Diverse Countries And Common Goals

H.E. Thomas Boni Yayi is former President of the Republic of Benin and served as a key ambassador between Equatorial Guinea and the Arab world. The following is an article from the former President on the importance of strengthening relations between Equatorial Guinea and Saudi Arabia.

 

The Equatorial Guinea-Saudi Arabia Economic Forum is of great strategic importance to the mission of furthering the economic and diplomatic relations between the Middle East and Africa. As a former president of the African Union, I am personally very pleased to see this event take place shortly after the Africa-Arab Summit held in Malabo just a few months ago. The purpose of the Africa-Arab Summit in November was to work together for sustainable development and economic cooperation. Forums such as this one will be a cornerstone of making that goal a reality.

 

The leaders of the Fourth Arab-Africa Summit laid the groundwork for such a reality while in Malabo, establishing the Malabo Declaration to outline future areas of cooperation and also creating the Africa-Arab Cooperation Action Plan 2017-2021. That detailed plan complements the already well-established Africa-Arab partnership that has existed for decades. I want to offer my esteemed congratulations to the Africa-Arab partnership, which celebrates its 40th anniversary this year.

 

I was chairman of the African Union during the 3rd Africa-Arab Summit that took place in Kuwait in 2013, and I can say with confidence that the friendship and cooperation between Africa and the Middle East has grown so much just in the last few years. I am certain that it will continue to thrive in the future, as there is no question that building strong Arab-African relations is vitally important.

 

To begin with, the regions are close geographic neighbors, sharing borders both on land and at sea, as well as trade routes. Efficient development of both Africa and the Middle East depends on mutual cooperation. The Arab and African worlds, while each very diverse, also share a range of commonalities — from religion to similar economic opportunities. We also share many of the same challenges, including poverty and a need to combat the evil forces of terrorism and violence that threaten our societies. Working together, we can use each other’s strengths to address our weaknesses. So we have come together today to continue to seek these strengths, and improve our cooperation.

 

The opportunities for partnerships are vast, and range from knowledge-transfer and trade to the flow of the financial markets. Despite the wealth of investment options, the trade flows between Saudi Arabia and many Sub-Saharan Africa has been quite limited. We are here today to build upon this with the sincere hope that we begin to witness more Saudi Arabian companies invest in Equatorial Guinea and other countries throughout Africa. Saudi investment on the continent lags far behind other competitors, such as the USA, France and China. But with so many emerging opportunities in the sectors that many Saudi companies excel — such as technology, energy, and oil and gas — as well as emerging sectors in Equatorial Guinea that are vitally important to Saudi Arabia’s independence — such as agriculture, water and fisheries — I see great potential for the future of Saudi-African economic relations.

 

Of course, policy and bilateral cooperation has an incredibly important role to play in increasing the private sector cooperation and investment between Saudi Arabia and Equatorial Guinea. Trade agreements, taxation policies, financial flows, visa regimes, etc. are all driven by government policy. The best deals will be reached through bilateral cooperation, and the importance of governments playing their part in this process cannot be understated. Creating strong relationships between governments is the foundation for bilateral economic success. Seeing so many committed government officials from both Equatorial Guinea and Saudi Arabia here today with a common goal — to create a friendly political and economic environment between the two countries — is certainly encouraging.

 

Politically, Saudi Arabia and Equatorial Guinea also share a powerful vision: to create a peaceful, stable and continuous government which enable business and culture to prosper. This common aim of the two countries will assist in the development of the bilateral relationship.

 

Already, the two sides have made important steps in this regard. President Teodoro Obiang Nguema Mbasogo of Republic of Equatorial Guinea met with Riyadh-Custodian of the Two Holy Mosques King Salman bin Abdulaziz in October 2016 in Riyadh. That meeting, which included key officials from both sides laid the groundwork for further developing the ties between the two countries. That meeting has been followed up by exchanging diplomatic visits, and Malabo’s crucial role in hosting the Arab-Africa Summit this year.

 

Equatorial Guinea’s Ministry of Mines and Hydrocarbons H.E. Gabriel Mbaga Obiang also announced in the beginning of 2017 the country’s desire to join the Organization of Petroleum Exporting Countries. As prominent oil and gas exporters on the global stage, both Equatorial Guinea and Saudi Arabia share a common goal of stabilizing the global oil markets. Already committed to working in tandem on this issue, Equatorial Guinea was one of 10 non-OPEC member countries which committed to cutting its own oil production in the interest of the overall market success. And as Sub-Saharan Africa’s third largest oil producer, there are several oil and gas projects of relevance to Arab investors in all facets of the energy sector, including storage, gas exports, petrochemicals and compressed natural gas. Equatorial Guinea just completed its fourth oil and gas licensing round and can be proud of exploration successes which are the envy the world throughout. Saudi Arabia has been unquestionably a global oil industry leader for decades. Its leadership in OPEC and in the petroleum markets provides critical support and guidance to the sector.

 

Oil and gas is certainly a common economic sector for Saudi Arabia and Equatorial Guinea, and has great potential for collaboration. But it is not the only area with which the countries can come together.

 

Similar to Saudi Arabia when it first began exporting oil, Equatorial Guinea is currently economically dependent on the oil and gas sector. Saudi Arabia, however, leveraged its oil and gas resources to diversify the country’s economy, especially in the downstream sectors. Though still the world’s largest exporter of crude oil, Saudi Arabia is also heavily involved in the petroleum refining and the development of petrochemicals and fertilizers, in addition to construction and technology. Now, as Equatorial Guinea seeks to diversify its own economy, it can look to Saudi Arabia as a role model and its contemporaries in the Kingdom for partnerships.

 

Vital to this economic diversification, Saudi Arabia also boasts a well-established financial sector. Similar to many nations in Sub-Saharan Africa, Equatorial Guinea still has work to do in creating this strong financial sector. This is another key area in which Saudi Arabia and Equatorial Guinea can collaborate.

 

Additionally, Islamic financing, which has already been highly successful in other parts of the world, can easily find a new home in Africa. Kenya, Senegal and South Africa have already opened the door to this new flow of liquidity, and other African nations could easily follow. The additional capital will make it possible for key energy and infrastructure projects to move forward. The energy industry alone in Sub-Saharan Africa requires approximately $30 billion in annual investment. Equatorial Guinea, which is investing in roads, ports, airports, power generation and other infrastructure projects, is seeking international investors to back these projects.

 

And as Equatorial Guinea and other African economies seek to diversify, other areas of economic interest are also expanding, and importantly also include: agriculture, aquaculture, forestry and the development of human capital.

 

Many of these sectors are especially relevant to Saudi Arabia. Food and water security in the desert region is a grave concern, and requires thoughtful innovation, forward thinking and the formation of close ties with international partners in order to meet the agriculture needs of the country. Most of Saudi Arabia’s cereal and red meats are already imported, and by 2050, predictions indicate the country will be importing the majority of its agricultural needs. As Equatorial Guinea further develops its agricultural, fishery and water sectors, Saudi companies have the unique chance to become involved at the initial planning and development stage and become essential stakeholders.

 

As development in Africa continues, many countries on the continent are seeking two primary things from the international community to boost private sector development: investment and knowledge-transfer. Arab countries can provide for both of these needs when they invest in local opportunities.

 

In fact, many Arab companies throughout the Gulf region have become global leaders in these fields, and investment from Arab countries has already taken shape throughout the African continent in a variety of sectors, providing a clear roadmap for success. Bin Laden Group has successfully built airports and roads on the continent; DP World and Agility of Kuwait are tackling ports and terminals, and Saudi Arabia’s ACWA is investing in power generation capacity. Africa, often seen as one of the few remaining frontier markets, is on the radar of Arab countries for its wealth of opportunities for interested investors.

 

But while Africa is flush with natural resources, unfortunately the continent as a whole has largely underdeveloped industrial and manufacturing sectors. African exports are primarily comprised of raw materials, such as crude oil, minerals, diamonds and the like. However, as the manufacturing, industrialization, agriculture and tech industries continue to grow in Africa, and as governments continue building bilateral relationships and mutually beneficial trade agreements, we can expect African participation in the trade flows to increase. For Saudi Arabian investors, this is the moment to take place in the economic transformation on the African continent. And Equatorial Guinea provides a truly unique platform for investors to get involved. The country boasts political stability, adheres to international standards for conducting business and is open to investment.

 

Saudi Arabia and Equatorial Guinea, while at different stages of economic development, have perfectly opposing needs and opportunities, and the two countries are well-positioned politically and economically to succeed in their endeavor of cooperation. Their common experiences in oil and gas and a shared political vision combines with these opposing needs: with the ability for Saudi Arabia to provide key development aid and investment in Equatorial Guinea; and Equatorial Guinea’s ability to supplement agricultural and other export need in Saudi Arabia. This foundation creates a clear path for Equatorial Guinea and Saudi Arabia to work together to achieve sustainable economic and diplomatic success at all levels. The opportunity for two countries to join together also represents an opportunity for the broader development of Africa-Arab relations.

 

As a former Chairman of the African Union and former President of Benin, I know that creating an environment for international cooperation is not easy. In fact, building these ties takes time and continuous, focused effort. But the rewards for both Equatorial Guinea and Saudi Arabia are within reach. Building the foundation for these international ties will start with the discussions you have here today — from one CEO to another, from one Minister to another, and from one country to another. The conversations started here today will lead to the creation of a better Africa and a better Saudi Arabia as both the private and public sectors from across the globe unite to create something truly remarkable: sustainable social, political and economic development.