"A suitable mix of foreign and domestic investment is the medium through which competitive production capacities are established and maintained," he said.
Simulating investment in Africa, according to Prof. Mucavele, requires the use of public resources as a lever for private investment, access to finance and as well as addressing infrastructural challenges that hinder private sector initiatives and increases costs.
Agriculture must also be the subject of specific initiatives designed to increase private resources directed to it, according to Prof. Mucavele,
The professor, however, recognized the five per cent economic growth as a turning point for the continent who has suffered with several decades of economic stagnation. He attributed the growth to the boom in commodity prices in recent years and political and economic stabilization of the continent.
Foreign Direct Investment (FDI) in Africa also reached 31 billion USD in 2005 surpassing official development assistance (ODA) for the first time, he said.
"This represents a 78 per cent increase over 2004, an all-time record and a growth rate higher than both the global FDI figure (29 per cent) and the figure for foreign investment in the developing countries," he said.
Though FDI in Africa continues to be mainly concentrated in the extractive industries, the current upsurge is affecting more countries and more sectors than any of those that preceded it, he said.
According to Prof. Mucavele, food processing, textiles and services are attracting a growing proportion of foreign investments for countries like China, India, Malaysia and South Korea are making an entrance into the investors' club.
Source: All Africa
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