A climber with no support save his chalky hands hangs onto a cliff overlooking a
raging ocean; perhaps it is not the image that inspires confidence, but it is
one the Israel Export and International Cooperation Institute (IEICI) chose as a
metaphor in its presentation on investing in Africa last Thursday in Tel
Yes it’s dangerous, said Shauli Katznelson, deputy director-general
for economics at the IEICI, but this extreme climber will survive because he has
planned every move ahead of time.
Fear of falling to a horrible death
aside, the IEICI convened its Africa conference on the observation that Africa
holds the key to long-term investment success.
While markets like India
and China are already maturing, it is the so-called “dark continent” that holds
potential further down the line.
“There’s been a change in the nature of
Israel’s involvement in Africa from the economic side. It’s less development and
more economic interest,” said Irit Ben Abba, deputy director-general of the
Foreign Ministry’s economic division.
According to Ofer Sachs, the CEO of
IEICI, Israeli exports to Africa have grown 250 percent over the past decade.
Yet difficulties remain: On a continent that houses 54 countries, more than
1,000 languages and three times as many ethnicities, Israel has just 10
embassies and only one foreigntrade office.
So why, with all the
difficulties, political instability, lack of development, conflict and
potentially explosive demographics should Israeli business look to Africa? Two
primary reasons are salient. One is that Africa has 40% of the world’s arable
land, yet only utilizes 10% of it. Another is that Israel has strong expertise
in the very areas that Africa needs the most: agriculture, food, water
sustainability and clean energy.
“We are ready to go a long way with
Israel,” said Henri Etoundi Essomba, Cameroon’s ambassador to Israel. Africa’s
economic growth over the past few years has been second only to Asia’s, he said,
adding: “We expect the Israeli community to be more aggressive.”
the major problems Israeli companies face is obtaining credit for projects in
“There’s room for at least $2 billion in projects,” said Eli
Avidar, president of the Israel-Africa Chamber of Commerce. ASHRA, the Israel
Export Insurance Corporation Ltd., which insures export credit transactions, has
little stomach for such projects, he said.
One avenue of financing
Israelis may turn to is the International Finance Corporation (IFC), the
private-sector arm of the World Bank, which invested nearly $15.5 billion
worldwide in 2012.
“IFC considers Africa its top priority today,” said
Oscar Chemerinski, the director of Africa and Latin America manufacturing,
agribusiness and services at the IFC’s Western Europe division.
IFC has helped Israeli companies fund investments in other regions, it has yet
to find a good fit for Africa.
“We traditionally finance investment
projects,” said Paula Alayo, the IFC country coordinator for Israel, currently
on one of her quarterly visits to find investment projects.
companies that would have interest in Africa, she said, provide services that
other companies hire out instead of investing in their own projects.
may be changing, however, Alayo said.
“We’re beginning to see a shift,”
The fact that a business conference on Africa could fill the
seats of the Dan Tel Aviv Hotel’s King David room with business people and
investors, a feat that would strain credulity just a few years ago, demonstrates
a step in the right direction.