High time for Malaysia to invest, increase trade ties with Africa – Ambassador - MIDA | Malaysian Investment Development Authority
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High time for Malaysia to invest, increase trade ties with Africa – Ambassador

High time for Malaysia to invest, increase trade ties with Africa – Ambassador

25 May 2022

Malaysia which has long ties with African countries has been urged to focus on Africa for more trade, investment, tourism and educational ties as the world’s second-largest continent offers numerous opportunities and vast potential for natural resources to be explored for mutual benefits.

In making the call, Somalia’s ambassador to Malaysia and Dean of African Heads of Missions in Malaysia, Abukar Abdi Osman said the rapidly changing global geopolitics following the military conflict in Ukraine, had forced many European countries to look to Africa for natural resources as well as oil and gas. 

He cited China as a country which dared to explore and invest hugely in Africa despite constraints such as language and cultural differences with the African continent, but today not only has China reaped the benefits of focusing on Africa at the right time but also many African countries have benefitted in terms of infrastructure development like new roads and highways, railway lines, healthcare facilities, ports, sports facilities and agricultural development.

“So, this is the right time… please wake up to the potential presented by Africa and build a strong will to explore Africa’s economic opportunities. In the past Malaysia has been left behind as it failed or was late to grab the opportunities in Africa, but there are plenty of opportunities still available (for Malaysia and other countries) and that’s why European countries are refocusing on Africa now,” he said.

Abukar Abdi, a former Somali federal minister was speaking to Bernama in an interview in conjunction with Africa Day on May 25. Africa Day is the annual commemoration of the foundation of the Organisation of African Unity on May 25, 1963, later transformed into the African Union (AU) on July 9, 2002.

The Celebration for 2022 is under the theme: Strengthening resilience in nutrition and food security in the African Continent. Africa is the world’s second-most populous continent.

Abukar Abdi stressed that at one point of time, Malaysian companies and businessmen were a bit active in entering Africa, but in the past many years, not much progress has been made in terms of doing business with Africa, a continent which today being seen as able to provide food security to the world due to its huge arable and fertile land for agriculture.

Several Arab countries are investing heavily in Africa, purchasing land for food production and cultivating wheat and other crops to ensure the food security of their nations.

Another pertinent point raised by Abukar Abdi is the many similarities that Africa shares with Malaysia, – climate, food and lifestyle, colonial history, people friendliness, rich in culture and being countries which are in the Commonwealth grouping, the Organisation of Islamic Cooperation (OIC) and the Non-Aligned Movement (NAM). All these will make things more easier for Malaysians and Malaysian companies to explore the huge potential and making the right decision to do business in Africa.

He said Africa was endowed with huge arable and fertile land for agriculture, water resources, rich in biodiversity, hydropower potential, metals and mineral reserves, such as gold, silver, zinc, titanium, chromium, platinum, diamond, copper, tin, iron ore, cobalt, coal, bauxite, tantalum, coltan, uranium, tungsten, besides untapped oil and gas deposits. 

According to United Nations, Africa is home to some 30 per cent of the world’s mineral reserves, eight per cent of the world’s natural gas and 12 per cent of the world’s oil reserves.  The continent has 40 per cent of the world’s gold and up to 90 per cent of its chromium and platinum. The largest reserves of cobalt, diamonds, platinum and uranium in the world are in Africa. It holds 65 per cent of the world’s arable land and 10 per cent of the planet’s internal renewable fresh water source.

The ambassador further said that, Africa has cheap labour force, a highly educated and skilled young workforce and a growing middle class who have the means to purchase new products offered in the market such as cars and other vehicles, electronic and electrical gadgets and new real estate properties.

Abukar Abdi pointed out that while Africa has all these resources and potential, Malaysia has financial resources, technology and the know-how as well as huge experiences in industrial development which if matched properly with Africa’s needs and resources, could result in a win-win situation for both sides.

Citing few fine examples, he said Malaysian companies, in the plantation sector could invest in the rubber and palm oil sector, cultivation and production of food crops like corn, cotton growing, garment and textile industries, rice cultivation, food processing, floriculture, livestock industry, agro based industry, fisheries, renewable energy and others.

He cited how Somalia which has the longest coastline in Africa has recently signed fisheries agreements with 30 Chinese companies. On the same note, Abukar Abdi pointed out that in Somalia, only less than one million hectare of fertile land has been cultivated out of the 15 million hectare of fertile land available in the country.

One important area where African countries are still lacking since the independence era – is to provide value addition in the agribusiness sector which could help to lift the living standards of millions of Africans and in this context Malaysian companies could invest in value added industries.

In infrastructure development, can develop affordable housing, build highways and roads, develop ports and airports and manufacturing plants.

“Malaysian national car companies can explore the opportunity to set up plants there, he pointed out.

In recent years, multinational vehicle manufacturers have successfully set up production plants in Africa.

Africa with some 1.3 billion people today has a growing consumer market. It is estimated that Africa has some 170 million people of middle-class category. 

Abukar Abdi said with a growing middle class more and more Africans are travelling, the Malaysian aviation industry should grab this opportunity by exploring the possibility of starting direct flights to African cities from Kuala Lumpur.

He also pointed out that despite negative reports about Africa in the Western media from time to time, the reality is far from that. Today many African countries are more politically stable with governments being democratically elected.

” I would like to advise the Malaysian business community… to visit Africa and explore what it offers, not just tourism attraction but also trade and investment opportunities,” he said.

“We welcome the Malaysian public and private companies with open arms,” he said adding that most African countries offer simple and easy system to attract foreign investors.

Abukar Abdi explained that most Malaysian products and goods to Africa like palm oil are exported through third countries due to lack of direct business or trade ties. This is not favourable in term of cost and this situation could be tackled, if Malaysian companies take a deep interest in Africa and increase their trade with the continent.

He said Malaysian businessmen also can benefit from the African Continental Free Trade Area (AfCFTA) Agreement – the largest free trade area in the world considering the number of countries participating. AfCFTA connects 1.3 billion people across African countries with a combined Gross Domestic Product (GDP) valued at US$3.4 trillion.

“Africa-Malaysia relations have yielded tremendous results. Over the years, particularly during the pre-covid era, both sides witnessed the exchanges of high level visits, a boost in trade and economic cooperation, cooperation in education etc.

“There have been minor issues which have been tackled administratively. However, despite minor setbacks, as I indicated earlier cooperation between Africa and Malaysia has been favourable and we are hoping that the coming years will yield much greater cooperation in various sectors,” he said.

Source: Bernama