- Major obstacles to foreign investment in Africa are macroeconomic risk, currency volatility, infrastructure deficits and regulatory inconsistencies, Islam Swaleh tells Anadolu
ISTANBUL
Africa’s vast natural wealth has long coexisted with persistent gaps in jobs, industry and incomes, a paradox that continues to shape debates over the continent’s economic future.
Many African countries continue to face challenges in turning that wealth into widespread economic growth, with disparities in employment, industrial development and market opportunities persisting.
From agriculture to mining, policymakers and investors have questioned why abundant resources have not translated into broader development outcomes.
In an interview with Anadolu, Islam Swaleh, head of entrepreneurship and investment at the African Union (AU) Commission, highlighted the structure of Africa’s value chains as a central issue, outlining how efforts to link producers more closely to markets and to processing could reshape the continent’s growth path.
“Weak integration of resources into inclusive value chains remains the main barrier,” he said, citing smallholder farmers in agriculture who lack finance, technology and market access, and the mineral sector, where much raw output is exported without processing.
Swaleh highlighted AU initiatives aimed at increasing domestic value from Africa’s resources, including the African Inclusive Markets Excellence Center, connecting farmers, small and middle enterprises, and women-led businesses to value chains, and the AU Mineral Development Strategy, which focuses on local processing, job creation and economic growth.
The strategy seeks to move Africa away from exporting raw minerals toward value-added processing, supporting industries such as batteries, solar energy and electronics, he added.
Fair trade, debt structuring for Africa
Africa is home to more than 1.4 billion people, over 60% of whom are under 25, and holds roughly 60% of the world’s uncultivated arable land. The continent also contains critical minerals including cobalt, lithium and platinum and rare earth elements that are critical components in the technologies that enable efficient and sustainable food production.
However, governance and infrastructure challenges, including deficits in energy, transport, storage and irrigation, continue to reduce productivity, particularly in agriculture, according to Swaleh.
He said external constraints, including rising debt, which exceeds 60% of GDP in some countries, and limited access to affordable finance are restricting productive investment.
“Policy and regulatory reforms are underway,” Swaleh said, including efforts through the AU Private Sector Forum to improve policy predictability and boost investor confidence.
The AU supports measures such as debt restructuring, mobilizing domestic resources and financing linked to industrialization, agriculture and mineral value addition, he added.
“Africa must strengthen production, regional integration and financial resilience,” Swaleh said, calling for increased domestic production, greater intra-continental trade, mobilization of domestic and diaspora capital and responsible borrowing for productive investment.
“At the global level, Africa must advocate for fair trade rules, debt restructuring mechanisms and access to long-term development finance,” he said.
He emphasized that by developing resilient, integrated and industrialized economies and adding value in agriculture and minerals, Africa can secure an equal position in the global economic system.
AU addresses challenges to foreign investment
Foreign investment in Africa remains uneven, with challenges ranging from macroeconomic and regulatory risks to infrastructure gaps, climate pressures and fragmented value chains.
“Major obstacles are macroeconomic risk, currency volatility, infrastructure deficits and regulatory inconsistencies,” Swaleh said, citing climate risks and fragmented value chains as a source of complexity, particularly in agriculture.
He said the AU Strategy for Quality and Sustainable Investment in Africa aims to tackle these challenges by promoting predictable, inclusive and long-term investment, linking finance to sectors that generate jobs, value addition and industrialization.
The AU’s Startup Policy Framework and Model Law along with its strategies, Swaleh explained, “improve the investment climate, attract productive foreign and domestic investment and strengthen Africa’s role in global markets.”
He also said AU platforms such as the Private Sector Forum are boosting structured engagement with investors and entrepreneurs, promoting the continent as a “proactive player” in the global economy.
African Continental Free Trade Area ‘already transforming business behavior’
The African Continental Free Trade Area (AfCFTA) aims to create the world’s largest integrated market, offering new opportunities for regional trade and industrial growth. Yet its implementation faces significant hurdles.
According to Swaleh, these hurdles include infrastructure gaps, limited access to trade finance, weak border logistics and uneven productive capacity, with many small and medium enterprises and agricultural producers struggling to meet cross-border standards.
AfCFTA is “already transforming business behavior,” with AU initiatives addressing challenges through policy harmonization, capacity building and aligning finance with production and trade, enabling both large firms and small actors to benefit from the continental market.
Swaleh said AfCFTA is encouraging firms to scale production for regional markets, invest in logistics, storage and processing and strengthen regional trade in processed agricultural and mineral products while reducing inefficiencies.
It could lift as many as 30 million people out of extreme poverty and boost Africa’s income by $450 billion by 2035 while already supporting investment and industrialization, he noted.
