Tweet

At first glance, Singapore appears to have very little in common with most African countries. The small, Southeast Asian island nation is a hub for cutting edge tech development and financial services, its skyline dominated by glass high rises.

 

Yet Singapore, which has presided over an economic transformation to rival that of the region’s other miracle economies such as South Korea and Taiwan, is taking a keen interest in African markets and investment opportunities. In 1980 - 15 years after independence -Singapore’s GDP was just $12.046bn. Now, it is worth an estimated $276.52bn.

 

The relationship with Africa is nascent, but the number of Singapore-based companies invested in the continent is rising steadily.

 

“Over the past three years, we have certainly seen more trade relations and more business visits,” says Singapore’s senior minister of state for trade and industry Lee Yi Shyan.

 

Singapore’s ambitions also go beyond direct trade with the continent. The country hopes to position itself as a gateway for trade between Africa and Southeast Asia. Singapore is one of the leaders of the Association of Southeast Asian Nations (ASEAN) and is home to one of the world’s busiest ports, making it a natural geographic hub for commerce Africa-Asia commerce.

 

“Singapore is trying to bring the two regions together: Sub-Saharan Africa and ASEAN countries,” says Mr Lee Yi Shyan. “ASEAN accounts for about one quarter of Singapore’s trade. So if you trade with Singapore, you connect with the other southeast Asian countries.”

 

The uptick in interest is partly due to slowdowns in Singapore’s traditional markets in the US, Europe and, to a certain extent Asia. “Africa is becoming more and more interesting,” says Rahul Ghosh, head of Africa and Middle East at International Enterprise (IE) Singapore, the external relations branch of Singapore’s Ministry of Trade.

 

He also believes that “Africa is starting to become more aggressive in telling the world what the opportunities are there.”

 

Where Temasek goes, others follow

Spearheading this burgeoning relationship is Singapore’s sovereign wealth fund, Temasek Holdings, which manages a portfolio of $215bn.

 

In April, Temasek invested $150m in indigenous Nigerian oil and gas company Seven Energy. A few months earlier, Temasek spent $1.3bn through its subsidiary, Pavilion Energy, to secure a 20 percent stake in several gas fields in Tanzania controlled by Ophir Energy.

 

Ian Lee, IE Singapore’s West Africa centre director based in Accra, Ghana, believes that Temasek’s position as “the leader of Singapore’s businesses” will pave the way for other companies to go into the region.

 

Building up the basics

The traditionally dominant resource sector is not the only thing driving Singapore’s interest in Africa’s fast-growing economies.

 

Major players in the agriculture, food and beverage industries such as Olam and Tolaram have long had operations on the continent. Hyflux is building the world’s largest water de-salienation plant in Nigeria. Urban and masterplanning giants Jurong and Surbana International have been brought in to redesign many of the continent’s urban centres - including Kigali, Rwanda and Bujumbura, Burundi - and industrial zones.