Singapore Emphasizes ‘Open Regionalism’ to Boost Africa-Singapore Business
On 29 August 2023, during the opening ceremony of the 6th Africa-Singapore Business Forum (#ASBF2023), Singaporean Minister of Trade and Industry (MTIsg) Mr GAN Kim Yong expressed the wish to build ‘stronger and deeper’ Africa-Singapore bonds.
Enterprise Singapore initiated the #ASBF in 2010 and the event gathers business leaders and policy makers every two years. For the 6th edition, 14 African countries sent delegations to the Forum.
Drawing parallels between the ASEAN Economic Community and the African Single Market enabled by the #AfCFTA, he underscored the promise that these two huge regional markets could bring. Both South-East Asia and Africa are growing by leaps and bounds. Together, the TOP10 #ASEAN economies have a combined GDP of USD 3.7 trillion, which is close to that of the African continent and India.
By ‘Open Regionalism’, ASEAN member states stand to benefit from trade and investment outside their immediate neighborhood. For example, the Regional Comprehensive Economic Partnership (#RCEP) is an #FTA which extends beyond ASEAN to include Australia, New Zealand, South Korea, Japan and China.
The potential for trade between AfCFTA and ASEAN is immense and largely unexploited. In 2021, Africa-ASEAN trade amounted to only USD 58 billion and represented a mere 2.2% of global trade. Similarly, #FDI from Africa into ASEAN is still very low at only USD 188 million in 2021, or 0.1% of the USD 174 billion of the total #FDI into ASEAN.
On the other hand, more and more Singapore businesses are venturing into Africa. Based on incomplete statistics, there are more than 100 Singapore companies which have invested and are operating in Africa. They cover a multitude of sectors from manufacturing, logistics, agribusiness and #SmartCities. To date, the cumulative #ODI from Singapore into Africa exceeds USD 23 billion.
One of the success stories is Royal Nuts Singapore which invested USD 27 million in an agribusiness project to process cashew nuts in Cote d’Ivoire. In support of digitalization and application of innovation, Thunes provides cross-border payment solutions. According to some estimates, the #DigitalEconomy of Africa will explode by six-fold by 2050 through opportunities in #FinTech, #EdTech, #HealthTech and #eCommerce.
Three Singaporean companies Robust International, Adatos and Trames are collaborating to bring innovation to the field of agribusiness in Africa. Thus, Adatos will deploy its #AI solutions to better manage farms with insights in yield optimization, nutrients dosage and weather prediction for sesame farms in Nigeria. Robust International is a well-established global commodities trader which will leverage the bespoke logistics management solutions of Trames to boost the export of agricultural produce out of Africa.
In Ghana, GenZero has partnered with AJA Climate Solutions to work towards #NetZero and contribute to the fight against #ClimateChange. Through the system of #CarbonCredit, GenZero has raised some USD 30 million to assist in the restoration of degraded and deforested areas in Kwahu.
Singapore is a world-renowned global business and financial hub and Cartrack, an African multinational offering vehicle data and fleet management services, has decided to leverage the Singapore #IFC. Due to the favorable environment in Singapore, Cartrack has decided to set up its ‘control tower’ function in the Garden State.
On 20 August 2023, the Kenya-Singapore Investment Promotion and Protection Agreement (#IPPA) entered into effect giving investors more certainty and confidence while using the Singapore-Africa axis.
The Singaporean government plans to enhance the capacity of African countries under the Singapore Cooperation Program with the targeted Singapore-Africa Partnership Package. The #CapacityBuilding program is intended for African trade officials and will certainly assist to consolidate ties and boost trade between the two regions.
As a sign of the importance that Africa holds for Singapore, Singaporean PM LEE Hsien Loong has undertaken official visits to Rwanda, Kenya and South Africa over the past 12 months. In order to reap full benefits from the global business, Singapore advocates ‘Open Regionalism’, whereby countries integrate to gain scale to compete globally, but stay open and connected to other countries and blocs, without having to pick sides.