Singapore’s government is actively encouraging its businesses to explore commercial opportunities in Africa, a region currently accounting for only about 1% of its total global trade.
“Some of our companies have already established themselves in Africa over the years in certain niche industries,” said Dr Koh Poh Koon, Singapore’s minister of state for trade and industry, at a session organised for African-focused media outlets.
He said although Singapore is a small country, there are some industries where its companies have significant experience. For example, the city-state sees itself as an expert in the area of urban planning, and wants to export this expertise to Africa.
“Singapore has limited land, so master planning for the long term is part of our psyche,” noted Dr Koh, highlighting a new town development in Tanzania promoted by Singaporean company Hyflux in conjunction with a local partner. The Star City project is expected to comprise an industrial/logistics park; residential areas and a university town.
Water solutions is another area of interest. “Our companies are pretty good in things like water technologies and water recycling. This was borne out of necessity because we were short of drinking water. Through research and innovation our companies have turned a limitation that we had into a huge opportunity. And today they are using this technology to compliment the needs of a growing sub-Saharan Africa by providing technology and services to recycle water and to also provide clean drinking water,” explained Dr Koh.
In transport and logistics, shipping company Pacific International Lines is already active throughout the continent, and, according to Dr Koh, port operator PSA International is eyeing opportunities to manage African ports. In the education sector, Singapore’s Institute of Technical Education (ITE) has already partnered with some African countries to improve vocational training.
Lessons for Africa
Singapore is globally seen as a development success story, having transformed itself from a poor country in the 1960s to one of the world’s most competitive economies.
According to Dr Koh, Singapore managed to industrialise by making it attractive for multinationals to set up shop in the country.
“In the early years when we became independent, I think we went through very much the same thinking process as African nations today – how do we create enough jobs for our people to give them a good income? So we went onto the industrialisation track. And one of the things we did was to bring in the multinational companies (MNCs) – making the economy open enough and attractive enough for them to be here. Because unless you yourself have all the necessary know-how to start all the industries by yourself, how can you begin to create all these jobs out of nowhere?
“When MNCs come in they create jobs, but they also create an ecosystem for other SMEs to support them… And when MNCs come, they also bring along the financial institutions, and then along the way you grow the financial sector. The banks want to be there where their customers are.”
Dr Koh stressed the importance of providing a favourable business environment for multinationals. “When you ask people to put in millions and millions of dollars in infrastructure, they want to have certainty and transparency. They want to know that you are not going to expropriate their investments through an unstable political system or corruption… The rule of law is very important, especially if you don’t have any investment treaties that you have signed with the home country of the MNC… If they cannot see transparency and certainty, they are not going to come.”
He also cautioned against having unrealistic development ambitions. “Some countries want to build high-tech industrial parks, because they are captured by the notion of high technology and innovation. But you got to ask yourself if you’ve got the workforce for that. You cannot go on the same bandwagon as someone else in a different phase of development.
“Smart city is a term that many people use. However, the question is: do you have the people with the level of education, the level of technological savviness? Is your entire ecosystem ready for smart technology? At the end of the day, the smart city and the smart technology must make life better for people. It must not increase the rich-and-poor divide. If everyone in the country doesn’t even have a computer, it means only the rich can use the smart technology and the smart services.”