 PERTH (miningweekly.com) – The investment of Australian companies in Africa's resources sector has reached A$20-billion, a government official said on Wednesday.
The Department of Foreign Affairs and Trade (DFAT) secretary Dennis Richardson said that over 170 Australian companies were involved in nearly 500 mines and exploration projects in 40 countries on the continent.
He told the Africa Downunder conference in Perth, that it would be in Australia's interest to continue to step up investment in Africa, which is facing a new growth trajectory.
"This upswing in Australian interest in Africa comes at a time when Africa itself is on the move. Despite many challenges and some exceptions, Africa is today a more politically stable and prosperous continent than at any time in the past," Richardson said.
Quoting a recent report by the McKinsey Global Institute, he said that Africa's consumer spending would total $1,4-trillion by 2020, with around 128-million households having discretionary income, and more than half of its population living in cities.
"It will therefore be in Australia's interest to continue to deepen engagement with Africa."
However, Richardson noted that African countries would need to address barriers to economic growth.
Some 33 of the 49 least developed countries were in Africa, and economic growth, which slowed during the global financial crisis, would remain uneven and vulnerable to shocks in the global economy.
"Specifically, in order to raise capital and bring projects to fruition, legal and regulatory clarity and transparency will be essential, especially when it comes to mining titles, leases and licences," Richardson said.
He added that that DFAT and the Australian government were looking forward to working with African governments, industry players and international donors to strengthen effective standards of transparency and accountability.
"Because those African countries that have the most attractive mining codes and the most transparent investment rules will be the ones best positioned to benefit from global growth."
Richardson noted that those countries that have achieved the strongest growth in recent years were also those that had undertaken significant reforms. "They have improved macroeconomic stability, promoted exports, enhanced competitiveness and encouraged interregional trade.
"They have also promoted the private sector, strengthened markets and improved their regulatory frameworks, and have also introduced reforms in areas such as commercial law, property rights and investor protection."
The results, said Richardson, have been stronger growth and increased flows of inward investment.
"Tackling corruption and increasing transparency and accountability are priorities," he added.
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