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Africa

Africa: Intensify Continental Trade to Unlock U.S.$450 Billion AfCFTA Income – President Akufo-Addo

todayJanuary 31, 2024 1

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The President of the Republic, Nana Addo Dankwa Akufo-Addo, has called on fellow Heads of States and the global business community to focus on unleashing the 450bn United States dollars AfCFTA-driven potential income, that stands to be accrued from continental trade by 2035.

President Akufo-Addo also believes that, a one percent increase in Africa’s share of global trade from two percent to three percent could generate some seventy billion United States dollars of additional income per annum for the continent.

A key step to achieving this, according to the President, is for all within the global community to support the call for a new investment approach that prioritizes mutually reinforcing partnerships between the private sectors across advanced economies and the economies of Africa.

Speaking at this year’s edition of the Africa-Italy summit, on Monday, 29th January 2024, in Rome, Italy, President Akufo-Addo said, in line with the urgency to take the necessary steps towards resiliency as a continent, it is important to avoid “tax-dodging”, which is the illegitimate commercial transactions by multinationals, which account for sixty percent of the US$88 billion of illicit financial flows annually from the continent, and other relationships which inhibit Africa’s development.

With some eighty percent of infrastructural projects in Africa failing at the feasibility and business planning phase, he however noted positively, that with the right reforms and interventions, Africa, according to analysis conducted by the American management consulting firm, Mckinsey & Company, could unlock some US$550 billion of investments annually in infrastructure.

“Before 2020, Africa was attracting increasing foreign direct investment (FDI), although overall FDI inflows remained much lower than in other world regions. Between 2000 and 2019, FDI flows to Africa increased fourfold, with a compound annual growth rate of eight-point-five percent (8.5%). Our biggest challenge is not a scarcity of financing, but a confluence of poor governance, speculative risk perception, and a defective environment for crowding in investors.”

He was confident that with added emphasis placed on creating a de-risked landscape that innovatively crowds in resources from private sources of capital, international financial institutions, and sovereign wealth funds, governments on the continent will have to focus their efforts on delivering transformative investments like infrastructure to boost Africa’s development aspirations.