African countries that are set to take part in the African Continental Free Trade Agreement must invest in regional infrastructure in order for it to succeed.
This is according to the Former Governor of the Central Bank of Nigeria, Charles Soludo.
The Agreement, which is expected to see full implementation this month is aimed at creating the biggest single market in Africa, twenty-three countries including Ghana have signed unto the agreement.
This will make the region with the potential market of 1.2 billion people with a cumulative Gross Domestic Product of US$3.4 trillion.
In an interview with Citi Business News, Charles Soludo stated that regional infrastructure among the participating African countries is key in making the trade agreement a success.
“It’s not just about signing this document but we need to take concrete steps to make it happen. We need to invest in infrastructure and we must begin to think about effective transportation because that is the major impediment why we do not trade amongst each other and not solely because we produce similar things”.
He added, “In Europe, several countries manufacture cars but they still sell the cars across many countries so, it’s so much that perhaps it’s cheaper to import goods from Britain to Ghana than it is to import from Nigeria because of transport cost.
“You are emphasizing industrialization, it’s not just industrialization for what you consume here but you want to grow big and be able to attract firms that can supply the rest of Africa but we must open up the borders; we must bring and have connectivity among these countries because if we finish producing in Ghana and it’s cheaper to send to Europe than to send to Nigeria then the whole aim of the agreement has been defeated”.
Charles Soludo was also of the view that proper infrastructure among the African countries part taking in the trade agreement will lead to specialization of the products they manufacture.
“Once there is proper infrastructure in place and the various countries are able to move their goods about freely, I believe this will lead to specialization whereby organizations will go to the best places for the production of certain items and probably set up there. In the same way, countries may move away from the production of certain things and produce other goods which will sell better for them”.
He made these comments at the sidelines of the K.B Amissah Arthur Economic Forum, to mark a year since his passing.