THE FOOT AND THE HORSES HEAD: REFLECTIONS ON THE

SOUTH AFRICA ITALY SUMMIT/INDABA HELD ON 23RD

OCTOBER 2018.
Jabulani Mzaliya
Doctor of Philosophy: University of Zululand
Certificate in Post-Privatisation: International Law Institute
Director: TRANSPOREG
Special Adviser: Ministry of Energy: Republic of South Africa
Advisory Board Member: Albert Luthuli Centre For Responsible Leadership. University of Pretoria.
__________________________________________________________________________________
At the 5th edition of the South Africa/Italy Summit/Indaba attended by Gauteng Premier David
Makhura, Johannesburg Mayor Herman Mashaba, Italian Ambassador to South Africa, Mr Pietro
Giovanni Donnici and South Africas Ambassador to Italy, Professor Shiristh Soni, Italian Business
and South African business, cooperation between the two countries businesses and economies was
discussed.
Even before I embark on the theme of the Conference and the questions underpinning it, the
Summit/Indaba itself was knowledge-sharing which assists the investment profile of the continent of
Africa. It brings about the best experiences of businesses from both countries to the fore, raising
challenges and opportunities that can be further explored for mutual benefit. Building on the theme of
mutual benefit, even the organization and preparation for the Summit/Indaba, should have been a joint
effort between South African and Italian events management companies.
A week after the Summit/Indaba, the African Development Bank (AfDB) held a three day African
Investment Forum. Discussed at this Forum were 61 deals estimated at $40-billion in Boardroom
Sessions, with another $28-billion to be showcased to the investors at a marketplace Gallery Walk.
There were going to be 230 projects worth over $208-billion spanning several sectors energy,
infrastructure, transport and utilities, industry, agriculture, ICT and Telecoms, water and sanitation
funds/financial services, health, education, hospitality and tourism, housing and aviation. (Investors
Bright Future In Africa. Africa Investment Forum. Business Day. 6 November 2018). Even serial
Conference delegates and attendees would find it so mouth-watering to have attended both, finding
synergies between the resolutions of the first (the South African Italy Summit/Indaba) and the vast
opportunities offered by the second (The Investment Forum).
Golfing enthusiasts in South Africa and the world have appropriated household golfing stars such as
Dylan Frittelli, Rory Sabbatini, Hugh Baiocchi without linking them to their Italian roots. Shoppers and
customers frequent Mr Price with little or no reference to its pioneer founder, Laurie Chiappini as a
South African of Italian origins. There are many others. To mind, I have Mike Lambetti of Imperial,
Gianni Ravazotte of Italtile, the late politician Mario Ambrosini, and the list is endless.
The Summit took place on the back of the storms that had battered and flooded six metro stations in
Rome two days earlier. South Africa and Italy have a long-established relationship and solidarity during
these trying unavoidable Acts of God strengthen these relationships. Sympathies during the Acts of God
are areas for further cooperation among states. As occurrences over which human agency cannot
prevail, States should begin to form partnerships against climate change calamities.
Climate change is no longer a government only concern. Climate mitigation strategies have also
become the business of business. In the same way that Corporate Social Investment (CSI) has found its
way into corporate governance and reporting, climate change mitigation s strategies by business are
looming and have started in the automobile industry.
Africa is populated by large sections of poor people who stand to lose more during calamities
wrought by climate change. Partnering African countries in climate mitigation efforts is both an act of
investment and human kindness. Take food shortage as a consequence of climate change and the
resultant world hunger as an example. World hunger is felt more by poor countries, most of which are
in Africa. The Food Agricultural Organizations (FAO) efforts to prepare and provide assistance to
African countries in famine can be better assisted by Italian companies where the FAO headquarters
are based.

1
 Speaking at the World Economic Forum (WEF), the United Nations Framework for Convention on
Climate Change (UNFCCC) Chief, Christiana Figueres said by showcasing private sector adaptation
success stories, we intend to help both communities and businesses become more climate-resilient and
to put the benefits and business sense of adaptation firmly on the agenda of the private sector. (Top
businesses reveal climate change strategies. Climate Home News. 27/01/2012).
Apart from the full Embassy in Rome, South Africa has a Consulate-General in Italy's commercial
capital, Milan. There are currently four Honorary Consuls in Florence, Bologna, Bari and Venice
respectively. Italy has an Embassy and two consulates in Johannesburg and Cape Town. I believe this
vast network of diplomatic links should be further leveraged for the encouragement of two-way and
mutually benefiting business relations.
The task of the Italian-South African Chamber of Industry, with its more than 250 members in
different categories, should continue to be at the forefront of growing these business relationships for
mutual benefit. 250 is a vast improvement from when the first Italians made an economic impact on
South Africa. While there might have been earlier exploration and voyages of discovery, (a phrase
much disputed) the history of Italian migration to South Africa began with the arrival of the
Piedmontese Valdesi Huguenots to the Cape from the Netherlands.
Like in many origins of diaspora, religion and religious persecution was the main reason. The Savoy
Monarchy in Piedmont was not amenable to free religious expression which in 1685 forced, the Valdesi
to flee from Italy first, to France and then to Holland. From Holland, these Valdesi settlers joined the
Dutch settlers who came to South Africa during the Dutch East India Company (DEIC) journeys. In
1688 and 1689, the first Piedmontese Valdesi arrived in the Cape together with other Dutch settlers.
(Milanese, A. Italians in South Africa: Challenges in the Representation of an Italian Identity. Faculty
of Humanities. University of Cape Town. 2002).
The two countries are strategically positioned. South Africa, because of its better facilities in terms
of banks and infrastructure for business than its African counterparts, is an entreport for companies into
the continent. Italy, being the closest European country to Africa, is the same gateway to the European
market. Although I speak about business, my take is that in the current global environment, the interests
of both State and industry are intertwined. Where I call for business to prevail upon the State to take
action, it is because they can and often do so, anyway. Where I mention a company specifically, I will
also be soliciting the State to lend its hand. The companies I will mention will not be excluding
companies in the same sector, but will only be indicative.
Italy is already a player in investing in the continent. The announcements of greenfield FDI projects
by European Union countries have almost doubled, increasing from the 11.9-billion made in 2016 to
more than 22.7-billion, with Italy passing from 4-billion USD last year to almost 10- billion. (Italy At
The Forefront of African Investment: Africa e Affari. 8 September 2018). Last year, $2.2-billion (R26.2-
bn) worth of goods were imported to South Africa, compared to $1.8-bn the previous year. South
African exports were valued at $-bn. The majority of Italian goods coming to South Africa are the
countrys world-renowned machinery, oil-related products, vehicles and pharmaceuticals. From South
Africa to Italy it is mostly raw materials and agriproducts such as wine, sunflower oil and sugar. Many
potential areas of synergy between Italy and South Africa are yet to be discovered. (Crouth, G.
Opportunity knocks for SAs Italian matchmaker. Business Report. 20 April 2018).
There is more space for Italian companies. I will cite a few examples. The African capitals (and the
countryside) are replete with old model and dilapidated FIAT 438 trucks. Not for their vintage or
classic value, but because the company has not bothered to refleet in Africa. Refleeting means the
introduction of the latest model truck, including after service care and making part available.
The Maseratis, the Porsches and the Lamborghinis are Italys best-designed vehicles. They are
world-class. But Africans who can afford them can also afford to order them or fetch them at source.
The Fiat trucks, the Argo Tractors and others, have to be delivered to the African countryside. But the
impact will be felt if truck and tractor manufacturing plants are located on the continent. The Italian
national carrier, Alitalia, does not seem to have the appetite for exploring the vast African airspace
through code-sharing partnerships. Although African contributed 15% of the global population, it has
less than 3% of the worlds aviation traffic. Parmalats penetration into the continent could unlock the
value of the vast cattle stock on the continent.
Even though I speak of a continent, the prevailing Euro-American myth that Africa is a country
should be dispelled. There are many Africas with different opportunities and challenges. Some parts of

2
Africa are as developed as those found anywhere else in the world, but there are those that are as
backward as to resemble prehistoric times. Both these divides require a carefully thought out business
strategy, not born out of the past notions of civilizing, or transporting foreign experiences, but
synthesizing local and foreign experience for each sector, project and region. The overriding
consideration should be that five of the ten fastest growing economies in the world today are in Africa.
(Investors Bright Future In Africa. Africa Investment Forum. Business Day. 6 November 2018).
The three questions I will respond to are: (1) What are the best practices to improve Africas
investibility? (2) What are the most suitable sectors to establish cooperation with private players? and
(3) What are the most effective financial instruments tailor-made for Africa. In the next few pages, I
will respond briefly to these questions.
To answer these questions, I need to have a few disclaimers and multiplier effects of the postulations
made in this paper.
First, the statements, governments and companies mentioned in the paper could be replaced by any
other company and government with similar challenges and opportunities under the same conditions.
The paper seeks to engender some measure of universality and to offer solutions that might be useful
for more than one investing environment. What will be good for Italian investing companies will also
be good for other countries investing companies. An African investment destination can be attractive
for more than one company.
Second, I do not believe in the benevolence of investors over and above their profit motives. When
I seek the redemptive investments from Italy as a former colonial master, I do not expect that Italian
companies would readily invest to absolve them from the sins of their fathers. They will be doing so
because it makes economic sense negotiating for them to do so.
Third, African countries are not neutral recipients of direct foreign investments with outstretched
hands as if they are looking for alms. The process of negotiating investment deals will be fraught with
hurdles to be overcome, and expectations to be fulfilled. Africans have become alive to their potential.
Fourth, the African continental leaders should be respected as leaders in their own right. They are
no longer innocent bystanders and recipients of badly structured and one-sided proposals. Their actions,
or lack thereof, can have a positive or negative effect on how investors make their decisions.
Lastly, investment decisions take long to make, and by the time that a decision is made, the
conditions that had existed when the investment was considered and the time that it is concluded may
have changed a lot. Conditions shall not remain conducive to investment for all times.
The questions cannot be responded to conclusively because of the dynamic environment in which
businesses operate. I do not pretend to have the Wisdom of Solomon to offer conclusive and fault-proof
solutions but to contribute to many ideas that emanated from the Summit/Indaba. My contribution will
be broader than the specific to Italian and South African business, although I admit that bilateral
relations are essential. It is because both countries belong to bigger markets than themselves, in the
European Community and the African Union respectively.
The article is premised on the lingering perception among many in Europe that Africa is a continent
in decline. In spite of some glowing headlines in prestigious magazines such as The Economists
African Rising as a self-riposte to its earlier iteration of Africa: The Dark Continent, there has been
little or no traction for foreign direct investments. New African trends and indicators should replace the
perception. The first trend is that by 2034, Africa is expected to have the worlds largest working-age
population (1.1 billion); secondly, growth is expected in household and business consumption, mainly
due to the urbanisation processes; and finally, African economies are well-positioned to benefit from
rapidly accelerating technological change. (Pilogallo, A. Is the Italy-Africa relationship taking off? How
We Made It In Africa. DHL. 29 September 2016).
African countries can offer only words of solidarity rather than technical assistance. Italy and
countries in her position can provide the technical assistance in the event of disasters in Africa. Italy
has started by offering the rescue missions for Africans who cross over to Europe from the launch pad
of Libya. She can build on the goodwill, although the tide of assisting boat migrants is turning against
liberal governments.
Many of the perceptions against investment into Africa are centred on race, an abomination which
is currently being nurtured by the growing anti-immigrant and anti-Black attitudes in many European
States. Many African countries are changing this perception, offering favourable terms to interested
investors. The despicable nature of racism in Europe is worrisome, but it will grow unabated when

3
countries such as Italy do not grow their economies through foreign investments in the very continent
where despised Blacks in Italy originate.
Investments in Africa will have a humanizing effect when Africans are seen as people Italians can
do business with. Inherited prejudices inform most of the racism not by understanding the investor-
catching Africa rising narrative. Italians should invest while at the same time addressing racism in their
own country. (Scego, I. Italy is my country but it must face its racist history. The Observer. 16
December 2018).
I include this sympathy and solidarity to highlight the gap in the economies of the two countries.
Africans have the power to issue condolences. Established and stronger economies can issue both
condolences and technical assistance were such a tragedy to occur in a developing country. The papers
major achievement would be when both countries and both continents, have the power to share both
condolences and technical support for each other during times of disasters.
Italy is conversant with external control in its economic affairs in the same manner that African
countries have been dictated to by the Brentonwoods institutions and Western donor agencies. Although
much of the financial woes centred on Greece, Italy, about the size of the United Kingdom economy,
was considered too big to fail.
The medicine dictated to it by Brussels, including the imposition of a technocrat, Mario Monti,
who had never been a politician, was because he prayed at the altar of Brussels fiscal philosophy did
not work. But was Monti good for Italians? I have recollections of a Mobutu Se Seko who was good
for Western interests but despised by the Congolese. Pu Yi was a Manchurian Japanese favourite son,
but he was a Chinese puppet serving Japanese interests in the pseudo-independent State of Manchuria.
The search for national prestige which drove Italys search for colonies was its relatively small size.
It might have been a strategic error because, in its pursuit, it involved itself in an exploitative pursuit in
line with her European mega colonizers. What should drive its investments objectives today is still its
small relative economic size compared to her European neighbours and the seismic catastrophes that
befall its economies.
In spite of the innovative maps by former First National bank(FNB) CEO and venture capitalist
Michael Jordaan about African swallowing China, Indian, United States and all of Europe in terms of
size. (South Africa is five times bigger than the UK. Business Inside SAA. November 6 2018). In this
century, geographical size does not matter. It is the value of investment and size of returns that matter.
There are, of course, internal dynamics, but most of Italys problems relate to her obligations to
Brussels. Reasserting the lira over the Euro will yield results is neither here nor there. Italy is caught up
in the obligations to her continent. Her economy is predicated on the moods and swings of her European
counterparts. Italys internal contradictions of unstable governments resemble the same afflictions of
many African states.
The comparisons stop there because much as there are similarities, Italys challenges are less than
those of African States. She is the Eurozone third-largest economy. When its lira sneezes, neighbours
such as Turkey catch a cold. The contagion then spreads across all middle-income countries such as
South Africa. Africa has the perfect understanding of the power of the dollar, but the dollar has been so
prevalent in their economic lives that she has become immune to its size and influence, much of which
is enforced. A basket of currencies, including the lira, can make a huge difference to how African trades
and how investments are made in lira terms.
Italys economic woes result mostly from the management of public finances. Its private sector,
particularly in the North of Italy is solid, comparing, or even better than some of its European
counterparts. Small industries dominate. Italians are known as savers. Private debt is low. Italians can
work closely with the Department of Small Businesses because there is evidence that this is where
South Africas economy can grow. At the end of 2010, financial debt of households and non-
financial firms amounted to 126% of GDP, compared with 168% in the euro area, 166% in the
United States and more than 200% in the United Kingdom. (Tseng, N. Italys Hidden economic
Strength. Fortune. November 14 2011).
Like Africa, Italy cannot draw investors because they fear that Italy will default on her payments. In
the common understanding of external pressures in their internal affairs, Italy and African can better
understand each others challenges. Like in Africa, where economies cannot survive without massive
foreign injections, if the European banks and lenders do not assist Italy, the damage to the countrys
finances is incalculable.

4
 According to United Nations Commission For Trade and Developments (UNCTAD) World
Investment Report 2018, foreign direct investment (FDI) flows to Africa slumped to $42 billion in 2017,
a 21% decline from 2016, foreign direct investment to Africa fell by 21% in 2017. (Tralac. 07 June
2018). Italys Foreign Direct Investment (FDI) increased by 2.5 US-D-billion in May 2018, compared
with an increase of 2.6 USD in the previous month. The data reached an all-time high of 18.8 USD-
billion in January 2009 and a record of -14,7bn in May 2009.
(https://www.ceicdata.com/en/indicator/italy/foreign -direct-investment).
Italy can exploit the gaps that are left by bigger investor countries. Between 2014 and 2016, U.S.
exports to Africa fell by almost half, from $38-billion to $22-billion. And while the United Kingdoms
investments on the continent more than doubled between 2005 and 2014, reaching 42.5-billion ($57.6-
billion), only 2.5 per cent of its total exports are to Africa. Western countries are quickly losing ground
to China, which increased its exports to Africa more than sevenfold - to $103-billion - from 2005 to
2015. If Western businesses hope to keep up, they will need to tap into African countries and sectors
with the highest potential for growth. Italian companies should not be left behind.
Consumption growth in Africa should be the most significant consideration for Italian investors. By
2030, more than half of Africas population will reside in seven countries: Nigeria, Ethiopia, the
Democratic Republic of Congo, Egypt, Tanzania, Kenya and South Africa. But, more important, 43 per
cent of Africans will belong to the middle or upper classes, up from 39.6 per cent in 2013, implying
considerably higher demand for goods and services. By 2030, household consumption is expected to
reach $2.5-trillion, up from $1.1-trillion in 2015. (https://www.brookings.edu/opinions/capturing-
africas-high-returns).
African governments should initiate policies for investments in infrastructure to reverse colonial
logistics legacies. Infrastructure in its totality will refer to a range of things such as
water supply, sewage plants, housing, roads, cable networks, shopping centres, crches, food supply
facilities, schools, hospitals, airports, power grids, communication towers, community meeting places,
churches business and government buildings, bridges, railways. It is everything that modern life needs
in the way of built facilities often referred to as critical infrastructure. All these are necessary for the
socio-economic achievement of all countries. Scribante, Steffanutti Stocks and others can play a big
role in the continent.
States are expected to provide these services. Citizens and companies pay rates for services provided.
The level of rent or payment differs from country to country. Some countries may charge nominal rates
for their maintenance, but heavy investments can assist all of them. Charging and revenue collection
for user pays type of infrastructure may evolve new businesses and investments on their own, where
newer technologies may be deployed. Emphasis should be on new technologies because as these are
deployed, old and obsolete physical structures can be recycled. For example, CCTV cameras can be
mounted on old water towers to monitor traffic and crime in cities.
A missed opportunity is obvious in the South African road network. When the Gauteng Freeway
Improvement Project (the e-toll roads) were introduced, there was no need for the erection of gantries
because they are used only for the mounting of cameras which could have been mounted on already
existing bridges. On the part of the network on the N1, the gantries Kingfisher and Owl are about 200-
kilometres from bridges. All cameras could have been mounted on the many existing bridges. The
gantries could have been avoided. The charges could have been calculated to the bridges distances
between one another. The shape of the Kingfisher is the same architecture as the bridge near it, a clear
case of plagiarism which can be discussed in another iteration.
Italy is better placed to play a key role in infrastructure provision. Between 62% and 67% of Italian
exports to African countries can be attributed to six product categories, as shown in the table below.
Some of the products included in the categories are as follows: (1). Machinery and mechanical
appliances: dish-washing machines; machinery for cleaning or drying bottles or other containers;
turbojets, turbo-propellers and other gas turbines; taps, cocks, valves and similar appliances for pipes;
boiler shells; and tanks; (2) Mineral fuels, mineral oils and products: petroleum oils and oils obtained
from bituminous minerals (excluding crude); (3) Electrical machinery and equipment: electrical
apparatus for switching or protecting electrical circuits; transformers; converters; wires; and cables; (4)
Iron and steel: bars and rods; (5). Vehicles and parts: tractors; motor vehicles for the transport of 10 or
more people; cars; and vehicles for the transport of goods; 6. Articles of iron and steel: structures and

5
parts of structures; and tubes and pipes. (Pilogallo, A. Is the Italy-Africa relationship taking off? How
We Made It In Africa. DHL. 29 September 2016).
For this article, I will isolate road and transport infrastructure. The enhancement of transport
infrastructure will help to bring products closer to markets, both local and foreign. Investors are likely
to invest when they are assured that their products will reach local and global markets. But the transport
infrastructure should consider the distances between the areas of production in rural areas to the national
network to assist small-scale farmers.
Even for coastal countries distances of areas of production to ports are a challenge. In what Dumisani
Ntuli of the Department of Transport (DOT) referred to as maritime poor countries, distances from
ports affect the economic status of a country, much more so in Africa. Some major African inland cities
are between 1000 and 1500-kilometres away from the nearest port. Zambia, Rwanda and the Central
African Republic (CAR) are between 1500-kilometres and 2000- kilometres away from the nearest port.
Sixteen of the worlds landlocked countries are amongst the poorest countries. (The World Bank:
Landlocked Countries: Higher Transport Costs, Delays, Less Trade. June 16, 2008).
While landlocked countries are naturally disadvantaged, part solutions can be found elsewhere, such
as in the improvement of ports efficiencies in of coastal countries and the improvement of logistics
between these ports and landlocked countries. The movement of goods and people can be enhanced by
the absence of conflict as the delays and border closures may be used as a proxy. Land-locked states
have no absolute right of access to and from the seas and freedom of transit. (Bayeh, E. The Rights of
Land-Locked States in the International Law: The Role of Bilateral/Multilateral Agreements. Social
Sciences: 2015; 4(2): 27-30). Access is a function of cordial relations between maritime rich (coastal
and transit states) and maritime poor countries, to borrow Ntulis apt typology.
Out of Africas 55 countries, 16 of them are landlocked: Botswana, Burkina Faso, Burundi, Central
African Republic, Chad, Ethiopia, Lesotho, Malawi, Mali, Niger, Rwanda, South Sudan, Swaziland,
Uganda, Zambia and Zimbabwe. About a third of the continent is made up of countries that have no
access to the ocean or sea. Of Africas landlocked countries, 14 of them are ranked low on the Human
Development Index (HDI), a statistic that takes into account factors such as life expectancy, education
and income per capita. (Rosenberg, M. Landlocked: Why Does It Matter? Thought Co. 28 August 2018).
Such was the case between Apartheid South Africa and Lesotho, where the latter country was forced
through the closure of borders and go slows to support the formers efforts to remove liberation
movements from Frontline States (FLS). The ouster of Jonathan Leabua as Prime Minister of Lesotho
was an example of this. The relationship between Jonathan and South Africa after Jonathan offered
refuge to the African National Congress (ANC) for guerrilla attacks against the white minority
government in Pretoria was the trigger. He also adopted a Look East approach forging links
with the Soviet Union, North Korea and Cuba, much to the ire of then Apartheid South Africa that
had an avowed anti-Communist stance.
South Africa responded with an unacknowledged border blockade that left the country without
gasoline and short of food and medicine, stirring internal opposition to Jonathan's rule. Jonathan accused
Pretoria of destabilizing his government and threatened to approach East-bloc nations for military and
food aid. When Leabua was ousted, General Justin Lekhanyana, user-friendly to the South African
Apartheid Government, took over. (Boyle, B. Personality Spotlight. NEWLIN: Chief Leabua
Jonathan: Deposed Prime Minister of Lesotho. United Press International. January 20, 1986). The
expulsion of liberation movements from Lesotho swiftly followed.
Italian companies operating in landlocked countries can impress upon their partners to implement
the global agreements to (1) make transit and border regulations more transparent, (2) streamline
administrative procedures and (3) further simplify border control and procedures. These regulations
also underscore the importance of regional and sub-regional collaborative efforts in developing efficient
transit transport systems. (The World Bank: Landlocked Countries: Higher Transport Costs, Delays,
Less Trade. June 16, 2008). With a 7.600 km coastline bordered by the Adriatic, the Ioanian, the
Tyrrenanean, the Ligurian and the Sardinian Seas including the Strait of Sicily, Italian companies can
share experiences in this regard.
As a maritime nation, Italian companies stand to benefit through the provision of amphibious
vehicles and ships. There are many tragic incidents in African bodies of water. Some lakes are as huge
as oceans, with the oval-shaped Lake Victoria having a surface area of 70,000 square kilometres (27,000
square miles) which is roughly the size of Ireland. Lakes are forming borders and presenting transport

6
challenges of territorial disputes, but they can unlock a multi-country investment in the provision of
reliable marine transport.
Boats and similar vessels trading and ferrying passengers on these lakes are old and dilapidated.
They are coffins floating on water. In September, 40 people died when a ferry sank on Lake Victoria, a
tragedy which was suspected to be due to overloading of both cargo and passengers. AP Yachts, Alpa
Canteri or any of the 51 Italian Shipyards should consider the opportunity of providing vessels for
different categories of passengers and cargo.
Cargo only shipments can assist in relieving the transportation infrastructure challenges I have
referred to in this paper. Bioko Island of Equatorial Guinea hosts an international airport. To get to the
capital, Malabo, you need boat services and its related infrastructure. Sea and lake ready vessels can
also assist tourism. Not many African countries specifically target Italian tourists as they try to attract
Chinese or Americans. Such tours will change the mindset, and introduce Italians to the many wonders
of Africa.
All African States can be assisted in improving their targeted interventions determined by their
location. island States should be developed along the blue economy. Landlocked States should improve
their port to capital railway connectivity. Mono-natural resource base States should be improved
through diversification. All these economies should be explored and synergized to their fullest, such
that they do not replicate the mono-sector which I strongly advise against in the other paragraphs of this
paper. Italys economy is diversified. Its strategy in Africa should be informed by the need to be true
global players.
Providing African energy should be sine qua non for development. All the areas of investment in
this article cannot succeed if energy is in short supply. Energy will prevent the 56 days shutdowns due
to power outages in the continent. The Sunday Independent cited the International Energy Agency
(IEA) which has estimated that to achieve universal energy access in Africa, an investment of more
than $1.5-trillion will be needed between 2018 and 2050. If this investment is not raised, Sub-Saharan
Africa will be home to 89 per cent of the worlds energy poor by 2030. (Mourdoukoutas, E. Africas
Long Road To Renewable Energy. The Sunday Independent. November 11 2018). The top leadership of
the ENI, an Italian energy giant, was present at the Summit/Indaba and they might have been appraised
of the vast opportunities African presents to their sector.
Africa is dripping with oil crude oil. Hardly a year passes before another African country
announces new finds. Oil blocs remain undrilled. Africa has 126.5 billion barrels of unproven reserves.
She currently produces 8.1-million barrels a day which is 8.7% of the global production. She exports
6.8-million barrels a day while consuming about 5-million barrels a day and still requires 2.7-million
barrels a day. All Africa needs are upstream oil businesses, both drilling and oil refinery capacity.
(Learning To Leapfrog. Africa Oil and Gas Review. PwC).
Investors should be acknowledged as interested in profits. Their profits or margins, or portions
thereof, should be guaranteed repatriation certainty. The repatriation should be balanced against the
need to stem illicit capital outflows. Between $1.2-trillion and $1.4-trillion has left Africa in illicit
financial flows between 1980 and 2009 - roughly equal to Africas current gross domestic product,
surpassing by far the money it received from outside over the same period. (Tafinyerika, M. Illicit
Financial Flows from Africa: track it, stop it, get it. AfricaRenewal. December 2013). Illicit financial
flows exceed public development aid, which amounted to $41 billion in 2016, Illicit profits could be
used to influence political processes, allowing actors linked to criminal organisations to stay in power
and profit from their criminal activity. (Guyot, C. Illicit financial flows cost Africa $50-billion a year,
states new report. EURACTIV.fr).
Jones of The Guardian warns: Tax abuse by multinational corporations increases the tax burden on
other taxpayers, violates the corporations civic obligations, robs developed and developing countries
of critical resources to fight poverty and fund public services, exacerbates income inequality and
increases developing country reliance on foreign assistance. (Jones, S. Tax dodging by big firms robs
poor countries of billions of dollars a year. The Guardian.2 June 2015).
According to estimates by Global Financial Integrity, corrupt activities such as bribery and
embezzlement constitute only about 3% of illicit outflows criminal activities such as drug trafficking
and smuggling make up 30% to 35% and commercial transactions by multinational companies make
up a whopping 60% to 65%. Contrary to popular belief, argues Professor Baker, money stolen by
corrupt governments is insignificant compared to the other forms of illicit outflow. The most common

7
way illicit money is moved across borders is through international trade. (Tafinyerika, M. Illicit
Financial Flows from Africa: track it, stop it, get it. AfricaRenewal. December 2013).
Italian companies involved in these illicit outflows should be at the forefront of assist repatriation
effort to African countries so that they can have the financial wherewithal to reinvest them in business
that can benefit Italian companies. It may be self-interest, but I do not think that African political
leadership would be averse to a conditionality that European countries that identify and repatriate these
illicit funds should be favourably considered as investment partners. Italian companies are au fait with
reporting mechanisms such those reporting requirements under Legislative Decree (Decreto legislativo)
No. 231/2007.
There is a parallel process of keeping companies in check if they transgress corporate and company
laws. Stock exchanges are a layer that needs to be kept up to speed about company activities. However,
this pertains to companies that are listed. The weakness in Africa is that Stock Exchanges are themselves
non-existent or where they do exist they are weak. Stock Exchanges are themselves a fertile terrain for
investment and direct foreign investment is not excluded. Is Borsa Italiana listening?
African States should evolve a stable and reliable tax collection regime. Such a tax regime will
endow African states with their own revenues so that they do not covet the profits that are made by
investors. In some States, there is a temptation to overcharge or punish foreign companies even for
minor regulatory transgression as a revenue collection measure. The naming and shaming of non-
compliant companies carry reputational damage for future businesses. Companies sins, genuine or
not, follow them to their next intended investment destinations.
The processes of correcting these punishments have extra negative effects of harming third parties
such as customers and consumers. This type of investor recipient country and its relations with the
investors has been displayed in the fines the Nigerian regulatory authorities have imposed on the South
African cellular network company, MTN. Nigeria laid new claims of $8.1 of illegally repatriated
dividends, while the Attorney-general says the company owes about $2b in tax.
By their admission, officials in the West African country have already admitted that the MTN saga
has weighed on sentiment (of not helping the country as an attractive investment destination). (Hedley,
N. MTN to pursue listing in spite of Nigerian disputes. Business Day. 30 October 2018). According to
the South African Reserve Bank (SARB), the claims amount to all if MTNs market value of about $12-
billion. That could lead to a worst case scenario of MTN pulling out of Nigeria, which would increase
its exposure level that could increase systematic risk. (Naidoo, P and Henderson, R. MTN saga could
pose risk to SA, Bank says. Business Day. 9 November 2018).
Although investing companies should comply with regulations, three questions are crucial when
African countries issue regulatory fines: Do regulatory fines have an impact on shareholder returns? Do
companies in different industries react differently to the announcement of regulatory fines? Is the
quantum of the imposed fine sufficiently large to deter companies of repeat transgression, or do
shareholders ultimately benefit from collusion? (J. Strydom, M. Ward and C. Muller. The impact of
regulatory fines on shareholder returns S.Afr.J. Bus.Manage. 2015; 46 (4).
Debates on nationalization should be treated with caution as they have the potential to scare away
investors. Investors may understand the need for nationalization. They may be coming from
nationalized environments themselves. When it comes to investing in Africa, they cite and mostly
pretend that nationalization is an impediment. To use their parlance phrase, the political noise of
nationalization creates policy uncertainty. As the Chinese example shows, some negative attitudes
around nationalization and state involvement in the economy should be adulterated, and an admission
be made that much that drives the negativity against nationalization is ideological than an objective
analysis.
Many national states have adopted a mixed economy approach. Investors are not hostile to the idea
of mixed economies as long as there can be space created for public-private partnerships a growing
trend in the provision of basic services as the state capacities to provide these shrink. The system has
no principle to limit the power of government. It is a mixture of freedom and control. Both the private
and public sector are accommodated as partners in improving the economy.
(https://www.academia.edu/28125035/The_mixed_economic_system_in_modern_Africa).
The State becomes a willing provider of infrastructure, and the private sector pays willingly for the
infrastructure they need for their businesses to survive. It is a win-win. But the State can also identify
an asset that would unlock other developments. This explained the sudden nationalization decision of

8
Egyptian President Abdul Nasser to take over the Suez Canal in July 1956 even though France and
England had the largest share of the company. The British and French who had controlled the Canal
since 1869 were fully compensated, although the two countries were peeved at how they were excluded
from their control of the strategic sea route. (https://www.history.com/this-day-in-history/egypt-
nationalizes-the-suez-canal).
African countries should present themselves and be seen by investors as regional blocs in which
80% of African trade happens rather than single entities. The AfDB also focused attention on regional
infrastructure projects in recent years (from 2009 to 2013 it financed more than 70-cross-border
infrastructure operations amounting to $3,8-billion) since it considers regional transport and
telecommunications networks as necessary conditions for regional integration and enhanced
competitiveness. (Sy, A. Discussing Africas Development Priorities and Challenges With African
Development Banks President Donald Karebuka. Africa in Focus. Brookings. April 14 2015).
With softer borders and the prospects for free flows of goods and services across the continent, the
continent should leverage its market size of a billion plus people market. The population in Africa was
1.25-billion people in 1917. Africas GDP was 3.52- trillion dollars and the Public-Private Partnerships
at 6.3-trillion dollars. PPPs in Sub-Saharan Africa remain a very small market, with projects
concentrated in only a few countries, namely, South Africa, Nigeria, Kenya and Uganda. Together these
account for 48% of the 335 total PPP infrastructure projects in the region in the past 25 years.
In the past five years, PPP infrastructure projects in the region have mainly been concentrated in the
energy sector (78%) - mostly renewables - followed by transport (22%) and water and sanitation (0.5%).
(Rana, F. and Izuwa, C. Infrastructure and Africa Development- the PPP Imperative. World Bank. 23
January 2018). Public-Private Partnerships, or (PPPs), provide an opportunity to monitor this balance
between the public and private sectors and to form constructive relationships based on each party
accepting its relevant share of risk. (Michael, K. 1999. PPPs In Road Infrastructure in Australia,
Australian Academies of Technological Sciences and Engineering). Italian companies should fully
explore the avenues opened by the PPP approaches.
About 163 000 millionaires, a bulk of whom are based in South Africa, are living in Africa as of
June 2015, with combined wealth holdings of $670bn. Cairo in Egypt had the second most millionaires
(10 200), while Lagos, Nigeria had the third most (9 100). (le Courdeur, M. Over 40% of Africas
millionaires live in South Africa. Fin 24. September 2 2015). These, however, are not enough to trickle
down the economy to the large sections of the populations in the continent.
The fact that there are many thousand millionaires in the poorest countries of the world is a signal
that investors should adjust their image of Africa and other developing countries. They should no longer
think of African States as being ruled by a rich family (and often corrupt) or an influential clique while
the rest of the population is hopelessly poor. The new kind of millionaires emerges from their industry
and dedication to their business acumen. (Sartorius, N. How Many Millionaires in Africa? Croatian
Medical Journal. 2006 Dec; 47(6): 888890).
Many expatriate schools are taught in the medium of language. Consideration of other languages or
the creation of space of for expatriate to establish their schools should be the sine qua non for investment
incentives. But there should be a proviso. Expatriate schools should also accommodate local children
for their sustainability and the globalization of the locals in terms of language. The Italian language,
deliberately resisted by the colonized African generations, deserves its place in the linguistic sun not so
much as a tool of oppression, but for easier business communication.
Countries that seek to be attractive investments destinations should provide adequate social and
educational facilities for expatriates. However, they should not create enclaves for the exclusive use of
expatriates as this may invite the ire of local nationals. Only one African country was in the Top Ten of
Best Expat education, South Africa. On the examination of children as more outgoing, she scored 2 nd.
On the health and wellbeing of your children, she was 3rd. On children having a wider circle/diversity
of friends, she was 4th, and on the quality of childcare available for children, she was 5th.
(www.expatcapetown.com/education-in-south-africa.htm).
Investing companies should comply with the protocols of corporate social responsibilities that are
practised in their countries of origin. They should align their practices with local labour legislation and
conditions. Investing companies and entities should not assume that they can duplicate their Corporate
Social Investment (CSI) programmes across the continent. This does not always work.

9
 Although their strategies could be the same, they should consider that CSI should be implemented
according to the peculiarity of the individual environment. They should not assume that they can
duplicate their CSI programmes across the continent This does not work. You can have the same
strategy, but how it is delivered on the ground will be different. (Breitenbach, D. CSI in Africa:
Challenges and Learnings.10 Jun 2014).
Each MNC should identify the CSI sector where it will make maximum impact amongst, education,
health, environment, art & culture, community welfare, housing, infrastructure & energy, sports &
recreation, science & innovation, poverty alleviation, food & agriculture, enterprise development,
disaster relief and safety. It is advisable that for maximum impact and exposure, companies do not
invest in sectors where they operate, as this may appear to be getting rid of its surplus products. For
example, in South Africa, vehicle manufacturer, Mercedes Benz has an annual sponsorship of fashion.
Standard Bank has an annual sponsorship of jazz concerts and has an arts centre in Johannesburg. Many
other companies have unlocked social capital.
Serious investors look at long-term investment windows. Governments must have long-term policies
and multi-year projects so that investors may realize their return on investments. Long-term investments
are in sync with the long-term planning that is the lifeblood of investors. The desire for quick returns
invites a host of shortcuts which undermine the very investments made. African countries should be
wary of investors who promise quick returns because in most cases, these avoid accountability and are
characterized by shortcuts. Italian companies also require long-term plans with adequate assurances of
Return on Investment (ROI).
African states should accept foreign expertise if local expertise does not exist. Global investors want
assurance that local staff employed will be equal to the task at hand. Local labour supply should be
commensurate with the requirements of business. Skills development is key to attracting foreign
investment. The availability of skills in the continent will reverse the trend of investors importing their
workforce to the continent, thereby making their investment an employment creation for themselves
rather than the countries in which they invest.
Any investor will negotiate an investment deal that will be less costly. In identifying the cost drivers,
most international investors cite local content, naturalization and other terms used for local participation
as a blockage. All investment destinations require this and the requirement for African economies to be
pressurised to forgo them as in investment condition is both exploitative and disingenuous.
If Italian laws call for localization from foreign companies investing in Italy, it is common cause
that when Italian companies invest in other destinations, they should expect the same laws to apply to
them. Prospective Italian investors should be prepared to be faced with these conditionalities and do
their business plans with localization and local content in mind.
In South Africa, Broad-Based Black Economic Empowerment (BBBEE) is a condition for
investment. In Mugabes time, local ownership in Zimbabwean mines was threatened to be 51% and
foreign ownership to be 49%. Investors, including South African investors, were willing to accept the
Zimbabwean split while rejecting the 26% local ownership demanded by the BBBEE in their own
country. I cannot say more about the duplicity of this stance.
African countries and institutions are stepping up efforts to close the skills gap and capitalize on
growing FDI flows to build greater technological capability, enrol more students in science and
technology disciplines and strengthen science and mathematics education at all levels. The ratio of
scientists and researchers in sub-Saharan Africa stands at just 79 per million population, compared to a
world average of 1,081 per million. Only 22 per cent of African university graduates is emerging with
degrees in the STEM disciplines, compared with a 40 per cent ratio in China. (Diop, M; Li, Y.; Yong.
L. and Shide A.A. Africa Still Poised to Become the Next Great Investment Destination. The World
Bank. June 30, 2015).
Italian companies should be able to glean from the book of Google. The US tech giant planned to
train 300 000 people in South Africa, a country where 35 per cent of 15-to-34-year-olds is unemployed.
A further 400 000 Nigerians and 200 000 Kenyans will receive free digital training, while another 100
000 people will be selected from other sub-Saharan Africa countries. (Prinsloo, L. and Kahn. J. Google
will train a million Africans. Business Report. 13 April 2016).

10
 The selection of these countries is instructive. They are Africas major growth points from which
springboards to regions, resonating with the point I have made elsewhere in this paper, from which
investments to neighbouring countries can be anchored. Italian counties would not grasp the intricacies
of the Southern African Development Community (SADC) without understanding South Africa; would
not know how West Africa works without understanding the politics of Nigeria. Neither will they know
East Africa in the exclusion of Kenyan economic and political dynamics.
To attract investment, Africa should improve financial services such as banking facilities which will
make it easier for the flow of capital generated from business. Many African states have not evolved
successful banking systems. They should collaborate in providing these for both their populations and
investors. With about 21% of the adult population having a bank account, sub-Saharan Africa has the
lowest level of financial penetrations. In other developing regions such as Latin American and the
Caribbean, the share increases to 34%, whereas in OECD countries the average is 90%. (Nyantakyi and
Sy, M. The Banking System in Africa. Main Facts and Challenges. African economic brief. African
Development Bank. Volume 6. Issue 5. 2015).
As an investment-hungry continent, Africa should be able to offer tax incentives and tax breaks
without compromising national fiscus and financial imperatives of African Government. Tax incentives
are a function of effective tax collections systems. If tax revenue grows faster than the economy, African
nations will have greater funds at their disposal for social c investments in areas such as education and
healthcare.
The key barriers today boil down to weak tax laws and incapable tax administration infrastructures.
(African tax authorities consider how to boost revenue. TRALAC. 23 Aug 2017). Effective tax collection
jurisdictions have to come on board to assist African countries to evolve these tax collection regimes,
not to exculpate themselves from paying required taxes themselves, but to create a taxable investment
environment for their own companies on the continent.
There is a bigger role that must be played by African Governments to attract foreign investment
from Italy. They should identify companies whose investments would be synergistic with their
countrys development needs, engage in individualized lobbying to attract such investment and lay out
specific incentives. (Amdetsion, F. Strengthening Business Ties Between Italy and Africa. Fair
Observer. September 23, 2016).
As Africa integrates into the global economy, she should be open to accepting fit for purpose
technologies to encourage the improvement of production from old methods to new ones. The
introduction of disruptive technologies should be explored for global integration. Disruptive
technologies have the potential to drive efficiencies in business and public service. It will help in
combating corruption. It can improve the ease of access to markets. It can improve health care and
prevent crises. It can assist education, innovation and job creation. Lastly, it can bring the informal
sector into the mainstream economy.
(https://www.pwc.com/gx/en/industries/technology/publications/disrupting-africa--riding-the-
wave-of-the-digital-revolution.html)
States that seek to draw investors should identify high return projects to offset the perception of
investment risks of investing in Africa. Its important to acknowledge that Africa tests an investors
patience. Time horizons and return models that fit other markets dont always work in there. Even the
most experienced, sophisticated companies can be forced to recalibrate, as Nestl did last year when it
announced a 15% cut in its workforce across 21 African countries. (Al Essa, T.N. Six Reasons To Invest
In Africa. World Economic Forum. 6 May 2016).
Some economists argue that African governments need to fight corruption instead of relying
on foreign aid. Many countries, including Nigeria, Kenya and South Africa, have made meagre
progress on fighting graft. All three countries have established anti-corruption agencies that
sought to prevent, investigate and prosecute corruption without much success. (Mohammed, O.
Corruption remains a huge challenge for African economies. Quartz. January 28, 2016). Anti-
corruption authorities become corrupted themselves, or those they target, devise counter-strategies to
cast doubt on the work of corruption-busters.
Whistle-blowers are not given adequate protection. In both Italy and Africa, corruption busters are
despised or even worse murdered. Italy and African should find solutions to this and quickly. Even
when Multi-National Corporations (MNCs) are corrupt in their operations, they have deliberately

11
pointed the fingers at the African governments. It is about time that African countries should pull the
carpet under them. They should embark on an aggressive anti-corruption drive.
Even when there is a perception of corruption, governments must be seen to be doing something
about it. A 2002 African Union study estimated that corruption cost the continent roughly $150-
billion a year. (Mohammed, O. Corruption remains a huge challenge for African economies. Quartz.
January 28, 2016). Sixteen years later this has multiplied. To compare, developed countries
gave $22.5-billion in aid to sub-Saharan Africa in 2008, according to the Organization for
Economic Cooperation and Development (OECD). (Hanson, S. Corruption in Sub-Saharan Africa.
Council for Foreign Relations. August 6, 2009).
The economic departments should make the business registration process less cumbersome such as
establishing one-stop shops for business registration. A prolonged and convoluted business registration
process opens the process for delays and space for corrupt officials. South Africas Minister of Trade
and Industry said. Its a one-stop shop, when you come physically to the premises you will be able to
walk through the door, you will be able to interact with officials from InvestSA from the Department of
Trade and Industry (DTI) to find out what incentives are available, with the South Africa Revenue
Service (SARS) to ensure that your registration for Value-Added Tax (VAT) happens seamlessly among
others. We offer investment information, we also offer aftercare services to investors. (One stop shop
to make doing business easier. Financial News. 20 May 2017).
Continental states should also get into partnerships with investors who also seek to improve
societies. According to the 2016 research, half of the funds surveyed in Southern, Western and Eastern
African states, companies are using their returns for benefiting their clients and to achievements that
are good for society at large. Henry Ford might have had this in mind when he said a business that
makes nothing but money is a poor business. (BrainyQuote). Companies have catching phrases to
advertise their businesses. None of them tells you about their insatiable appetite for making profits but
claims to be operating for the good of society. The Italian Budget Act of 2017 regulated the formation
of benefit companies (societs benefit), with the aim of satisfying profit goals, societal objectives and
environmental protection. These types of companies would be most welcome to invest in continental
projects.
The continent should improve the performance of State-Owned Companies (SOCs) and align them
with Corporate Governance and correct business ethics. This will require that SOCs recruit suitably
qualified personnel who will understand the need for the provision of public goods while making them
profitable and self-sustaining entities. This is linked with the skills issue I have raised in this paper. It
is undeniable that in most cases the employment of SOC management is driven largely by patronage
than skill and competence.
Dictated to by political heads and succumbing to elite pressure, the operation weaknesses of SOCs
become manifest when there are unclear, complex, and frequently changing laws and regulations; lack
of transparency and accountability; low public service salaries and inadequate, inconsistent and unfair
enforcement of laws and regulations. (Ssonko, K.W. Ethics, Accountability, Transparency, Integrity and
Professionalism In The Public. Capacity Building Workshop for Public Sector Human Resource
Managers in Africa on Strengthening Human Resource Capacities for the Achievement of the
Millennium Development Goals and Africas Development. Cotonou, Republic of Benin 12 to 16
April 2010).
Although investors can invest anywhere where they can make a profit, they are more willing to
invest in democratic systems where there is a rule of law and free democratic expression through regular
elections, an independent judiciary, a free media and a vibrant civil society. In some African countries,
there is a growing concern that some foreign-sponsored organs of civil society, pretending to protect
and promoting these democratic values, serve external interests and want to determine the political
narrative to the undermining of established political entities. Countries run by despots perform the worst
in the Africa Country Benchmark Report (ACBR) economic segments because their economies are
weighed down by cronyism, patronage, nepotism and policies that only benefit the fortunes of leadership.
(Looking at the data: Lessons on best African economic policy. IN ON AFRICA IOA. 23rd October 2017).
The -isms should not be blind to the contrarian behaviours of some leaders. Some of Africas coming
economic successes will be in societies that have won the struggle for an accountable democratic government.
But others will be in societies in which autocratic leaders have become ambitious for national goals rather

12
than merely for power and privilege; expect some African repetitions of Malaysias experience. (Collier, P.
The Case For Investing In Africa. McKinsley and Company. June 2010).
The Venezuelan example is not lost to African countries. Since 2009, the U.S. Department of State
has budgeted at least US$49-million in total to support right-wing opposition forces in Venezuela who
are now in their seventh week of violent protests to oust democratically-elected President Nicolas
Maduro. (Telesur, 17 May 2017). The U.S. government is silent on the widespread violence of the right-
wing opposition groups that they fund, which in 2014 resulted in 43 deaths, of which the opposition
was responsible for more than half. (Ibid).
Africa should diversify the economy from mono product economies to allow investors to explore
other opportunities and increase their footprint in the other sectors of the economies. This partnership
could work well with countries whose source of revenue is from a single product economy. Relying
heavily on one sector - be it oil, mining or an agricultural commodity - means a single shock can
devastate an economy and erode the investment that has been made in this one resource economy.
Two examples of reliance on one product are clear. In 2015, Chinas imports from Africa fell by
40% as a result of the countrys slowing growth. The drop in demand for iron ore, oil and other minerals
triggered a global collapse in commodity prices. In Zambia, where copper accounts for 60% of exports,
the currency, the kwacha, hit an all-time low two years ago and remains depressed.
In Nigeria, the collapse in oil prices resulted in budget deficits and depleted foreign reserves,
culminating in a recession that the country has only just emerged from. According to the National
Bureau of Statistics, the 0.55% rise in Nigerias GDP in the second quarter of 2017 brought five
consecutive quarters of contraction to an end. (Yusuf, K. Why African economies need to diversify.
ACCA. 01 November 2017).
Diversification does not occur in a vacuum. There needs to be an enabling environment to make
diversification possible. Some key drivers have already been identified by the 2007 United Nations
Economic Commission for Africa (UNECA) Economic Report on Africa. They include investment,
trade and industrial policies; a dynamic growth performance; macroeconomic stability, a competitive
exchange rate and expansionary but responsible fiscal policy; and institutional variables such as good
governance and absence of conflict. (OECD/United Nations (2011), Economic Diversification in
Africa: A Review of Selected Countries, OECD Publishing).
Africa is urbanising fast. Large portions are still rural and women, Engage in rural business that
draws in women who are 50% managers of farms in rural areas. Women are the backbone of agriculture
and food production in Africa, supporting its population by producing 80% of its food. But African
women farmers are excluded from conversations that determine agricultural policies, while
discriminatory laws and practices deprive them of their land, their rights and their livelihoods. 5-50%
increase in crop yields, 30% increase in womens income, 25% of women added one or more income-
generating activities, the majority of households are now eating three meals per day. Women enjoyed
more respect and became decision-makers in their homes. Women took on leadership roles in the
community, joining village councils and forming advocacy networks. (Keeping food on the table in
Sub-Saharan Africa. Global Fund For Women).
Farms should be unlocked for businesses rather than for sustainability. There is a lot that Agrex
S.p.A. can invest to bring agricultural equipment to assist African farmers. Vast lands lie fallow as
African families concentrate on subsistence farming. Hand hoes are not sufficient to plough the vast
expanses of land available.
It would also be beneficial for investors to embrace the growth of African women involvement in
all sectors of business as the continent slowly sheds its patriarchal image, if only we discern this from
the growing role that African women are playing in corporates, government and academic sectors.
Agriculture accounts for 60% of all African jobs but contributes only about 15% of its GDP. 70% of
the continents agricultural output comes from smallholders who do not have the skills, knowledge and
financial muscle. They cannot afford new technologies. (Blom, N. Aerospace could help farmers
produce much more with less. Business Day. November 2018).
Investors in the agricultural sector should desist from promoting the cultivation of crops which they
later dismiss as a killer disease. Current health considerations dictate that sugar plantations might have
been profitable in the past, but there is no evidence that sugar leads to many diseases. Governments are
now taxing sugary products which are detrimental to the well-being of their people. Tobacco economies

13
are suffering under the strain of the World Health Organisations (WHO) warning about its negative
effects.
The March 2017 MasterCard Index of Women Entrepreneurs (MIWE) Report contained good news.
Uganda has the highest percentage (34.8%) of women business owners in the world. The East African
country led in various key components of the survey; the highest percentage (90.5%) of female
entrepreneurs in the world borrowing and saving money to start a business, highest (93.9%) labour force
participation rate and a 100% women entrepreneurial activity rate, meaning women are as likely as men
to start a business. Cultural perceptions of female entrepreneurs in Uganda were surprisingly higher
(68.8%) than the average (41.3%). Second in the index was another African country Botswana at
34.6%. Out of the six African countries included in the 54-country survey, four were in the bottom half
South Africa, Tunisia, Egypt and Algeria. (The Rise Of The African Woman. Forbes. October 31
2017).
Italy was not as big a colonizer as her British and French counterparts, but she left her colonial
possessions as devastated nevertheless. She has to atone for her colonial past. Somalia, Libya, Eritrea
and Ethiopia are still shouldering the pains of their colonial pasts. Somalia, primordial tribal conflicts
have been rejected as an explanation of incessant conflict. Her colonial past, shared by the British and
Italian colonisations, continued the rivalry of the two Somalis post-independence. Although not a bad
thing in and of itself, tribal leadership as a common and dominating feature in Somalian society
alongside a weak democratizing State undermines Mogadishus control. In one rare visit to Mogadishu,
the delegation was hijacked to first address tribal leaders who had been assembled from the many
corners of the troubled country before meeting the political leadership in Mogadishu.
In Libya, a former colony whose instability has come back to haunt the former Mother country,
Italy needs to action the 2008 cooperation treaty, which included $5-billion in Italian compensation for
colonialism. Admitting guilt, the then Italian Prime Minister Silvio Berlusconi, said the money was
compensation for the killing, destruction and repression of the Libyan people. The treaty fell to the
wayside during the Arab Spring and the civil war that followed in 2011. Arens recalls Italys role in
the conflict. Day and night, Italian fighter jets take off from Birgi Trapani air force base in Sicily and
from the aircraft carrier Garibaldi to drop their deadly cargo over the former Italian colony. (Arens,
M. Italys Role In The War On Libya. World Socialist Website. 14 May 2011).
Italy has a double compensatory responsibility to Libya. The first one is for its colonisation and the
second one is collective guilt with all countries which bombarded Libya to remove Gaddafi from power,
an action which was not a strategic move for the stability of the former colony, as observed by a no less
honest individual than former London Mayo and now Prime Minister hopeful than Boris Johnson.
(http://www.africanews.com/2017/08/26/removal-of-gaddafi-a-tragedy-so-far-uk-s-boris-johnson-
after-libya-visit//).
In Ethiopia, Italy may have been some amends, but the amends either came too late in defiance of
the terms of the Treaty of Versailles or were not implemented in full. The obelisk was returned after 70
years in Italian exile, but the archives of the Ministry of the Pen are still not returned (Amdestion, F.
Italys History in Africa is a Messy Affairs. Fair Observer. September 16 2016). Returning the spoils
of war artefacts have been resisted by many European countries which keep them. Underpinning the
pretences of the benevolent keeping these artefacts in Europe for the greater good of humanity, g
is the nostalgia for the imperialist and colonial glory. Europes colonial past is not shrouded in glory in
the eyes of its victims. It is a constant reminder of how humans can visit harm against one another.
Rome can do better to increase its advantage in Africa by acknowledging this sad past.
Italy, being the closest European states to Libya bears the brunt of African migrants running away
from their repressive governments and dire economic situations to Europe. 119 000 African arrived in
Europe in 2018. (Merkel looks to investment in African cement her legacy. Business Day. 1 November
2018). Ideological dogmas can cloud solutions. Ministers in power and current solutions by Italian
Interior Minister, Mateo Salvini of migration centres in the forward refugee positions in Africa pander
to the right wing. With the support of the anti-establishment Five Star Movement (M5S) led by Luigi
Di Maio, the Italian parliament won 163 votes. 50 votes were against, and there were 19 abstentions.
(Italy senate paves was for tough antimigrant decree. Business Day. 8 November 2018). The reality is
that any country which has received 650 000 boat migrants since 2014 like Italy has to evolve innovative
solutions. (Elumani, H. Italy Proposes African Migration Centers To Halt Immigrant Tide. Reuters.

14
June 25 2018). One such solution is not the forward migrant positions, but investments in the African
countries to reverse the centripetal forces of migration.
Mass exoduses should not be seen as an only African but a global problem. The South American
caravan to the United States and reactions to it by the Trump administration pander to his right-wing
constituency. They do nothing to reflect the reality of our present times and the global inequalities which
give rise to them. The Syrian conflict has unleashed a mass exodus to Europe which destabilizes
Governments as they try to accommodate and contain it.
What is negative can be turned into a positive for the benefit of Italy and Africa. Many African elites
have perfected the art of corruption, a scourge which Italian authorities have been fighting for decades
amongst its organized criminal elements. The operations of embezzlers and corrupt officials in African
administrations, colluding between these officials and private sector players require the sharing of
expertise to fight it. The global tentacles which corruption has assumed, including safe havens, offshore
investments and illicit transfer of crime proceeds, require the joining of hands.
African states should consider a deliberate creation and encouragement of the middle class. The
Africans middle class, earning between $4 and $70-a-day, will increase by more than half a billion
people in 2030. The middle class presents opportunities for investors in the consumer-related goods. A
new estimate of sub-Saharan Africas urban middle class in 2017, excluding South Africa, puts the
number at 100-million people commanding spending power of at least $400-million (R5.3-billion) a
day. The African middle class has diverse income streams. Only 37% have formal jobs, either in
government or a private business, about 21% have a second job, and 22% have a side business.
(Donnelly, L. African Spending Power Rises. Mail and Guardian. 19 May 2017).
Investors should be warned not to rely only on headline economic indicators. Companies estimates
of the consumer opportunity in Africa tend to be based on Gross Domestic Product (GDP) and
demographic growth data. These are misleading because they do not reflect how wealth trickles down
through the economy. In Africa, the average purchasing power is very low because economic growth
has not created well-paying jobs, but instead, it has created a small elite class and a large poor population
with little spending power.
Investors also make the mistake of overlooking the informal sector which is not captured in official
statistics. Over 50% of the adult population in Africa earns its income from the informal economy. The
informal sector accounted for 93% of new jobs across Africa and 61% of urban employment. (Donnelly,
L. African Spending Power Rises. Mail and Guardian. 19 May 2017).
The vastness of the continent is such that even if the infrastructure is provided, there will still be a
growing role for the use of mobile telephony to address health and educational and business access.
Africans, particularly the younger generations, are themselves evolving innovative ways to use mobile
telephony to their infrastructural challenges. Businesses that seek to exploit virtual and mobile growth
will do well to invest in the continent. Sub-Saharan Africa currently has 420-million unique mobile
subscribers with a 43% penetration rate. By 2020, this number is expected to hit over half a billion,
making Africa the fastest growing mobile market. (Over half a billion mobile subscribers in Africa by
2020 [Hi-Tech]. 25/07/2017).
Italian companies in the sector, such as Telecom Italia, should invest in Artificial Intelligence (AI)
and the Internet of Things (IoT) systems to benefit Africa, both to ride on the potential that currently
exists and to bring Africans outside of it into the loop. TIM S.p.A should seriously consider these
investment opportunities. Hey, perhaps one day TIM S.p.A or Olivetti may collaborate with young
African mobile technicians to develop an App that will herd cattle for the Masai!
Artificial intelligence and Industry 4.0, sometimes referred to as the Fourth Industrial Revolution
(4IR) should not leave Africas behind. Africas youthful populations should be allowed to be involved
in disruptive technologies like their global counterparts. Africas generation is peacefully replacing the
millennials (Generation Y). While in the past the cultural inhibitions have limited the African youth to
express themselves in deference to their elders, they have now come out to be innovative. Italian
investors should not shy away from this self-expression by the African youth and identify enhancing
mutual investments that will benefit both Italian and African youths.
Italian companies should readily accept that the African youth is not as docile as their colonized
forefathers. They may indeed be arrogant as Italian youth, but their arrogance must be harnessed
because it is an arrogance that can also be a vehicle for innovation and disruption. They should be given
opportunities. They have ideas, but the money is not available.

15
 In line with the mobile platforms, the investors should always keep in mind that the population of
the continent is youthful. About 200-million Africans are between the ages of 15 and 24. (Blom, N.
Aerospace could help farmers produce much more with less. Business Day. November 2018).
Investment in the youth will yield benefits in both their high educational value, their innovation and
their longevity in business. By 2023, at least 15% of all business start-ups should emanate from the
youth and will be empowered by having enhanced access to capital/finance, market access amongst
others, with the objective of reducing the 2013 youth unemployment rate by at least 25%. (Agenda
2063: The Africa We Want. African Union).
Compared to the other regions and continents, effective financial instruments are found in a few
countries. Financial markets are one area of investment which should be explored by investors. Banks
that exist in the continents do not all provide full banking services. Investors should consider blended
finance, local debt and equity instruments and public-private partnerships (PPPs).
Running parallel to the banking sector are opportunities in the insurance industry to service Africas
new generation of youth who are embracing technology, known as digital natives This area is
undeveloped because African accounts for only 1.2% of global insurance premiums and the literacy
standards, technology advertisements and urbanisation are perfect platforms for increasing the
percentage. Africas emerging middle-class may wish to safeguard their newly found wealth and
insurance is the ideal vehicle. (Ready and Willing: African insurance industry poised for growth. PwC
Report. 2017/2018). What experience can Assicurazioni Generali, accumulated since 1831 bring to the
African continent?
Partners entering in the last of the relationships, PPPs, should be clear in their terms that it is not a
sale of assets. If the mixed economy approaches are in vogue in current international economy and
investments, then the PPPs are their practical examples. The need for transparency is needed where
both citizens and shareholders are assured of the benefits that will accrue to them. In countries where
PPPs have been entered into, private sector companies have tried to bring in the least commitment. PPP
projects end up being seen as State projects than a partnership, but with private sector companies using
their minority stake to call the shots as if they control the majority share.
Short-term loans and investments in short-term debt instruments seem to be dominant. These
instruments do not trade through an exchange, but rather OTC (over-the-counter). Sophisticated
instruments, such as debentures and derivatives, are still at their nascent stage. Investors need to source
other forms of finances to unlock the continents potential. Companies that invest in the continent have
adopted a position of hunting in pairs. When they seek to invest, they are accompanied by the financial
institutions or the development agencies of their own countries.
In most cases, commercial negotiations have already been agreed between them. When investing
countries promote their products, they also tell you that funding is not a problem. It is usually patriotic
funding that funds projects from their own countries. Funding has been secured even before investments
are negotiated. Countries, where companies invest, should always be wary of not being seduced by the
already available finance, but by the relevance of the investment and project to their own developmental
needs. Seduction by the availability of finance leads to White elephant projects. Investments are not an
unfair relationship where the investor has the unfettered power over the investee. They are for equal
long-term benefits.
Italian companies should understand that African countries are now proud not to be the meek
recipients of investment but want to unlock win-win investment agreements. Secondly, the tendency by
investors that once they have secured the acquiescence of the political leaders, usually the Big Father,
they have clinched the deal has fallen away as African citizens assert themselves against leaders who
undermine their (citizens) interests). Some pushback against nave acceptance of lopsided investments
is negotiated at the higher level of the African Union, which is gradually finding co-ordination of its
economic policies.
A new debate is raging about debt colonialism referring particularly to the growing role that is played
by the Peoples Republic of China (PRC) in infrastructure investment in Africa. Rejected by its
opponents as neo-colonialism, a lot of chaff should be separated from the wheat about whether much
of the criticism is genuine or jealousy about Chinas growing role in the continent. In the last 18 years,
China has pumped more than $124-billion into Africa, while the International Monetary Fund (IMF)
has warned of increasing debt distress in 15 African countries.

16
 Perhaps at the end of the day, it is not the amount, but the potential of whatever amount can unlock
for African countries to escape poverty, inequality and hunger, among the many other scourges that
ravage the continent. Msomi warns: This is not to say that Africa should not get into a relationship with
China with its eyes wide open. We should be suspicious if everyone, especially given our long history
of being dominated and exploited. (Msomi, S. Dj vu as Chinas rise in economic power sparks off a
New Scramble for Africa. Sowetan. November 8 2018).
Africas debt to China is less than a dent to the West. In many other African nations deemed to be
at risk of being in debt distress or are already debt-distressed, the researchers found that Chinas share
of their debt, though not insignificant, is not necessarily the problem. For instance, Mozambique had a
debt of $10-billion, with Chinas share being about $2.3-billion. China holds 23% of Zimbabwes
external debt, and the Paris Club holds the remaining 77% - 19 countries that include some in Western
Europe, Britain, Scandinavian countries, the United States and Japan -and other multilateral agencies.
(Donelly, L. Africas Debt To China Is Sophisticated. Mail and Guardian. 14 September 2018).
We need to respond to question of why are loans referred to as a money pie when China offers
them to Western countries and money traps when offered to African countries. (Daniel, L. Debt
Colonialism: Is China Trying To Buyout Africas resources? The South African. 2018-09-03). We also
need to balance the conditionalities that are imposed by the two lenders, the Western lenders and China
and between them choose the best and the most tolerable that will not undermine the sovereignty of the
African States. A country like Ghana which was subsidising rice farmers in the northern parts of the
country was forced by the World Bank and the International Monetary Fund (IMF) to cut these subsidies
to open space for Western agricultural products.
The concern with agricultural subsidies in Africa is misplaced if we use a comparator. The
developed world subsidizes their farmers to the tune of $12,000 per farmer per year, while the
developing countries subsidized their farmers to the tune of $6 per farmer per year, said the Director-
General of the Food and Agriculture Organization (FAO), Dr Jacques Diouf. (Hanson, E. Ghana:
Subsidizing the Ghanaian Farmer Could Stop Dumping. Public Agenda (Accra). 8 December 2016).
Overseas development aid (ODA) is taking a strain as major donor countries increasingly become
inwardly focused. Change of governments in donor countries, leaning more to the right, are cutting their
foreign aid to the developing countries, or imposing onerous conditions for extending them. The
ideological shifts will have a large negative impact on the economies of African countries which rely
on aid. It is now not the need for the uplifting the poor from abject poverty, a pursuit richer countries
have been alive to for ages. It is not how close countries, of whatever size or economic level, align
themselves with the geostrategic intentions of the richer ones.
Ominously, but perhaps a fault in the investment system is that political leaders in the investing
countries expect their financial institutions and development agencies to follow their cue, even if it is a
bad cue. Italy may itself be leaning towards the right, but it should follow its inevitable need for trade.
The African continent, for both left and right leaning economies, is still offering the new frontier of
economic growth. Governments will rise and fall, and the investors and financiers will outlast them.
That is why companies should as they always have looked beyond their current governments to
determine their investment strategies.
Sovereign Wealth Funds (SWF), of which there are 15 of various types in Africa, are a potential
source, but they would need to be rid of the perceptions of being centrally controlled and serving the
interests of the political elite. The potential for these funds to unlock the investment potential is huge.
These funds together with Pension Funds and Insurance Funds are valued at $1-trillion. The amount is
a dot compared to the global size of these funds at $ 131-trillion If Africa can attract just 1% of these
global funds, her whole infrastructural needs of $130-billion. (Investors Bright Future In Africa. Africa
Investment Forum. Business Day. 6 November 2018).
On the sidelines of one of the annual United Nations Generals Assemblies, the head of the Angolan
Sovereign Wealth Fund was feted as the blue-eyed boy of these Funds. His advice was sought on how
the Angolan experience could be used as an exemplar to other jurisdiction. The downside was that as a
son of the Angolan President, his responsibilities to the Fund were inextricably linked with the political
fortunes of his father. Properly monitored, Sovereign Western Funds require scrutiny as funding
mechanisms for investments.
Most African investments are guaranteed by the global financial institutions and investors always
work with these institutions to leverage funding. The African Development Bank (AfDB) is the premier

17
institution to explore funding because it is funding projects that have also been identified by the African
Union (AU) for multi-country and multi-sectoral benefits. The Development Bank of Southern Africa
(DBSA) also provides finance and funding for many projects on the continent. Private banks in African
can also be approached as some of them have excelled in providing finance for large infrastructure
projects.
A point that should be emphasized is that any loans, irrespective of its source should not put the
African in a worse debt situation than they are. The indebtedness of African countries undermines their
sovereignty and to civil unrest. Unstable States undermine the very investments that African countries
seek, as investors avoid countries involved in wars. The only investors who have healthy returns are
those involved in war materiel. To reignite the continental economies, would-be investors should
partner with the African Unions goal of silencing the guns in the continent.
African countries are already in debt. They may be indebted to Italian companies. In the past, debt
swaps were suggested, but these mired the African countries into deeper debt. They were nothing more
than a postponed amputation of their sovereignty. Tempting as it may be, perhaps Italian companies
should begin thinking of debt cancellation to open up new spaces for investments. In countries
previously colonized by Italy, such debt cancellation should be linked to reparatory measures such as
the one promised by Berlusconi sixteen years ago but left unfulfilled.
It is early days to assess the impact of the infrastructural investment intentions of the New
Development Bank (The BRICS Bank) in South Africa. A creation of Brazil, Russia, India, China and
South Africa (BRICS), the Bank has indicated that its loans will be extended to non-BRICS members,
and recent BRICS meetings have invited other Africans leaders who are not members of BRICS. Its
perceived competition with the existing global financing institutions still has to play itself out, and
whether lending institutions of constitutive countries, especially the big-hitting Chinese ones will allow
it space to lend.
The issues I have identified are by no means exhaustive. Throughout the Summit/Indaba, many
speakers and experts augmented them. When the Summit/Indaba concluded, a canvass of ideas had
been collated to extend the sharing of ideas between South African and our development partners. The
outcome of the Summit/Indaba and future ones should continue to sell the story of an Africa rising and
to draw as many investors to our continent as possible.
_______________________________________________________________________________
Dr Jabulani Mzaliya is Special Adviser to the South African Minister of Energy. The views expressed
here do not reflect those of the Ministry or the Department of Energy. He taught Politics AT the
University of Zululand (Durban-Umlazi Campus). This article is written in his personal capacity.
Cell: 0829060890. Tweeter: @Mangondwane. Email: JMzaliya@gmail.com. Facebook: Jabulani
Mzaliya

18