Reticent Chief Executive Officer of Engineers and Planners, Mr Ibrahim Mahama has for the first time open up on the challenges facing African economies, blaming the sordid situation on ?capital flight?, saying ?no money stays in Africa.?
According to the business mogul, apart from the wage bill swallowing a chunk of the internally generated funds of many African countries, the rest are repatriated to foreign countries by their companies operating on the continent.
He, therefore, cautioned that if the continent did not come up with action-oriented strategies towards harnessing its resources for self-growth and prosperity, the consequences in future could be dreadful.
The 46-year old brother of President John DramaniMahama made the thought provoking assertion on Africa at a round table retreat organized by the Afri Exim Bank in Dubai in the United Arab Emirates.
The Afri Exim bank is the financial institution that recently advanced Ibrahim Mahama?sEngineers &Planners mining and construction company US$60 million to pay back a US $28 million loan the company owed Merchant bank.
Taking colleague participants and the media through what was said to be an inspiring speech on challenges confronting many African economies, Mr Ibrahim stated that one other difficultymilitating against the growth and self-sufficiency of the continent was lack of access to needed financial resources.
He said, for example, that there had been instances when African entrepreneurs had come up with viable business proposals but are unable to actualize them because they are unable raise the needed capital.
?If we are looking to build African champions, we need to move on the ground and see what and where the financing is really needed,? he noted.
The young Ghanaian business entrepreneur saidit was regrettable that, when investment opportunities open up in Africa, the politicians always told the local investor that they don?t qualify because they are not capable of getting the needed funding.
There were times, he said, when he had projects but was not successful in obtaining funding from local banks, adding that it would have been impossible for 10 local banks to pool resources to raise the needed funding.
?And sometimes when you look at the project, it will only cost $200 million, but if it is, being given to a foreigner, it will cost the country a billion dollars,? he asserted.
He was of the opinion that it should be possible for local banks to pool resources in helping local businesses raise the needed funding for the development of the continent, without fear of having the accrued profits been repatriated.
That, Mr Ibrahim observed, would build the capacity of local industries and ensure that resources generated provided the maximum cushioning for those with lucrative ideas but inadequate resources.
Africa, he said, was gradually being shipped away in bits by foreign interests, without the opportunity to negotiate, and wondered where the continent might have gone wrong.
?Where we went wrong is that we don?t have access to capital. Africa needs capital and the problem of Africa is within us,? he said.
MrMahama said there were huge gold deposits in Guinea, for instance, but that resource had been given out to foreigners and suggested that it would be good for Africa?s entrepreneurs to team up to mine the resource for the benefit of their people, instead of the present arrangement where the profits were repatriated overseas.
In prescribing a way forward, Mr Mahama
was of the view that more banks, such as the Afri Exim Bank which provided support for indigenous African businesses, were needed across the continent to effectively bridge the funding gap that existed for local entrepreneurs.
?We need more of the Afri Exim banks in Ghana to listen to local entrepreneurs and the projects they have,? he urged.
He recounted that as a young businessman with few resources, the various banks he did business with in Ghana lacked the capacity to provide him with the needed funding as his business
?But with determination, we stood the test and proved ourselves by ensuring that we delivered on our services,? he recounted.
He called for a re-think of the banking proposal system available to the private sector which quite often limited access to credit, no matter how viable a business model might seem.
Africa, he said, had higher returns and better profits than Europe but admitted that ?In Africa the challenges are many but the returns are much greater?.
Banks in Africa, he noted, did not go cross-border, thereby limiting the options available to a local investor in another African country.