ADDIS ABABA - Several prominent attendees to the World Economic Forum on Africa are urging governments to loosen state controls to unlock the continent's growth potential. Africa remains a mixed picture for foreign investors.
Former Nigerian Central Bank Governor Charles Saludo said Wednesday that African governments must use their regulatory powers carefully if they want to foster growth.
"We have an enormous responsibility to realize that in Africa, the first job is to create the financial infrastructure," said Saludo. "That is a big topic. How do you create? It's not just about regulation, it's about development of something."
Saludo spoke at a United Nations-sponsored conference on the sidelines of the World Economic Forum on Africa. The forum is showcasing the continent's potential as a destination for foreign investment.
But the former Nigerian central banker said his experience suggests that campaigns aimed at attracting investment would have limited success. He said the best governments can do is to create a business-friendly environment and then get out of the way.
"The previous governments were going all over the world asking for foreign investors to come in," Saludo added. "My hypothesis was that, no, it's not a favor. You're not going to ask them for a favor. If it is profitable for them to come in, they will come."
A new study by the global firm Ernst and Young shows that although investment in Africa is picking up and has almost returned to levels last seen in 2008, the entire continent still attracts fewer investors than India and far fewer than China.
Nevertheless, these investments are helping to spur growth rates of more than five percent in several sub-Saharan countries.
But Titus Edjua of Cameroon, a lawyer in the London office of the Clifford Chance law firm, says those figures can be deceiving.
"We have to admit that some of the higher levels of growth is a function of the fact that we're coming from ground zero," Edjua noted. "It's not distorting, it's just that we have to grow a lot faster to get to anywhere closer to the rest of the world. So that helps the growth figures. I don't think we should sit on our laurels and say because we've grown five, six, seven, eight percent, that's enough. It's not enough. It has to be sustained over decades for us to get to anywhere we hope to be."
The economic forum's Thursday agenda will take up the question of shaping Africa's transformation in the decades ahead.
Sessions will shine a spotlight on the new generation of innovative entrepreneurs and investors and on issues such as accelerating job creation on a continent where more than 70 percent of the working age population is either without a job or is vulnerably employed.
Seven African heads of state and government are scheduled to attend, along with former United Nations secretary-general Kofi Annan and former British prime minister Gordon Brown.