Infrastructure gap major drawback to AfCFTA success — Afreximbank

AFREXIMBANK chairman and president, Professor Bennedict Oramah, says urgent measures must be taken towards building adequate infrastructure that supports the successful implementation of the African Continental Free Trade Area (AfCFTA) Agreement.

As the continent pushes towards an integrated free trade market under the historic deal, which came into force early last year and has been ratified by Zimbabwe and several regional peers, the need to bolster infrastructure development has come under spotlight as a key enabler to trade competitiveness.

Academic studies and experts concur that major infrastructure such as roads, aviation, rail, energy and Information Communication Technology, among others, play a critical role in enhancing viable trade development and promotion, as well as trimming trade deficits.

Speaking at the Botswana Global Expo, which ended on Friday where about 30 Zimbabwean companies participated, Prof Oramah said inadequate infrastructure was a major drawback to quick realisation of the desired AfCFTA gains.

Pushing the boundaries towards industrialisation, he stated, is critical for Africa’s transformation with focus on harnessing trade and investment opportunities.

This also includes building adequate infrastructure capacity that supports standards and quality certification of products from the continent.

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

Dr Nicholas Ndebele

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

Despite being home to key industrial raw materials, he said it was disheartening that Africa still relies on importation of most finished products including fertiliser and that because of this, the continent has been exposed to geopolitical complications such as the Russia-Ukraine conflict.

Prof Oramah said it was ironic that Africa was inclined to trading more of its primary products mainly with foreign markets at a time when intra-Africa trade remains lowest, hovering below 20 percent on average.

He said such patterns were a legacy of colonisation, which modelled African economies to serve Western interests, adding that this must be corrected through AfCFTA.

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

Afreximbank President, Prof. Benedict Oramah

“In doing this we seek to increase intra-regional trade from about 16 percent to at least 25 percent.”

He stressed the need for economies to embrace modern digitalisation to enhance trade facilitation, market intelligence and inclusion of the majority of the populace in mainstream economy.

In order to capacitate Botswana’s participation in the regional economy, he announced financing support to the tune of US$1,5 billion moving towards year 2025 to support the productive sector under special economic zones including small to medium enterprises, among others.

Commenting on Zimbabwe’s participation at the expo, Zimbabwe International Trade Fair (ZITF) company chief executive officer, Dr Nicholas Ndebele, who was part of the Zimbabwean delegation said it was encouraging that local businesses are already positioning themselves for expanding the regional market footprint.

Zimbabwe International Trade Fair (ZITF)

“With the advent of the AfCFTA, it’s important for Zimbabwe to benchmark against regional peers in various sectors that are going to be part of the growing competition,” he said.

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

Botswana President Dr Mokgweetsi Masisi who officially opened the trade event on Wednesday, also reiterated the need to scale up the momentum towards regional integration and diversifying the continent’s economy away from reliance on primary industries.

He said his country, while dominated by diamond mining earnings, was driving towards diversifying into a knowledge economy in which the creative and cultural sector, among other services industries, play a crucial role.

Dr Mokgweetsi Eric Keabetswe Masisi, the President of Botswana

In view of disruptive forces such as Covid-19 and unforeseen geo-political complications, Dr Masisi said Africa needs to harness opportunities under regional integration whose vision and aspirations are anchored on a shared destination in which the entire continent is envisaged to be a global economic power house.-chronice..zw