EU programme to support FDI in SADC

2nd April 2004 By: candice haase

Over the next five years, an €18- million programme, funded by the European Union, will facilitate the development of foreign direct investment in the Southern African Development Com-munity (SADC) region.

The European SADC Investment Promotion Programme (ESIPP), as it is known, is still in the early phases of being rolled out. The project management unit for ESIPP was established in Botswana earlier this year by an Italian-led con-sortium of companies.

The new programme follows the Trade and Investment Development Programme (TIDP), a R20-million fund which was created in 1998 by the EU and overseen by the South African government.

Until this year, the TIDP supported South African companies’ efforts to train people, develop products and markets and encourage partnerships with international companies. Renaissance Directions Internation-al, now trading as Inta-Prise, a Johan- nesburg-based international business-partnership and trade-development company which assisted with the initial research for the programme, will continue to support the ESIPP programme by providing technical assistance.

Inta-Prise MD Paul Bishop com-ments that the research that will drive ESIPP reveals that there are existing opportunities for foreign investors in the clothing and textiles, woodworking, agriculture and mining sectors.

However, he states, the information communication technology (ICT) sector should be developed using foreign grants.

“We need to develop the ICT sector by introducing coding operators, as well as call centres,” Bishop comments.

He highlights India, itself an emerging market, as an example of the successful impact of the ICT sector on that country’s economy.

“If the economy in the SADC region is to survive, I believe we need to develop niche, high-end, high-value-added areas.” In another development, to support his vision to expand smart industries in South Africa and the rest of the continent, Bishop is in the process of creating a venture capital fund that will fund new projects that banks are not willing to look at and provide a stimulus for real growth and development in the economy. He plans to raise R1-billion to grow high-end value-added industry. A large portion of this fund will be raised from what Bishop refers to as unconventional funding sources, which include major donor agencies around the world.

The idea was conceived in March, and several leading financial institutions have shown an interest to participate in the programme already.

“At the moment, we are looking to raise a grant that will fund a business research and feasibility study of where and how to apply funding,” Bishop comments.

Inta-Prise also tracks the availability of grant funding, as well as deve- lopments in trade activity around the world.

Bishop maintains that the lowering of entry barriers will ensure that only the most competitive countries will succeed in the global-trade environ-ment. He also informs that industry in the poorer regions, particularly Africa, continues to be marginalised.

Consequently, he stresses the need to forge partnerships with international business to develop industry and infrastructure.

He adds that developing trade zones in Africa is essential to attaining foreign grants. Trade integration through the South African Customs Union and SADC have to be realised to attract loans, grants and guarantees from the World Bank and its agencies.

Inta-Prise has partnerships with business linkage organisations Market Access International, in the US, and Metra Economic Consultants, in the UK.

“We are also part of a European part-nership network covering 83 countries,” Bishop remarks.

Australia is the only country where Inta-Prise has no business links.

Effectively, the company facilitates business partnerships across the sectors. It identifies opportunities and require- ments for companies that can benefit from grant funding.

The company also constructs the business deal once the grant funding has been sourced.