7:17 AM Mar 20, 1996

AFRICA: NEEDS DOMESTIC INVESTMENTS, REGIONAL LINKS

Geneva 19 Mar (Chakravarthi Raghavan) -- African governments should focus on building an enabling environment for domestic investment, and promote regional linkages and integration before looking to foreign direct investment to solve Africa's marginalization, an African employers' representative advocated here at a seminar last week on Labour and the International Economy.

Mr. Imonite C. Imoisili of the Nigerian Employers' Consultative Association, said that the success of Globalization (in promoting rapid growth of world trade, flows in FDI and rapid technical changes) have started to breed concerns in losers and gainers. While Africa has been marginalized in this process, there are also concerns in Europe and America where there is a genuine fear of job losses.

In terms of globalization, with the possible exceptions of South Africa and Nigeria (in crude oil), there was hardly any sub-Saharan African country that can attain competitive levels, he said.

In the area of primary commodity trade, where Africa enjoyed comparative advantage, Africans have no control over prices and the dominant core nations dictate prices and the quality.

"This type of internationalization is nothing but imperialism", Imoisili said.

There was some 'benevolent accommodation' for Africa to the extent that, among others, the Transnational Corporations use producer-driven, buyer-driven commodity chains to control backward and forward linkages in production processes in Africa. The operation of Export Promotion Zones (EPZs) in Mauritius and Tunisia which produce made to order goods for EU countries, and tourism in Kenya were good examples of this benevolent accommodation, he said.

The main participation of some African economies in the international economy was through aid and remittances (of workers), creating an endemic dependency psychosis notably in East, Central and Southern Africa and Francophone Africa.

At the institutional level, in the WTO and ILO circles, there have been attempts to tie the social clause to trade and technical cooperation under pressure from the OECD countries -- "another good example of a marginalization strategy", he added.

Imoisili threw quite a dash of cold water on current prescriptions for Africa -- opening up economies to attract FDI and TNCs -- and said for African economies to participate competitively and favourably in internationalization, their governments should first build an enabling environment for their people and economies before talking of attracting outsiders.

"An economy that can attract domestic investment will also attract foreign investment. Therefore we should first concentrate on good governance, promotion of rule of law and development of our infrastructure.

"The next step is to harness trans-border trade and integration between and among African states, using South Africa in the South, Kenya in the East, Egypt in the North and Nigeria in the West as focal points. And African elite should be encouraged to repatriate Africa's stolen wealth, currently hoarded in bank vaults in Europe and America to fund our infrastructures and other projects. These, he said, reportedly are big enough to compensate for any FDI flows we are currently losing to Asia and Latin America.