Infrastructure Deficit is a Major Drawback to AfCFTA’s Success — Afreximbank

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The Chronicle

Prosper Ndlovu recently in GABORONE, Botswana
Chairman and Chairman of AFREXIMBANK, Prof. Bennedict Oramah, said urgent steps must be taken to build adequate infrastructure that supports the successful implementation of the African Continental Free Trade Area (AfCFTA) agreement. .

As the continent moves towards an integrated free trade market under the landmark agreement, which came into force early last year and was ratified by Zimbabwe and several regional peers, the need to strengthening infrastructure development was highlighted as a key enabler of trade competitiveness. .

Academic studies and experts agree that major infrastructure such as roads, aviation, rail, energy and information and communication technologies, among others, plays a vital role in improving the development and promotion of sustainable trade, as well as in reducing trade deficits.

Speaking at the Botswana Global Expo, which ended on Friday, which was attended by around 30 Zimbabwean companies, Prof Oramah said poor infrastructure was a major impediment to achieving the desired gains of the economy quickly. ‘AfCFTA.

Pushing the boundaries of industrialization, he said, is critical for Africa’s transformation with a focus on harnessing trade and investment opportunities.

This also includes building adequate infrastructure capacity that supports the continent’s product quality standards and certification.

“In the context of the African Continental Free Trade Area, we need to invest more in building trade,” Professor Oramah said.

Dr Nicholas Ndebele

“The lack of infrastructure is the biggest constraint as well as the problem of access to information.”

Although home to key industrial raw materials, he said it was discouraging that Africa was still dependent on imports for most finished products, including fertilizers, and because of this the continent has been exposed to geopolitical complications such as the Russian-Ukrainian conflict.

Professor Oramah said it was ironic that Africa is inclined to trade more of its primary commodities mainly with foreign markets at a time when intra-African trade remains at its lowest, hovering below 20% on average .

He said these patterns were a legacy of colonization, which molded African economies to serve Western interests, adding that this must be corrected through the AfCFTA.

“It is these barriers that we need to break down in order to improve our economic situation as a continent and Afreximbank is committed to supporting the growth of intra-African trade,” Professor Oramah said.

Chairman of Afreximbank, Prof. Benedict Oramah

“In doing so, we seek to increase intra-regional trade from around 16% to at least 25%.”

He underscored the need for economies to embrace modern digitalization to improve trade facilitation, market intelligence and inclusion of the majority of the population in the traditional economy.

To enhance Botswana’s participation in the regional economy, he announced financial support of up to US$1.5 billion by 2025 to support the productive sector in special economic zones, including small and medium-sized enterprises, among others.

Commenting on Zimbabwe’s participation in the exhibition, the company’s managing director Zimbabwe International Trade Fair (ZITF), Dr Nicholas Ndebele, who was part of the Zimbabwean delegation, said it was encouraging that local businesses were positioning themselves already to expand the regional market footprint.

Zimbabwe International Trade Fair (ZITF)

“With the advent of the AfCFTA, it is important for Zimbabwe to benchmark itself against its regional peers in various sectors which are going to be part of the increasing competition,” he said.

“In order to build the right business muscle, we need to interact more and network with peers in the region, and our participation here is part of the process.”

The President of Botswana, Dr Mokgweetsi Masisi, who officially opened the business event on Wednesday, also reiterated the need to intensify the momentum towards regional integration and diversify the continent’s economy away from reliance on industries. primaries.

He said his country, although dominated by diamond mining revenues, was moving towards diversification towards a knowledge-based economy in which the creative and cultural sector, among other service industries, play a crucial role.

Dr Mokgweetsi Eric Keabetswe Masisi, President of Botswana

Given disruptive forces such as Covid-19 and unforeseen geopolitical complications, Dr. Masisi said Africa must harness the opportunities of regional integration whose vision and aspirations are anchored on a common destination in which he entire continent is envisioned as a global economy. Power plant.

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