Africa still important for Singapore investments despite political unrest in Burkina Faso

SINGAPORE — Singapore government continues to eye Africa as an attractive destination to grow overseas trade and investments, even as the recent political unrests in Burkina Faso are set to disrupt the Republic’s plans for the West African nation.

Massive civil protests since June in Burkina Faso over presidential term limit have led to the ouster of its president Mr Blaise Compaore last week. This came just half a year after his visit to Singapore to entice business investments into his country, and the signing of a bilateral investment treaty in August.

“The recently signed treaty between both countries has not come into force as it is pending ratification. In light of the recent developments in Burkina Faso, we expect a delay in the ratification process,” a spokesperson of the Ministry of Trade and Industry told TODAY.

But this latest setback will not shake the government’s optimism in Africa, the spokesperson added, stressing: “Most African countries have experienced high economic growth and improving political stability over the past decade.”

Chief operating officer of Singapore Business Federation (SBF) Mr Victor Tay agreed, saying: “Burkina Faso is just one of Africa’s 53 countries, and most of them remain politically stable. Over 10 of our members are currently operating in the country, and none of them have left.”

“Like investing in BRICs, the potential of Africa is a long term picture, and I don’t expect the recent incident to cast a looming shadow over that outlook,” he said.

Burkina Faso is one of the several countries in Africa that Singapore is eyeing as the next frontier for Singapore companies to expand in the region, which is seeing very rapid economic growth on the back of its huge population and rich natural resources. The International Monetary Fund has projected last month a 5.75 per cent GDP growth for sub-Saharan Africa next year despite the shocks of Ebola outbreak.

This will mean opportunities for Singapore companies to export expertise in areas such as logistics, urban solutions and human resources to the rapidly developing economies there, Deputy Prime Minister Mr Tharman Shanmugaratnam noted during the Africa Singapore Business Forum in August.

Speaking to TODAY, International Enterprise (IE) Singapore’s director for the Middle East and Africa Mr G. Jayakrishnan said: “The largest markets in West Africa including Nigeria, Ghana and Cote d’Ivoire continue to be stable… Singapore companies doing business there recognize the region’s long-term potential and positive fundamentals.”

Currently over 60 Singapore companies are present in Africa, with investments reaching about S$20 billion to date, IE Singapore’s data shows.

“While political economic and social stability prevails across most of the African continent, there may be occasional pockets of unrest,” Mr Jayakrishnan nonetheless cautioned. “Companies looking to venture into frontier markets should assess and factor these risks into their business plans.”