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Finland launches regional partnership to promote investment in sub-Saharan Africa
The regional partnership to promote trade and investment in sub-Saharan Africa was launched at the Permanent Mission of Finland to the United Nations in New York on 13 April 2011. The partnership will assist secondary cities and regions in generating more local and foreign investment to build their productive capacity and ability to trade. The three cities participating in the first phase of the partnership are Mekelle of Ethiopia, Kumasi of Ghana and Tabora of Tanzania. The partnership will also contribute to the global dialogue on the importance of increasing sustainable investment and action at the sub-national level.
The mayors of the participating cities and the project team met with Earth Institute Director and world-renowned development economist Professor Jeffrey D. Sachs. Professor Sachs stressed the importance of investment at the sub-national level to meet the Millennium Development Goals. As regional hubs secondary cities play an increasingly important role to achieve broad-based poverty reduction, yet they receive only a marginal share of investment. Professor Sachs emphasized that there is no shortage of investment funds in the world, but there is a severe shortage of good and credible investment plans. The challenge for the secondary cities is to tap into those resources by improving their investment framework and by targeting potential investors.
Ambassador Jarmo Viinanen, Permanent Representative of Finland to the United Nations noted in his opening remarks that the launch of the partnership takes place at an opportune time in the run-up to the fourth United Nations conference on the Least Developed Countries to be held from 9 to 13 May 2011 in Istanbul. The LDC’s have identified building productive capacity as the number one priority area for action. Increasing sustainable investment, particularly at the sub-national level is a key element for building productive capacity, promoting equitable growth, decent work and reducing poverty.
The launch of the partnership was followed by roundtable discussion on the impact of private investment and trade on sustainable development in sub-Saharan Africa that was chaired by Karl Sauvant, Co-Director of the Millennium Cities Initiative. The roundtable noted that while the national investment policy framework is key to attract investors into a country, local level actions and capabilities should not be overlooked. All investment is local by nature and once an investor has decided to enter a country, it will have to operate within a local environment for the next 10 to 20 years and depend on the services provided by the local authorities. The panel also noted that secondary cities needed to be proactive and promote themselves as a destination for sustainable investment. There are plenty of viable investment opportunities in the cities, but a lack of information also among domestic investors on the opportunities that the cities offer.
The roundtable raised several issues that are relevant to the upcoming fourth LDC Conference on the importance of promoting sub-national investment. In LDC’s the bulk of investment, often over 90 percent, takes place in capital cities, while the bulk of poor people live in rural areas and secondary cities. Research by leading private sector companies such as KPMG demonstrates that there are plenty of commercially viable opportunities for investors at the sub-national level. Policy makers, investors, as well as donors need to take a fresh look at ways to turning those opportunities into sustainable investments that create jobs and reduces poverty.
The partnership includes three sub-Saharan cities (Mekelle of Ethiopia, Kumasi of Ghana and Tabora of Tanzania) the Millennium Cities Initiative (MCI), the Vale Columbia Centre for Sustainable International Investment (VCC), the MDG Centers for East and Southern Africa and West and Central Africa, and the World Agroforestry Centre. The Partnership is sponsored by the Government of Finland. The first phase of the partnership will run for 18 months and will culminate in an investment day in Helsinki to be organized during the second half of 2012.