For Africa to make meaningful gains from AfCFTA, leaders will need to walk the talk

Addis Ababa, 14 May 2018 (ECA) - "Africa will certainly make meaningful gains from African Continental Free Trade Area (AfCFTA) because our countries are individually and collectively committed", affirmed Mr Amadou Ba, the Senegal Minister of Finance. He however noted that African policymakers will first need to prioritize investments in regional infrastructure that catalyze integration and facilitate the intra-continental trade.

Mr Ba made that statement while chairing the roundtable on AfCFTA: transforming Africa during the UN Economic Commission for Africa (ECA) 2018 Conference of African Ministers of Finance, Planning and Economic Development.

At the same roundatable, Mr Jindong Hua, the Vice President and Treasurer of International Finance Corporation (IFC) gave an emphasis on the issue of financing the infrastructure in Africa to make AfCFTA achievable. He said that development of a strong capital market on the continent is a necessity to maximize domestic resources for the much needed economic development and stimulate the free trade.

When you look at the countries that have achieved economic vibrancy, many of them relied on developing their capital markets. That's how they financed strategic sectors of countries such as the United States or China", explained Hua.

According to the Global Infrastructure Hub, the total infrastructure investment forecast for Africa to 2040 is projected to be US$ 174 billion per year.

The Minister of Finance of Ethiopia, Mr Abraham Tekeste, also speaking at the panel of the roundtable, asserted that transformation of Africa is constrained by infrastructure deficit. He noted that energy is one of the constraints to African ambition to drive industrialization. "Addressing these constraints requires focus in terms of investments we make so that they support economic diversification” he said.

Tekeste gave an example of his country, Ethiopia, which has implemented a programme of export-oriented industrial parks and demonstrated the results to be gained from targeted infrastructure development.

The development of industrial parks in Ethiopia aims to transform the country into a major manufacturing hub in Africa and has three intertwined objectives, namely, employment creation, foreign exchange generation, and technology and skill transfer.

Mr Sindiso Ngwenya, Secretary-General, of Common Market for Eastern and Southern Africa (COMESA) was also a panelist. He reiterated that this is the time to walk the talk, recalling that since the foundation of ECA in 1958, and of OAU in1963, We have done little compared to the European countries, and we have not been able to implement the decisions that we make. "When decisions are made, they need to be implemented. If we want transformation on the continent, we need first to have leadership that will make things happen", he said.

Also at the panel, was Ms Maimunah Mohd Sharif, the Executive Director of United Nations Human Settlements Programme (UN-HABITAT). She explained that evidence has shown that for countries to achieve transformation, they need to closely associate the economic planning to urbanization. 

"Investment in a well-planned urbanization is very critical. This will lead cities and towns to be the engine of industrialization and production of tradable goods and services”, said Mohd.

For the last five years, ECA’s recent publications have advocated for a resurgence of industrialization as a development strategy for Africa, stressing its role in accelerating structural transformation.

 

Issued by:

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Economic Commission for Africa
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