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Transferring Thrust and Entrepreneurship into Africa: Singapore Signs Bilateral Agreements with Ethiopia, Mozambique, and Nigeria
By admin August 26, 2016

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Untitled(Photographer: Munshi Ahmed/Bloomberg)

Just two days ago on Wednesday August 24th, Singapore signed bilateral agreements with Ethiopia, Mozambique, and Nigeria at the Africa-Singapore Business Forum (ASBF) as Singapore looks for opportunities to strengthen economic relations with Africa. These agreements include the signing of the Avoidance of Double Taxation (DTA) with Ethiopia, a Bilateral Investment Treaty (BIT) with Mozambique, and an Air Services Agreement (ASA) with Nigeria. According to the Straits Times news article, the agreements between Singapore and Ethiopia, Mozambique, and Nigeria are expected to clarify the taxing rights of the signatory countries on all forms of income flows arising from cross-border business activities, create greater confidence for investors, and facilitate people-to-people flows.

Along with the bilateral agreements, International Enterprise (IE) Singapore also announced the establishment of its third overseas center in Africa by 2017 in Nairobi, Kenya. IE Singapore already has two other offices in Accra, Ghana, and Johannesburg, South Africa. These IE bases in Africa will give Singapore companies better access to the fast-growing East Africa region. Lee Ark Boon, chief executive officer of IE Singapore, noted that Africa’s long-term growth prospects are strong, and Singapore companies looking to diversify from traditional markets should consider options in Africa.

Singapore-Africa bilateral trade has grown steadily since 2005 with an average annual growth of 5.2 percent, reaching 11.5 billion Singapore Dollars in 2015. According to an article from Global Trade Review, at of the end of 2014, Singapore’s cumulative direct investments into Africa count 22.1 billion Singapore Dollars. Currently, there are 60 Singapore companies operating across more than 50 African countries. Singapore’s Minister for Trade and Industry, S. Iswaran, explicitly mentioned at the forum that Singapore companies must venture beyond common markets to seize opportunities in untapped markets in regions such as Africa.

This trade opportunity is not a one-way relation from Singapore to Africa. African companies now have an opportunity to come to Singapore and set up shop too. At the forum, Deputy Prime Minister Tharman Shanmugaratnam said there is a need for Africa to integrate with Asia, and in particular East Asia, as the two continents are both the next biggest sources of consumption growth, seeing Singapore as an effective gateway for African business to Asian market.

According to a report from Ernst & Young, Africa’s compound annual growth rate from 2007 to 2012 reached 8.8 percent. The report reveals that a diverse group, including the likes of Angola, Ghana, Ethiopia, Tanzania, Mozambique, Nigeria and Zambia, are among the fastest growing in the world, with growth of more than 7 percent over a sustained period, and many of the companies that have pursued a longer-term African growth strategy are generating excellent returns from their investments. As the world’s most promising continent, Africa will continue to attract new opportunities and entrepreneurship from already emerging and developed economies for years to come – making the future even brighter.

For more information:

Singapore inks bilateral agreements with Ethiopia, Mozambique and Nigeria

Africa attracts Singapore interest

Singapore pushes for deeper engagement with Africa

Singapore-Africa trade relations set to deepen with new agreements

Africa by numbers 2013–14: Ernst & Young Report

 

 

 


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