African governments must invest more in social foundations like health and education, focus on specialization as continental free trade kicks in, maximize coherence and effectiveness; and think in the long-term to maximize the benefits of the global financial system.

Tharman Shanmugaratnam made these remarks when he addressed diplomats, captains of industry and investors at the Enterprise Singapore Ghana Singapore Business Forum held at the Marriot Hotel in Accra on November 7, 2019.

Invest more in social foundations

Mr Shanmugaratnam said any country which is serious about holistic development must invest more in social foundations such as education, health and housing.

According to him, African governments must make efforts towards raising the quality of education which involves paying teachers well amongst others.

He said it is crucial to invest in teachers because they are at the heart of quality education.

“If you don’t succeed in raising the quality of education, you won’t succeed at anything. Invest in teachers, pay them well. Good teachers add great value. Investing in teachers is the foundation of every good education system.”

The Coordinating Minister for Social Policies also noted that investing in healthcare is crucial to development. He urged African governments to focus on improving maternal health and child health.

Mr Shanmugaratnam added that the provision of decent housing cannot be ignored. ‘Deal with housing’, he said. Singapore focused on housing as part of efforts to invest in its social foundations.

“Mixing people socially in neighbourhoods leads to inclusive growth,” the minister said.

African Continental Free Trade Area (AfCFTA)

The African Continental Free Trade Area (AfCFTA) is to amongst others create a single continental market for goods and services, with free movement of business persons and investments and expand intra African trade through better harmonization and coordination of trade liberalization.

The AfCFTA with its headquarters coming to Ghana is set to cover a market of 1.2 billion people at an estimated GDP of $3 billion across the 54-member states of the African Union.

Sharing his thoughts on the AfCFTA, Singapore’s Senior Minister said ‘there is increasing protectionism across the world but Africa is singing a different tune.

Africa must spread its economic openness by strongly showcasing specialization along the production value chain.

“Regionalization gives a special way to specialize. We have to think of free trade as a way of building our capabilities. Countries can feed into each other’s speciality.

“Africa has to use AfCFTA to develop skill. It has to be fundamentally about regional supply base. It should be a production base, not a consumption base,” he said.

According to UN forecasts, the continent is expected to double its population by 2050, from 1 billion to nearly 2.5 billion.

It is also projected that in the next decade, Africa will have the largest working-age population in the world, larger than China and India with about 1.1 billion people of working age population of between 15 and 64 years.

Mr Shanmugaranum argued that in order to build economic resilience and create job opportunities for their increasing youth population, there must be stronger connectivity and economic interaction among developing regions, especially between Africa and Asia which share demographic similarities.

Singapore’s interest in Ghana and Africa

The Senior Minister indicated that Singapore is the eighth largest foreign investor in Africa. In 2018, Singapore invested about $90 billion in the continent.

He said there is a significant interest by Singapore businesses in Africa which needs to be scaled up.

“We need to take practical steps to spur this collaboration with more bilateral investment treaties that provide some assurance to investors,” he said. 

The Minister noted that the unique capabilities of Singapore companies would be a value-add to the region’s developments.

He said while Ghana serves as a gateway for international companies to enter the West Africa region, West African companies could look to Singapore as a gateway to growing Asia markets.

The Ghana Singapore Business Forum was organized by Enterprise Singapore, a statutory board under Singapore’s Ministry of Trade and Industry championing enterprise development and developing Singapore as a leading global trading hub.

The event brought together companies from Ghana and Singapore to network and initiate some business discussions.

There was a short MOU exchange ceremony which saw some noteworthy agreements between Ghanaian and Singaporean companies bordering on security, oil and gas being exchanged.

The event was facilitated by Mary Boakye, Senior Advisor at Dentons and Managing Director of Oriol Associates and Nick Opoku, a communications consultant.