Thursday, March 28, 2019 03:.10PM /
Bukola Akinyele and Nifemi Taiyese for Proshare WebTV
Barriers to trade have kept African economies in silos of underperformance; not only have the trade walls prevented economic growth, but they have also led to a social distancing of people and cultures. Presenting a key note paper at the 4th edition of the Centre for Financial Journalism’s Bullion Lectures during the week, Professor Benedict Oramah, President of AFREXIM Bank, noted that, to get Africa’s economies running ahead at decent economic paces the various barriers to intra-African trade need to be lowered and eventually brought down. According to Oramah, “Africa must break down 84,000km of barriers that tear them apart which will allow for investments and infrastructure to flourish and commodities to trade successfully”.
Oramah believes that freer African trade would serve as a symbol of continental progress. He said that by increasing trade among African economies GDP growth rates across the continent would increase and by translating into higher disposable incomes, both the standards of living and levels of development would rise. He, however, noted that intra-African trade increases would not necessarily mean a decline in trade with non-African economies. The multiplier effect of higher African disposable incomes would rub off on non-African economies alike. Also of note is that with lower prices pulling down inflation nominal interest rates across the continent are also likely to fall.
Oramah argues that if African countries come together, the continent will form a strong bloc to negotiate with Europe, China, America, he suggests.
Professor Oramah asserted that through the ACFTA, there will be free movement of goods and services with several jobs created.
Oramah speaking further stated that a recent survey carried out by the Nigerian government, provided interesting results which revealed that the ACFTA agreement will be advantageous to the country. Foreign Direct Investment (FDI), for example, is likely to see an uptick.
According to the President of AFREXIM Bank the following benefits will accrue from the signing of the agreement;
· It will also enable improvement in the Ease of Doing Business across borders.
· It will improve infrastructure
· It will enlarge markets beyond Nigeria and
Professor Oramah identified the following as efforts of Afrexim in the area of promoting trade in Africa;
Speaking on what must be done to boost trade between Nigeria and Africa, Oramah outlined the following;
· Afrexism Bank on its own offers a broad trade on financial support
· Afrexim invest $25 billion from 2017& 20121, today we have invested $14billion to realize this constraint 50% has conducted formally.
· In 2018, Afrexim Bank has launched export trading companies initiative in Africa
· Financing is critical in supporting companies in Nigeria to invest in Abroad within Africa
· Promoting regional trade
· Afrexim bank will also provide guarantee for the companies to invest in Abroad
Major constraints for the ACFTA identified by the Regional Export-Import Bank Chief include;
· Inadequate quality infrastructure
· Private sector must be attracted to fund infrastructure
· Size of the investment to improve the infrastructure is very high
Oramah argues that there are immense opportunities from the AfCFTA, which are; to transform the structure of the Nigeria economy and other African economies, Strengthen the government and negotiate tariff and also Carry out adjustment in domestic trade.
The 2019 Bullion lecture also featured a panel session with a number of discussants which included; Mr. Muda Yusuf, Director General, Lagos Chamber of Commerce and Industry and Mr. Ade Adefeko Vice President, Corporate & Government Relations, Olam Nigeria looking at the intricacies of the AfCFTA and implications for Nigeria, moderated by Dr Uche Olowu, President CIBN