Investment needed in critical infrastructure and services to reap dividends of AfCFTA

Mr Herbert Krapa, a Deputy Minister, Ministry of Trade and Industry, says “Africa will not the dividend of AfCFTA, if we are not investing in critical infrastructure and services.”

He said the role of Investment Promotion Agencies (IPAs) was critical in ensuring that the continent brought the dividends and the benefits of intra Africa trade to the fore.

The First Annual Assembly of African Investment Promotion Agencies is being hosted by the Ghana Investment Promotion Centre (GIPC) in Accra.

The maiden event was on the theme: “The Role of IPAs in Facilitating Intra African Trade.”

The event brought together, the Heads and Representatives of the invited African Investment Promotion Agencies and their colleagues from the World Association of Investment Promotion Agencies (WAIPA), economic and political leaders.

It discussed the critical role IPAs play in boosting intra-African trade and deliberated on the emerging opportunities AfCFTA continues to present and how various development actors can leverage them to facilitate trade and boost continental socio-economic development.

He said UNCTAD forecasts showed that the AfCFTA could boost intra Africa trade by about 33 per cent and cut the continent’s trade deficit by 51 per cent.

He said if the IPAs worked together and channeled their energies and resources together, they would be able to make more gains for the continent and for Member States.

“Because once we are working together, and we are speaking to each other and aligning resources, it will be possible to implement an agenda that fits directly into African Agenda 2062,” he added.

Mr Krapa said it was very crucial that “we pay attention to institutional collaboration as we go into the conversations, and it is also important that you pay attention particularly to how we can streamline regulation among IPAs Member States.”

He said FDI may not be the panacea for all their economic problems in Africa, but it is important because it brings the fresh capital, technology, and skills so badly needed to raise living standards and reduce Africa’s dependence on volatile commodity exports and as we look externally, it is time to look inward for the much-needed investment.

The AfCFTA promises broader and deeper economic integration and would attract investment, boost trade, reduce poverty, and increase shared prosperity in Africa and at full operation.

Mr Yoofi Grant, CEO, Ghana Investment Promotion Council, said Africa could see FDI increase by between 111 per cent and 159 per cent under the AfCFTA, while wages would rise by 11.2 per cent for women and 9.8 per cent for men by 2035, albeit with regional variations, depending on the industries that expanded the most in specific countries.

He said under deep integration, Africa’s exports to the rest of the world would go up by 32 per cent by 2035, and intra-African exports would grow by 109 per cent, led by manufactured goods.  

These statistics makes the case for a deepening of intra-regional connections and networks to foster intra-African investment.

He said the AfCFTA with its protocols on trade, intellectual property, investment, among others would provide much needed stimulus and drive the Africa’s long-term recovery and growth.

He said liberalising tariffs in Africa was set to unleash billions of dollars in untapped export potential and with plans under way to remove market frictions that hindered intra-Africa trade. AfCFTA is on course to increase intra -African trade by 81 per cent by 2035, according to him.

The CEO said international investor community could be assured that Africa was ready and open for business with the AfCFTA providing a level playfield of rules and incentives.

“The time is ripe for us to chart a new path in the African FDI story, we must embrace this opportunity with open arms and work tirelessly to realise the goal of an economically emancipated Africa,” he added.

Mr Ismail Ersahin, Executive Director, WAIPA, said to attract and facilitate direct FDI investments, IPAs were critical partners to governments and investors around the world.

He said WAIPA commended the strong efforts in gathering the IPAs to the annual event and they were convinced that sharing insights and knowledge would lead to better results and ultimately more and more sustainable FDI.