from that visit include Clarigen, the HR software company; Azotel, the Cork-based technology company; and TerminalFour, the Dublin-based web content management company.
Renewable-energy entrepreneur Eddie O’Connor is one of those tapping into Africa’s need for infrastructure. His Mainstream Renewable Power company is lining up a number of multimillion-euro renewable energy projects in South Africa. A report produced for business lobby group Ibec’s Irish Engineering Enterprises Federation and the Department of Foreign Affairs and Trade has urged Irish companies to tender for about 115 infrastructure projects in Africa worth up to €12 billion.
So for the first time our economic ties are poised to become a central plank in Ireland’s Africa strategy and rightly so – already the value of our exports to it is far greater than our aid commitments to it. The State’s overseas aid budget, the vast majority of which is spent in Africa, is €639 million – a little more than half the €1,246 million in trade it did with South Africa alone last year.
Rich tradition of aid
Nor should developing the Republic’s trade links with Africa be seen as a way to water down its rich tradition of helping African states develop. Indeed, the State should be strengthening its relationship with Africa in the form of aid- for-trade programmes, as that would be far more beneficial mutually than the current, one-sided donor-recipient approach.
Thankfully the Government has embraced this notion, last year unveiling a new Africa strategy: Ireland and Africa – Our Partnership with a Changing Continent. This will see Irish Aid “expand its role in co-operation with partner countries aimed at enhancing domestic resource mobilisation, and improved business environments, including private-sector development activities.”
Critics of Ireland’s overseas development programmes who believe its cash-strapped Government can no longer afford to fund work in Africa are short-sighted. The question is can it afford not to invest in the development of a continent desperate for infrastructure, that has a wealth of resources and is home to a billion consumers.
Bill Corcoran writes for The Irish Times from South Africa