Transcription
Singapore-based firms continue to expand in Africa, expecting to see as much as double-digit returns. They say Africa offers long-term growth with its rapid urbanization and growing middle-income population. Nadira Zidi reports.
Two years after expanding into Nigeria, Singapore vitamins and supplements firm LAC Global is now entering Ghana and eyeing South Africa and Sagal. "There's an untapped market, uh, in, uh, in Africa right now because they really lack all these products. Uh, they have got products, but the credibility is, uh, is something that they are looking for right now. So we find that there is a gap, and it's very good for us to go into that market," says the firm.
Meanwhile, Singapore agricultural commodities firm Valenci International is looking at investing up to hundred million US in its Ivory Coast and Nigeria plants to decarbonize the cashew value chain in Africa. The continent produces a dominant share of the world's raw cashew nuts, with Côte d'Ivoire, Tanzania, and Nigeria at the forefront. "So today, the investment that we're putting up in Ivory Coast is expected to produce two things out of the raw cashew shells that we put in. One is the biochar itself, which can be used to make fertilizers, and the second is, uh, renewable energy, and that actually moves back into our circular ecosystem."
But Africa is not only attracting business from established players. Enterprise Singapore says it supported four times more new market entry projects in 2024 compared with 2020. Its subsidiary, Singapore Cooperation Enterprise, or SCE, also supported public sector collaboration projects with foreign governments. Since its formation, SCE has delivered 38 projects across 23 African countries in diverse areas spanning economic positioning studies, technical and vocational training, development, public services, and pension reforms.
He was speaking at the start of the 3-day Africa Singapore Business Forum. To date, Singapore has seven bilateral investment treaties with Africa, with the latest two being with Nigeria and Côte d'Ivoire. The Trade and Industry Ministry says the total trade in goods between Singapore and Nigeria reached more than $900 million in 2024. That's almost double compared to the year before. Meanwhile, total trade in goods between Singapore and Côte d'Ivoire reached $180 million in 2024. That's $40 million more compared to 2023. Talks on a bilateral investment treaty with Ghana are ongoing as well. A potential free trade agreement with the East African Community is also on the table as Singapore explores deeper ties with the region.
And for more, Rahul Gosh, director for Middle East and Africa at Enterprise Singapore, joins us now in studio to tell us more about the business opportunities for local companies in the region. Mr. Gosh, welcome to Singapore Tonight. So, the 8th edition of the Africa Singapore Business Forum, uh, it drew a very good response. We're looking at about 600 business and government leaders from over 30 countries, uh, participated. So, tell us more about the business sentiments at the forum. What were the participants most excited about?
"Thank you for having me. Uh, so the Africa Singapore Business Forum is a platform for business exchange and thought leadership between Africa, Singapore, and Southeast Asia. Uh, this forum is unique because it's the first time that we had a sitting African president address the audience. President John Mahama from Ghana addressed the audience. We had 14 foreign ministers from Africa in attendance as well, which is a record."
"And we organized more than 200 B2B meetings between, uh, Singapore companies and African companies to discuss potential partnerships to take on, uh, the opportunities that the African continent presents. And from those meetings, we understand that, uh, there's a lot of, uh, potential for collaboration because, uh, Singapore companies and the products and services that they provide are very well regarded in Africa. So, so there is a pull, and we'd like to build on the momentum that we've seen from this forum."
Speaking of collaboration, uh, we heard from Nadira's story earlier that there were four times more market entry projects in 2024 compared with 2020. Um, tell us, what is the current level of business relations between Singapore and Africa now, and how are Singapore companies tapping opportunities in Africa?
"So today, there are more than 100 companies from Singapore that are operating across 40 African countries, and, uh, our investment stock is about 27 billion Singapore dollars, and that makes us the eighth largest investor on the continent. So, so we're in a good place, and we have a launchpad where we can take it forward even more. Now, the sectors that companies are operating in is broad. It's wholesale trade, agri-business, manufacturing, infrastructure, uh, the digital economy, and the new one is the green economy."
That's quite a spread of sectors, right? And you also said that the African continent markets hold a lot of untapped, uh, business potential. So what kind of business opportunities are there for Singapore companies?
"Well, first thing is that Singapore companies need to look beyond the traditional markets of Southeast Asia and Asia, and Africa is a new frontier. Now, the opportunities, I would say, are actually quite similar to Southeast Asia. So the drivers would be industrialization, the need for infrastructure, uh, digitalization, the green economy, and so on. So very, very similar to what companies are used to seeing here. And for any Singapore company that has operated and done well in Southeast Asia, Africa is quite an easy market. Now, going back to the point of, uh, African companies wanting to collaborate with Singaporean companies, that makes it even easier for them to be able to land and scale in on the continent."
Talk to us also about the unique characteristics of African markets. What may be the initial challenges for Singapore companies wanting to do business or invest in Africa?
"Well, it's 54 countries. So, so the first question that Singapore companies ask us is, where do we start? And the advice is, um, invest the time to, uh, understand the nuances of each market and take the time to visit each market. It's important to, to see. And the second would be the lack of quality data. Uh, so we have three offices as Enterprise Singapore on the continent, and we can help companies navigate the complexities. And the third is, uh, in the space of, you know, uh, certainty. So there are, uh, many African countries that have suffered currency volatility, high inflation. Uh, there are sometimes taxes that are introduced without notice. So some of those uncertainties means that companies must factor into their margins, uh, a higher price to account for these risks."
In tackling these risks or challenges, how does Enterprise Singapore then make it easier for Singapore companies to venture into Africa?
"So we have three offices on the continent, and, uh, those offices have a network of relationships. We understand, uh, the markets, the sectors, and we share those quite often with companies through awareness activities. But also partner with, uh, our TACs to bring companies to the continent. And more importantly, it is, uh, finding the right partners. So we have the relationships to allow for that."
All right, Mr. Gosh, uh, we appreciate your perspectives. Thank you so much for coming in tonight. That was Rahul Gosh from Enterprise Singapore.