S’pore’s expertise can add to Africa’s growth: Tharman

SINGAPORE — Singapore’s expertise in areas such as logistics, urban solutions and human resources will play a key role in helping local firms contribute to the development of Africa’s systems and infrastructure, at a time when the continent is experiencing unprecedented economic growth, Deputy Prime Minister Tharman Shanmugaratnam said at the Africa Singapore Business Forum yesterday.

What Singapore companies can offer is not scale, but the ability to add value by bringing new solutions, he added.

“The role Singapore can play in Africa has less to do with scale but more to do with particular solutions and catalysing new approaches,” he said. “It’s how we can add value, what new skills, new ideas and new business models we can bring — and we have some strengths that can be exported.

“Logistics — everything to do with ports and airports; urban solutions, particularly water and waste treatment,” Mr Tharman noted. “We are also keen to bring people here to share our experience and study our institutions, in areas such as government, housing development and technical education.”

Mr Tharman’s comments come as Singapore continues to eye Africa as the next frontier for trade, amid rapid urbanisation and a growing middle class in the continent. With Africa’s growth boosted by rising investment in natural resources and infrastructure, and strong household spending, Standard Chartered is reaping the benefits.

“In the past five years, our top line and profits there have grown at low double-digit rates in Africa — our fastest growing market globally,” Mr V Shankar, the bank’s chief executive for Africa, Europe, Middle East and the Americas, told TODAY.

“Total consumer spending in Africa last year was in excess of US$1.2 trillion (S$1.5 trillion) … and the region now aims to spend an additional US$60 billion on infrastructure. The spending, the projects, the financing — all these are opportunities.”

More than 60 Singapore companies have a presence in Africa, with investments reaching about S$20 billion to date. Bilateral trade between the two regions has risen almost 12 per cent annually since 2009 to S$14.1 billion as of last year, data by the International Enterprise (IE) Singapore shows.

But opportunities in Africa are not without risks, said Second Minister for Trade and Industry S Iswaran, who presided over the signing of bilateral investment treaties between Singapore and Burkina Faso, and Ivory Coast at the forum yesterday.

Noting that Africa is geographically and culturally distant from Singapore, he said: “There needs to be a very clear message (from the countries) as to what their economic priorities are and what support and facilitation they can provide … The risks are best mitigated if you have a good partner who can help you navigate the government and economic systems.”

Mr Peter Matlare, chief executive of Tiger Brands, one of Africa’s biggest food companies, agreed that African countries need to improve governance to attract more investments, but he urged Singapore companies to look at Africa with a long-term view.

“The investments have to be relationship-based rather than merely transitional,” he said. “We are not looking for colonialists; we are looking for business partners that can grow with us as opposed to those who simply invest and extract.”