Roundup: Foreign firms scout for investment spots at UNCTAD Summit

Foreign companies and state-run investment promotion agencies have intensified their hunt for investors on the sidelines of the U.N. Conference on Trade and Development (UNCTAD), amid complaints that the investment climate in Africa remained unpredictable.

The foreign multinational firms -- the General Electric, a large American corporation with investments in aviation, manufacturing and energy, Chinese manufacturing firm, Gemsy, makers of textiles machinery, Swiss water firm, WaterLex, held talks with investors at various side-events attended by top executives.

UNCTAD Secretary-General Mukhisa Kituyi hailed the growing interest from foreign multinationals to invest in new fields, especially on the so-called "green field projects" in Africa.

The green field projects are those starting from scratch, including in oil fields and infrastructure.

Jay Ireland, President of General Electric Africa, who previously directed investments worth 120 billion U.S. dollars for GE subsidiaries, said massive investment opportunities in Africa existed, but the field was severely clouded by high risk and lack of consistent business regulations.

General Electric has investments in the production of locomotives in South Africa, power, aviation, oil and gas.

The Africa chief executive told a meeting of top CEOs in Nairobi Wednesday that more improvements on investment environment were required within Africa, to attract more investment.

"We require further investments. The key risk is political risk. The electoral cycle in Africa which leads to the changes of administration has not promoted the consistency of business laws and regulations. "Dialogue with the private sector is important," said Ireland.

Ireland, member of U.S. President Barack Obama's Advisory Council on Doing Business in Africa, said the GE was keen on building the locomotives with 60 percent of local content.

He said the investments made by the foreign multinationals in Africa should also promote development of new skills.

Kituyi said such investments are required to keep world trade afloat in the middle of declining foreign aid.

"We expect the private sector to plug this shortfall of 25 billion dollars Oversees Investment Assistance (ODA) through these Greenfield investments. We need to focus on dialogue that addresses optimal partnerships to finance this gap," Kituyi told a gathering of foreign and local investors.

Business analyst, Annie Roberts, said the risk assessment by New-York-based investors were mostly inaccurate and misleading.

"The investors misconceive risk in Africa. They think risk is too high while in actual sense, risk is much lower. The political situation like Kenya is more stable and the business environment facilitates investments," said Roberts, Partner at Open Capital Advisors, a Nairobi-based consulting firm.

Roberts said international financial institutions committed some 18.8 million dollars in Kenya towards investments in energy in recent months while private investors put in 2.4 million dollars worth of capital.

"Investors are looking for financial returns and social benefits. Some countries are attracting more investor interest than others. These provide a platform for neighbouring countries to equally attract investors," said Roberts. Endit