AFC invests in Gabon Special Economic Zone.
In its quest to drive investment, encourage enterprise and move up the value chain, the government of Gabon set up in 2010 Gabon Special Economic Zone (GSEZ), in partnership with the Singapore-based agri-business giant, Olam. The rationale was simple: to create diversified industrial hubs to diversify the economy and encourage manufacturing and processing.
The model had proved successful elsewhere. A key component of China's extraordinary growth had been the SEZs, which were used to push through market-oriented reforms, and later the establishment of open coastal cities.
In Gabon the rationale was similar. On a per capita basis it is one of the most prosperous African countries, but future growth and employment would have to come from elsewhere.
The oil sector, for example, employs less than 5,000 workers. Other raw materials were being exported in their raw form, most notably timber.
In Olam, it found a reliable partner who had a proven track record of successful project execution. Olam was looking to invest in rubber and palm oil plantations in the country. Together they conceived the plan of building SEZs centred around a number of strategic sectors.
The first project was the Nkok Special Economic Zone, which has been built 30km outside Libreville. Since then the scope of GSEZ has evolved to include other assets, and ultimately it is these large-scale infrastructure projects that were of particular interest to the AFC. Leading the negotiations on behalf of the AFC was Reuel Andrews, head of transportation: "The investment is appealing for many reasons. This is an infrastructure investment into a portfolio of transport and logistics infrastructure assets."
GSEZ had come in for some criticism from sceptics not long after its launch. The AFC investment, however, is a validation of its business model.
To date GSEZ has developed 550 hectares from the 1,126 concession it has been given. Part of the assets that the AFC is investing in is a 45ha mineral terminal, which is under construction, as well as an 18ha general cargo terminal. GSEZ is also building 65km of water pipelines that will service both commercial and industrial clients and is building a network of over 2,000km transmission lines which will service 300 rural villages.
The AFC investment will help accelerate the execution of the projects and will help to leverage more funding to take advantage of more opportunities in Gabon and across the CEMAC region. When asked about the investment horizon, Andrews said that the AFC was looking at a 7-10 year investment horizon -- enough time for the projects to be at an operational stage and to generate positive cash flows.
Last year, the government of Gabon became the 10th member state to join the AFC, which is looking to increase its footprint in 'rancophone Africa.
"This is an equity investment into a portfolio of transport and logistics infrastruc- ture assets."
[c] Copyright IC Publications 2016 Provided by SyndiGate Media Inc. ( Syndigate.info ).