For Africa to attract serious, long-term investors who are going to build new businesses, governments need to ensure competitively priced reliable energy and telecommunications, as well as labour regulations that make it easy to employ workers, said Brenthurst Foundation research director Ray Hartley.

The Brenthurst Foundation has developed an investment protocol with the aim of guiding governments competing for investment capital. Hartley said in an exclusive interview with Polity, that the aim must be to reduce the “frictional costs” that deter investors such as too much regulation, policy uncertainty and overly-prescriptive rules about the repatriation of profits.

“Many African countries lack deep statistical information that gives potential investors certainty about the environment they are entering,” he said.

Hartley added that bolstering independent statistical agencies for a solid data base is vital and gives investors more comfort compared with subjective statistics, which are not taken seriously.

“In addition, more independent agencies and academic institutions that provide reliable, independent assessments of the economy are vital,” cited Hartley.

Africa’s population is growing rapidly and urbanising at a very fast pace and as a result African cities require heavy investment in infrastructure for electricity, water, sanitation and communications to improve the quality of life for citizens.

Hartley stated that it is critical for investors to manufacture their products at scale for large markets. Africa has a large untapped market and its countries need to reduce the obstacles to accessing these markets by reviewing expensive tariffs, logistics costs and visas, he said.

While this presents an obvious opportunity, there is also the opportunity for Africa to leapfrog traditional industrial development and go straight into developing its technology-linked industries. He said to accomplish this, the modernisation of education and the opening up of Internet spectrum to competition is vital.

“The free trade agreement which integrates Africa’s markets is a step in the right direction, but large countries such as Nigeria still need to sign up and others need to honour their commitments by cutting the obstacles in the way of intra-African commerce,” he urged.