As managing director of Goldman Sachs‘ South African office, Colin Coleman has witnessed, and advised, the execution of countless business contracts across Africa. Each deal — from China’s US$9 billion copper deal with the Congo to Walmart’s US$2.4 billion purchase of South African retailer Massmart — highlights the tenuous balance between domestic interests and foreign investment, and raises a set of key questions.
“How do you create a balance of domestic interests in Africa and the interests of globalization?” Coleman asked. “How do you create a balance of interests between the emerging markets and the developed world? Within emerging markets, how does Africa protect its place in an appropriate way?”
These questions become more pressing as Africa’s economy grows and investors take notice. Africa today has 1.2 billion people, a US$1.8 trillion economy and real GDP growth of about 5.5% in 2011, Coleman pointed out. “When you look at the statistics, the fact is that Africa as a whole … is a significant contributor. It has a GDP that compares with any one of the BRICs.”
Such questions led Coleman to wonder: Should Africa create a code for foreign direct investment (FDI) that would guide non-African investors as they increasingly seek out opportunities in Africa’s growing markets? “Is there a case for an ‘FDI in Africa code of conduct’ that should be thought about, articulated, marketed, popularized, bought into and owned by investors, countries, and communities alike?” Read more.