SWEDEN RISKS BEING LEFT BEHIND IN AFRICA - once lauded strategy, now stuck in the past

open | 04 June, 2013

The Swedish government's new-found interest in doing business with Africa is a very welcome return to the continent after years of top-level ignorance.

But the thinking is stuck in the past. Trade between Sweden and Africa has not increased in line with Africa's economic growth.

The way forward is to promote transparent trade and vibrant connections armed with inventions and innovations and working with Africans.

This can be done through funding of business news reporting, non-existent today due to media's own structural crisis. And to hook up Sweden's acclaimed internet entrepreneurs with Africa's own success story, writes business consultant Roger Hällhag and international media advisor Christer L Pettersson in this Opinion-Editorial published in Gothenburg Post.

Five Swedish ministers have just returned home from the World Economic Forum in Cape Town and the largest Government trek ever, on a ministerial level, to Africa. Ethiopia, Nigeria, Angola and Zimbabwe were also included. The aim, according to Foreign Minister Carl Bildt (Swedish Conservative Party Moderaterna, M), was to show that Sweden takes Africa seriously by "broadening the image of Africa at home and (...) broaden our cooperation." And Finance Minister Anders Borg (M) wants to see more investment in Africa by the Swedish pension funds - with expected higher yields than at home.

So the Swedish government has finally woken up to the fact that Africa is no aid junkie but a future market where seven African countries are growing faster than China.

Ministers are however glossing over the cracks when they say that business is growing steadily. The stark reality is that Swedish trade with Africa does not increase in line with overall growth in Africa and when ongoing deals, such as Sweden's export of jet fighter to South Africa are weeded out, we can expect a drop coming years.

Thus a need to improve relations in Africa dramatically. We can not expect Africa be too be head-over--heels about this. Africa has moved ahead - its business has exploded with other emerging markets, especially China and India.

Modest trade with Africa
India's trade with Africa was SEK 6.5 billion in 1995 compared with 2012 when it had shot up to SEK 420 billion - and where Africa's exports accounted for the lion share. Sweden's exports to Africa in 2012 was SEK 36 billion, the value of imports only 12.5 billion. Indian investment in the continent is now above SEK 300 billion or 2.7 percent of its GDP. Swedish investment in Africa is 30 billion krona 0.8 percent of our GDP.

Another striking indicator: The number of Swedish travellers to South Africa―the hub of the region―increased by five percent in 2012 to 41,000. This is considerable and most travellers are business people. Visitors to South Africa from the world's emerging economies increased by lightning speed 2011-12: China up 57 percent to 132 000, India up 18 percent to 106 000 and Brazil up 45 per cent to 78, 000. These countries hardly filled an airplane together in 1994!

Sweden needs Africa
It is Sweden, which now needs Africa. Therefore for the ministers'  African safari to turn into action a radically new approach is required to meet challenging new circumstances. Sweden still has some deposits of good-will in Africa. By being a partner to rely on, we can offer alternatives to colonial and neo-colonial ties. Poverty is still a strong reality. Development assistance is therefore not only necessary but its role is playing out on centre stage.

But our institutional make-up is stuck in the past. Sweden Inc. needs to dramatically increase understanding and respect for Africa, build new networks and, not least, open up the Swedish government and approved agencies for more competition and be open to new ideas.

Knowledge  Reporting of Swedish or business aid in Africa by independent business correspondents leaves much to be desired. Greater efforts are needed in order to build public, entrepreneurial interest in the area, creating role models - the global flow of news is insufficient. We propose to set up a fund for finance reporting of Africa for both public service and private media, which can later be applied to other merging markets. Sweden must build interest so as to not be condemned by its own history.

Networking  Internet technology is Sweden's newest competitive niche in a rapidly globalising world, but Swedish internet partnership in Africa is rare, as Swedish internet entrepreneurs are not present. Support intensive lobbying where direct qualitative contacts are evident can flourish with Africa.

Challenge the institutions  New competition, both commercial and non-commercial, is needed to challenge Swedish Government-Commerce agency Business Sweden (formerly Swedish Trade Council). We propose to set up a good-sized independent innovation fund outside the institutions of Swedish entrepreneurship in new tech and Internet ventures with Africa.

Dramatic increase
Sweden already funds, through development aid and finance, some excellent network projects in Africa through the United Nations, amongst others. But Sweden needs to push to further these same efforts on the home front. Business information and networking must increase dramatically, and investors must be prepared to increase risk exposure.

Otherwise, the Swedish government's new interest in Africa will be firmly stuck in old habits and the five minister's high profile trip to Africa will then only be for domestic political consumption.

Roger Hällhag. Business consultant, Rud Pedersen Public Affairs Consultancy, former foreign adviser in the Swedish Prime Minister's office,  former chairman of the Isolate South Africa Committee.

Christer L Pettersson. Global Affairs Editor A-scan, international media adviser, former Africa correspondent for Dagens Industri and Dagens Nyheter.

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