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Promising Prospects for Africa-Canada Trade

 
Remarks by Hon. David Kilgour, Secretary of State (Africa and Latin America),
MP Edmonton Southeast,
Africa Direct Reception, Sheraton Suites, Calgary
May 7, 2000

Excellencies, distinguished guests and friends:

It’s a great pleasure to welcome you visitors to what we residents of Edmonton refer to as the second city in the best province of Canada. Welcome too to the second phase of Africa Direct. Judging from the excellent participation/enthusiasm in the Ottawa part of your program. One has the sense that deal making has already begun. Canadians have the opportunity to learn more about the immense opportunities which exist in African markets. African delegates are exposed to the realities of the Canadian marketplace and are meeting potential partners for the future.

What we are seeing here tonight, and have witnessed this past week, is a very tangible demonstration of what the African Renaissance is all about. South Africa’s Minister of Foreign Affairs said recently in a speech to the South African parliament that economic diplomacy would be the engine which drives forward the African renaissance. Africa Direct is economic diplomacy at its best.

Africa is now recognized to be one of the last regions with high economic and social growth potential. Canadian companies with the foresight to recognize these opportunities and capitalize on them will gain a foothold in markets in countries which are on the road to prosperity. Canada can make a valuable contribution as a leading provider of information technology, manufactured goods, and know-how for resource extractors. Too few people realize that half of all mining exploration in Africa today is carried out by groups which include Canadian companies. Many of our mining companies have proved to be valuable joint venture partners; Canada is a country in which to raise money for mining projects.

Canadians are attracted to Africa as an export destination because of deregulation, privatization of state owned enterprises, emerging equity and capital markets, and progressive economic and political changes in many of 53 capitals.

En Afrique occidentale, Hydro-Québec International est le principal partenaire stratégique dans la privatisation de SENELEC - producteur d’énergie du Sénégal. Les sociétés d’ingénieurs-conseils et les sociétés de services canadiennes sont très présentes sur le continent. Plusieurs d’entre elles travaillent, par exemple, au Projet de pipeline entre le Tchad et le Cameroun, que finance la Banque mondiale. Le pétrole et le gaz, les télécommunications, la production et la transmission d’électricité, et le traitement du bois sont tous des secteurs auxquels participent les entreprises canadiennes. Les échanges bilatéraux du Canada avec la région africaine s’élèvent à 2 milliards $ par an, et nos exportations ont doublé entre 1993 et 1998.

Canadian exports to Sub-Saharan Africa are now greater than those to the Indian subcontinent or to Eastern Europe. Our exports to the Southern African Development Community are substantially greater than those to the newly independent states of the former USSR.

The trade commissioner service of Foreign Affairs and International Trade supports Canadian business efforts to expand and deepen market presence through investments in Sub-Saharan Africa. As part of Canada’s recently announced Africa Trade Strategy, Canada-based staff in Africa have been increased by three people this year, in addition to the commercial officer who has been hired in Lagos, Nigeria.

The Export Development Corporation has been very active in supporting Canadian exporters and investors. It is a leader in the structured finance field, with the ability to apply both project financing and political risk insurance of equity and loans. The EDC supported $509 million worth of transactions in 31 African markets in 1999 - up from $356 million in 1998.

Other organizations exist to develop long term business linkages between Canadian and African companies. The Canadian Alliance for Business in South Africa is one example; it identifies specific joint venture partnership opportunities in South Africa and then works to identify suitable Canadian partners. In sourcing annual imports of US$28 billion, South Africa continues to offer good opportunities for Canadian companies. Already more than 70 Canadian companies have investments, subsidiaries, joint ventures, or representation there.

While South Africa presents itself as the gateway to the continent, there are a number of emerging economic lions. Angola, Uganda and Botswana already stand among the ten fastest growing economies globally. Of great interest to Canadian companies is the formation of trading groupings which encourage economies of scale and competitive regional industries. Two important trade deals occurred in 1999 -- an important step forward for the African Renaissance.

A treaty signed by Kenya, Tanzania and Uganda (80 million people as a group) outlines the negotiating terms for a customs union to be established within four years. Eventually this union will lead to a common market and currency styled on the European Union. The second treaty, a union of eight members of the West African Economic Monetary Union, comprising 70 million people has the creation of a common market as its goal too.

Regional economic cooperation will not only draw trade and investment to Africa in the new century, but it will lead to more fulfilled lives. All of us here tonight would like to see trade with a human face, few can deny that human development and trade go hand in hand today. Let us build a new partnership between Africans and Canadians that will see globalization work to the benefit of all.

The articulation of the African Renaissance concept may be nothing more than the most recent expression of an idea that has been raised in many forms, by many African thinkers, over many decades. But, initiatives such as Africa Direct help to translate the idea into a practical program of action. Thank you all for coming, and helping to turn a dream into reality.

 
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