Excellencies,
Honorable Participants,
Dear colleagues of the United Nations system,
Ladies and Gentlemen,

From the outset, I would like to extend my sincere thanks to the Government and the people of Uganda for hosting this important gathering and for all the hospitality extended to all participants.

The Africa-Asia Business Forum was established in 1999 as an innovative forum in support of the development of the private sector in Africa, in an effort to attract trade and investment in Africa by joining Asian partners in the spirit of South-South cooperation. Its salient feature was to provide opportunity for face-to-face negotiations between African and Asian companies aimed at reaching business agreements for concrete deliverables.

Since its inception in 1999, the Africa-Asia Business Forum has measured its success not only by the number of countries, companies and business people from the two regions participating in the forum, but more significantly by the number and values of memoranda of understanding (MOUs) concluded by the business representatives from the two regions.

The first forum was attended by 110 African and 120 Asian participants. The forum resulted in the conclusion of 27 memoranda of understanding totaling a US dollar value of 24.5 millions. The fourth forum held in 2007 in Dar es Salam, Tanzania, witnessed the participation of 168 African and 44 Asian SMEs. 118 memoranda of understanding totaling a US dollar value of 156.6 millions were concluded.

Excellencies,
Honorable Participants,
Ladies and Gentlemen,

As stated earlier, the need to promote trade and investment in Africa lies behind the creation of the Africa-Asia Business Forum. Trade and investment are engines of growth with the power to transform economies and reduce poverty as the example of the People’s Republic of China so clearly demonstrates. In this context, they should not only be promoted in the traditional way of North-South cooperation, but they should also be given new ways including looking East towards Asia.

According to the 2008 edition of UNCTAD’s annual report on Africa, the continent share of world exports was about 3 percent in 2007 compared to 6 percent in 1980. Though there has been a slight increase in exports as a result of trade liberalization, weak supply capacity was the main obstacle to improve export performance in Africa and explained the loss of its market share. Also, an analysis of Africa’s export composition has shown that most African countries have not diversified their export products.

To complete this picture of Africa’s export performance before the current financial crisis, the share of African exports to Asia increased from 6 percent in 1990 to over 14 percent in 2000. Africa’s share of Japanese exports was less than 2 percent and Japanese imports from Africa were slightly more than 1.5 percent, with South Africa, Nigeria and Kenya being Japan’s major trading partners. With respect to China-Africa trade, it grew to about $55.6 billion in 2006, an increase of 40 percent from 2005 and a surplus in favour of China.

The current financial and economic crisis which started towards the end of 2008 has had adverse effects on trade and international investment. As an example, FDI inflows which reached a historic record of $1.9 trillion in 2007 are estimated to have declined by 15 percent in 2008 with a further decrease expected in 2009. Although these adverse effects have been slow to materialize in Africa, they have included sweeping away firms, mines, jobs revenues and livelihoods, severely deteriorating economic growth outlook and worsening macro-economic balances including widening current account and budget deficits.

The financial crisis has reduced trade causing an expected shortfall in export revenues for the continent as a whole, with oil exporters suffering the largest losses. Capital inflows have also declined, including workers remittances and tourism receipts. The private sector has been affected by shortage of liquidity in international markets, with adverse impact on trade and investment. International banks have failed to issue lines of credit or to confirm pre-committed ones. Projects have been delayed and some have been cancelled.

Excellences,
Honorable Participants,
Ladies and gentlemen,

Besides public-private partnership, another key for promoting investment and ensuring development and dynamism of the economy in the continent is boosting domestic savings and or resource mobilization To invest more, countries must tap assets which are outside the banks. Regular banks in Africa cater only to a fifth of all Africans.

Africa is estimated to lose hundreds of billions of dollars in domestic revenues annually through capital flight, tax evasion, the repatriation of profits by transnational corporations and high debt repayments. At the same time, the continent’s large informal sector holds considerable financial resources that are not deposited in savings accounts or pass through other formal financial channels.

Sub-Saharan Africa has the lowest savings rate in the developing world. While figures vary from country to country, gross domestic savings in the region averaged about 18 percent of gross domestic product (GDP) in 2005, compared with 26 percent in South Asia and nearly 43 percent in East Asia and Pacific countries, according to the World Bank estimates. There are many reasons for the continent’s low savings rates, including inadequate financial services, physical distance from banking institutions and high minimum deposit and balance requirements. As a result, only 20 percent of African families have bank accounts.

Excellencies,
Honorable Participants,
Ladies and gentlemen,

Let me now turn on tourism development which is the focus of AABF V. The Annotated Agenda handed over to us provides for four plenary sessions on this topic, namely “Overview of the Tourism Industry in Africa: Challenges and Opportunities”; “Marketing and Product Development”; “Public-Private-Partnerships in Tourism”; and “Pro-Poor Sustainable Tourism development”. AABF V has enlisted a number of prominent professionals and experts in tourism development who will address these sub-topics and interact with us on their various aspects. It will suffice me to share with you a couple of ideas.

Apart from the large number of Western tourists to the developing countries, many Asian tourists from Japan and now China have become significant participants in global tourism. Unfortunately apart from Egypt, Morocco and Tunisia, Assistant tourists to Africa had been limited.

Africa on the whole accounts for less than 5 percent of world arrivals and much less of world receipts. The industry in the continent is concentrated in a handful of countries (South Africa, Egypt, Morocco, Tunisia, Kenya, Botswana, Namibia and Tanzania) while the majority of countries have a marginal tourism industry well below their potential. Obstacles to tourism development in Africa are well known especially the lack of adequate infrastructure. Everyone recognizes the vast potential of Africa to significantly increase and expand tourism.

Tourism benefits are usually felt at two levels: macro or national level, and micro or sub-national or local level. At the macro level, tourism is expected to foster economic growth through foreign exchange earnings and an increase in state revenue. At the micro level, tourism benefits translate in an improvement in the peoples’ well-being in the area of job creation, revenue/income distribution and balanced regional development.

Sound and sustainable tourism development in Africa calls for a number of basic measures to be taken: research, institution building, training, integration and tourism education. Research should focus on the economic impact of tourism on society, the scope and nature of demand for a genuine tourism product in the market place, indigenous components of product delivery in the areas of food products, culture, architecture and appropriate technology; the manpower needs of the tourism industry; and the social relationships between hosts and guests.

Institutional building implies the existence, at the regional and national levels, of structures capable of coping with tourism. Such structures encompass tourism ministries or departments and require expertise in marketing, economics, sociology, physical planning, cultural development and human resources.

As regards training, it should be based on the output of research into manpower needs and geared towards the production of indigenous personnel capable of operating at every level and in every aspect of the tourism activity. Africa could greatly benefit from the experiences of such Asian countries as Thailand, Indonesia and Malaysia in tourism development, through South-South Cooperation.

Excellencies,
Honorable Participants,
Ladies and Gentlemen,

To conclude let me stress that at this critical juncture of the ongoing economic slowdown, AABF V provides an important platform for African and Asian businessmen to address the challenges and opportunities of the tourism industry in Africa. We hope that this important forum will provide a springboard for government and business to come up with policy recommendations for the sustainable development and promotion of tourism in Africa. I wish every success to the fifth Africa-Asia Business Forum in its deliberations.

And thank you for your kind attention.