Indonesia pays more attention to Sub-Saharan Africa for Construction Services

Posted on : Saturday , 27th September 2014

Jakarta (ANTARA News) - Indonesia pays more and more attention to Sub-Saharan Africa as promising emerging markets in the next decades.

At a roundtable discussion on opportunities for investment and trade cooperation in construction services and products in Sub-Saharan Africa held recently by the Ministry of Foreign Affairs (MOFA), Nigeria, Mozambique and South Africa offered many opportunities to would-be investors as gateways to doing business in Africa.

Nigerian Ambassador to Indonesia Muhammad L. Sulaiman, Minister Counselor of the Embassy of the Republic of Mozambique Antonio Rodrigues Jose and Councellor of the Embassy of the Republic of South Africa Mr. Willem Geerlings were speakers at the discussion. Sub-Saharan Africa, geographically, is the area of the continent of Africa that lies south of the Sahara Desert. Politically, it consists of all African countries that are fully or partially located south of the Sahara.

The three countries are taken as examples on how they have developed. South Africa is one of the most sophisticated and promising emerging markets, offering a unique combination of highly developed first world economic infrastructure with a vibrant emerging market economy, Mozambique has competitive advantages such as its strategic location in southern region of Africa, sharing borders with countries like South Africa, Zimbabwe, Zambia, Malawi, Tanzania and Swaziland, and providing infrastructure that gives access to SADC countries (ports, pipeline and roads). In particular Nigeria, with a population of about 170 million, GDP of US$510 billion in 2013 and an average growth rate of 6.4 per cent between 2010 and 2013 is the most populated and largest economy in Africa. Ambassador Sulaiman has said that his country is the leading destination for investment in Africa. It was ranked nos.1 for 2 of the last three years and a top three destination last year in Africa in terms of quantum of foreign direct investments (FDI).

The construction industry contributes significantly in terms of scale and share in the development process for both developed and developing countries, Nigeria, Mozambique and South Africa inclusive. And the products provide the necessary public infrastructure and private physical structures for many productive activities such as services, commerce and utilities. The industry is not only important for its finished product, but also employs large number of people (directly and indirectly) and therefore has an effect on the economy of a country during the actual construction process. The types of public and private facilities produced range from residential and non-residential buildings to heavy construction, which play a critical and highly visible role in the process of development.

Nigerias construction industry, which is currently a multi-billion dollar business, started in the 1940s with few foreign companies participating. But its independence in 1960, bolstered by the "oil boom" of the 1970s, brought an upward trend in construction activities, which was then dominated by foreign companies with few indigenous firms. "Unfortunately, the period also exposed our indigenous companies, especially their lack of professionals required for planning, designing, constructing and maintaining the magnitude of projects conceived by government," Ambassador Sulaiman said.

The situation was, however, addressed with establishment of training institutions, engagement of expatriates and collaborations between indigenous and foreign entrepreneurs. The apparent resources gap needed for successful completion of complex projects between indigenous companies and their foreign counterparts is now closer, compared to the pre-independence era. Nigeria is restructuring its economy and diversifying the source of revenue. In a speech delivered recently, Nigerias Minister of Industry, Trade and Investment, Olusegun Aganga, CON, stated that the countrys reliance on the export of crude oil and raw materials is being reviewed under the Transformation Agenda of President Goodluck Ebele Jonathan.

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