Stockholm (NordSIP) – Africa as a possibility for Danish investors with the right competences and a good dose of risk appetite is a win-win proposition for both the African continent and Danish business. Such was the theme of a conference held in Axelborg, Denmark last week (September 13) featuring DK development minister Ulla Tørnæs (Venstre Party), Agriculture & Food Dpt. Managing Director Karen Hækkerup, National Church Aid General Secretary Brigitte Qvist-Sørensen and Danske Rederier (Danish Shipping) Managing Director Anne H. Stephenson.
With the combined economy of sub-Saharan Africa predicted by the IMF to grow 5% annually until 2020, and a corresponding doubling of the economy over just 14 years, economic growth in Africa should go hand in hand with the achievement of the UNDP SDGs. The private investment sector is therefore a determining force in combining positive development impact with healthy results on the bottom line for both Danes and Africans, the participants argued. Concurrently, the African population is set to double from 1.2bn to 2.5bn in 2050, representing a substantial challenge for both Africa and Europe.
Denmark, which topped the Center for Global Development’s Commitment to Development Index 2017 by providing 0.75% of national income to development issues and ranking first on security and aid and in the top three for finance and trade, recently launched a new development and humanitarian strategy under the current coalition government focused on sustainable development and enhanced partnership between development organisations and the private sector to address this challenge. In addition, efforts to secure more investments and trade with Africa are well underway, as testified by the launch last year of the “Landbrugsinvesteringsfonden for Udviklingslande (IFU)” (the Agricultural Investment Fund for Developing Countries), and the launch last month of the Africa Infrastructure Fund by Danish pension funds PKA, PensionDanmark and Lægernes Pension to be managed A.P. Møller Holdings.
The participants also explained how Danish investment is already well and present in African markets. The Danish food industry exported DKK 2.3bn’s worth to Africa in 2016, while Danish Shipping exported for over DKK 16bn’s worth. Both sectors, combined with cleantech, will be centre stage when H.M. Queen Magrethe II visits Ghana on a state visit accompanied by a business delegation in November intended to strengthen the partnership between Danish and Ghanaian business and highlight the investment possibilities throughout Africa. As NordSIP has reported, Denmark earlier this year also committed a roughly USD 145mn investment over five years to the Kenyan market, with half the funding going to sustainable development projects, representing broader Danish development and foreign policy.
Such cooperation, the participants underlined, should benefit African countries in equal measure, contributing to building networks among African regions and integrating them completely in the global economy. Without new possibilities brought about by investment and local capacity building, the continent’s economic growth would hardly be sustainable, risking a more foreclosed African market in the longer run and the loss of Africa’s resourceful youth to lethargy and migration. The participants pointed towards the local benefits of improved milk production in Kenya and Ethiopia or more effective terminal in Ghana as a result of improved income possibilities through the creation of new markets and new value chains by Danish companies. Arla Foods, for instance, enhances local milk production clearing the path to a formal market for local milk producers in Nigeria while Aller Aqua works together with fishermen to create more jobs.
Meanwhile, questions are being raised about the lack of financing for Denmark’s “green national accounting” (grønne nationalregnskab) in the government’s proposal for the next finance law, issued late last month. Green national accounting was launched only in April of this year following a grant of DKK 4.5mn annually to Danmarks Statistik to develop it between 2015 and 2017, and is intended to collect data on the environment and natural resources in the effort to demonstrate correlations between the economy and the environment. The lack of financing suggests large parts of the database, including official environmental expenditures and income, environmental subsidies, and evaluation of natural resources such as oil and gas, will not be updated in the future.
This is a bad decision, according to finance spokesperson Josephine Fock of the opposition party Alternativet. “It is hugely worrisome if the government wants to stop the funding. It gives the completely wrong impression,” she told Danish political magazine Altinget. “It is not useful if Statistik Danmark is unable to continue its work. If we do not continue this operation, we will have thrown money right out of the window.”
Other components of green national accounting are set to continue even if the government fails to find funding in its finance proposal. The EU stipulates that member states must account for parts of the green economy, and it is thus up to Danmarks Statistik to find the funds for its research in the proposed budget. “I don’t know if it’s money thrown out of the window,” said Kirsten Wismer, Director of Economic Statistics at DST. “We will still be able to use what we’ve done. But we might not obtain follow-up data.” Green accounting allowed Denmark to compare its results with other such green accounts in countries like Canada, Holland and Sweden, with Denmark now at the risk of falling short of its environmental intelligence gathering at the international level.
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