ACBF HOSTS THE LAUNCHING OF UNCTAD’S WORLD INVESTMENT REPORT (WIR) 2007

Dr. Soumana Sako, ACBF Executive Secretary, delivering his opening speech at the WIR 2007 launching ceremony

On October 16, 2007, the African Capacity Building Foundation (ACBF) organized, jointly with the United Nations Information Center (UNIC) based in Zimbabwe, the launching of the United Nations Conference on Trade and Development (UNCTAD) World Investment Report (WIR) 2007 at its premises. The launching ceremony was attended by Mr. Richard Mbaiwa, representing the Zimbabwe Investment Authority, members of the diplomatic corps, the press, invited guests, and ACBF professional staff.

In his opening remarks, Dr. Soumana Sako, ACBF Executive Secretary, congratulated UNCTAD for the publication and launching of this year’s WIR on the theme “Transnational Corporations, Extractive Industries and Development”. He highlighted the importance of the report as an important tool for understanding trends of foreign direct investment (FDI) and activities of transnational corporations (TNCs) and their developmental impacts, issues which are of special interest to developing countries, and particularly Africa. He indicated that recent developments had shown an increase in FDI flows to Africa, attracting US$ 36 billion in 2006 mainly in extractive industries, as a result of improved macroeconomic management and investment climate in African countries. However, the declining global FDI flows to the continent, which dropped from 3.1% in 2005 to 2.7% in 2006 was reflective of Africa’s failure to secure a larger share of FDI. He provided pointers as to how to improve the continent’s share of global FDI by focusing on the upgrading and development of an enabling environment. He also stressed the need for ACBF and similar organizations to endeavour towards building the capacity of institutions and strengthening regulatory frameworks to ensure good governance, rule of law, and transparency, aspects that positively impact on the rate of FDI inflows to Africa.

Dr. Soumana Sako, ACBF Executive Secretary, delivering his opening speech at the WIR 2007 launching ceremony. Seated to his immediate right is Mr. Richard Mbaiwa, representing the Zimbabwe Investment Authority and at the extreme right is Ms. Tafadzwa Mumba, Officer-in-Charge of UNIC.

Mr. Richard Mbaiwa from the Zimbabwe Investment Authority, on his part, read out the official UNCTAD statement on the launch of WIR 2007.In his speech, he noted the steady growth of global FDI inflows over the last three consecutive years, reaching US$ 1.3 billion in 2006, the largest growth since 2000. The rise in global FDI flows reflected partly strong economic performance in many parts of the world. He added that while FDI inflows in developed countries rose by 45% to reach US$857 billion, flows to developing countries and the transition economies attained their highest levels ever at US$ 379 billion (a 21% increase from 2005). The largest inflows to developing countries were to China, Hong Kong (China) and Singapore, while Russian Federation ranked first in terms of inflows to transition economies. He indicated that Africa attracted US$ 36 billion, the highest record to-date. While cautious due to uncertainties related to financial instability and high oil prices, WIR projects higher figures for FDI flows in 2007. In defining the role of TNCs in extractive industries, Mr. Mbaiwa stated that, while developed-countries’ TNCs accounted for the bulk of global FDI, TNCs - state-owned and private companies - from developing and transition economies were expanding rapidly, providing development opportunities to their home economies. In recent years, from developing and transition economies have emerged some of the biggest gas and oil producers in the world. He further indicated that foreign affiliates in these companies were on the rise in developing countries, registering a growth rate of 57% for sub-Saharan Africa as against 3% in Asia. He noted that, while TNCs were important for the development of extractive industries in developing countries, TNCs involvement came at a price as they claimed a larger share of the revenues generated by the extractive industries. In order to foster sustainable development, home countries should keep in check TNCs’ behaviour through effective policies and strong governance to enable transparent management of the revenue derived from these industries. He concluded by indicating that the current price increase in commodities offered a window of opportunities that the developing world, particularly Africa, could make good use of in order to meet the Millennium Development Goals (MDGs).

Mr. Richard Mbaiwa, Zimbabwe Investment Authority, presenting the newly released WIR 2007.

In her closing remarks, Ms. Tafadzwa Mumba, Officer-in-Charge of UNIC, expressed her gratitude for ACBF’s support in organizing the launching of the Report and extended her thanks to the Zimbabwe Investment Authority as well as to all participants who took part in the ceremony. Thereafter, the floor was opened to questions from the media and invited guests. Among the issues discussed were Zimbabwe’s current state of FDI; the fact that TNCs were not the drivers of development; and the need to build institutions, systems and capacities to keep in check TNCs so as to ensure in the long run the management of resources by the developing countries themselves.

Members of the diplomatic corps, the media and other invited guests present at the launching ceremony.