Indonesian Strategic Partnership : Looking Towards Africa

FPCI Chapter UPNVJ held seminar about Indonesian Strategic partnership : Looking Towards Africa on Thrusday, 2nd May 2019. In this seminar, FPCI invited PT. WIJAYA KARYA (PERSERO) TBK, Ethiophian Embassy, Indonesia Foreign Affairs, and representative from UPNVJ as a speaker to explain about their strategic bussines in Africa. All speaker say about purpose of Indonesian invesmenet in Africa.

PT. WIJAYA KARYA (PERSERO) TBK has a vision which is to be one of The Best Integrated EPC and Investment Company in South East Asia. Beside it, their mission are Providing Excellent Integrated Products and Services on EPC and Investment for Infrastructure, Building, Energy, Industrial Plant, Industry and Realty & Property , Accomplish Key Stakeholders Expectation, Practicing Business Ethics to Promote Good Corporate Citizen and Company Sustainability, Strategic Overseas Expansion, and Implementing Best Practices Integrated Management System.

Africa choose as direction of bussiness because of many reason. The reason are, increasing economy growth in the last 10 years, Central Africa encourages sustainable development, The need to build infrastructure as a connector, Output of the global construction in Africa will increase in 2022 USD 12.9 Bio, compared to 2017 USD 10.8 Bio, and etc.

The amount of infrastructure construction projects in Africa in total amounted to 303 projects, increase in 5.94% compared to the previous year. However, the value of projects decrease 5.25% to USD 307 Bio in 2017. In Eastern Africa, Significant increase in the amount of projects in Eastern Africa 65.12% with total 71 projects in 2017 with total value of USD 32.6 Bio. Southern Africa has 93 infrastructure construction projects in 2017 increase 9.41% from 2016 (additional 85 projects). Decrease in project value from USD 93.5 Bio to USD 89.7 Bio in 2017. In Central Africa, decrease in total amount of infrastructure construction projects from 24 projects in 2016 to 20 projects in 2017. However, total value of projects increase 40%. In Western Africa, total amount and value of projects in Western Africa decrease 14.13% and 17.95%. In Northen Africa, Total amount of developing construction decrease 4.76% but the total value of projects increase 1.31% in 2017.

Based on WIKA statement Indonesia has severeal investment in Africa such as in:
Project 2000 unit Logement (200 M USD )
Rosso Bridge Project ( 620 B IDR)
Kwala -Mourdiah- Niara Kaloumba-nara Road Projject ( 700 B IDR)
a. Mix- used buildings (200 M USD)
b. Social Housing 10.000 unit (200 M USD)
c. Road Towards the Port of Dakar for 31 km (100 M USD)
Free Town Airport Project ( 2,1 T IDR)
a. Renovation of Presidential Palace Zone 3 (10 M USD)
b. Construction of Niger Electric ( 30 M Euro)
Smelter PT. Timah (30 M USD)
Road Construction Project ( 150 M USD)
Ethopian Hangar Facility ( 420 B IDR)
Eco Tourism Development ( 3 T USD)
Cobalt & Nickel Smelter Project (50 M USD)
Storage Tank Sonongol (50 M USD)
Road Development Agency 150 km (125 M USD)
Social Housing & Development Project (560 B IDR )
Rehabilitation of the 333Km Mukono-Kasese Freight
Train Line ( 700 M USD)
Concrete Precast Project (30 M USD)
Road Project 60 km (75 M USD)
a. Rehabilitation of Freight Train Line ( 200 M USD)
b. Oil Installation Facility Project ( 200 M USD)
Hotel Project in Johannesburg (40 M USD)

Ethiophian embassy said that Current population of Ethiopia is 108,047,988 Ethiopia population is equivalent to 1.41% of the total world population. Ethiopia ranks number 12 in the list of countries (and dependencies) by population. The population density in Ethiopia is 108 per Km2 (279 people per mi2). The total land area is 1,000,000 Km2 (386,102 sq. miles) 20.6 % of the population is urban (22,180,245 people in 2018) The median age in Ethiopia is 18.8 years.

Ethiophia has GDP/capita: $739 (2015/16) FDI inflow: $3.2bn (2016)FDI growth: 46% (2016) and being One of the fastest growing economies in the world. One of the top destinations for foreign direct investment (FDI) Ethiopia accounts for 18.5% of all jobs created through FDI in Africa. There some of priority sector on manufacturing industries in ethiophian such as apparel and textile, metal engineer, construction material, pharmaceutical, chemical, industrtry parks, agro processing, and leather products. Pioneer Indonesian Investors located in Ethiopia in textile and apparel, food processing, chemical manufacturing.

Indonesia and Africa was built a meeting of Asian and African states, which took place on April 18–24, 1955 in Bandung, Indonesia. Ethiophian embassy inaugurated in Indonesia on 1961, and start to opened embassy on 2016. Ethiophian has air services agreement with Indonesia in 2017 to make a flight destinantion from Indonesia to Ethiophia. Relation between Indonesia and ethiophia continued in Indonesia Africa Forum which took place on Bali with purpose to Strengthened Indonesia’s partnership with African countries, Series of business deals worth UDS 586.56 million signed, Indonesia and African countries agreed to further intensify economic and trade diplomacy to strengthen Indonesian’s presence in Africa, Key sector areas such as energy, infrastructure, digital economy and innovations, Strategic industries and agriculture were identifies.

To make an investment in ethiophia Indonesia has several challenges such as Infrustructure weaknessess, skilled labour shoratages, Geographical location and cultural diffrences, High cost of transportation and logistices, Bureaucracy and corruption, Regulatory uncertainity, Win- Win situation, the isue of trade balance, The time required to develop trust between investors- partner selection, Unfair wealth distribution, unemployment. Beside of the challenges to be faced with Indonesia to have an investment in ethiophia there severeal oppurtunities to make that investment such as Sharing of best prectices and lessons learned both political and economic side, Both have growing middle calss and there are ample Investiment and trade opportunties, The ample untouched and unexploited resources of Ethiopia, The only south east Asian Country in the G20, FDI incerasing, They both focus on public -private partnership.Presence of financial institution to support the private sector to inverst in the two regions, The high commitments of governments.

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