Wednesday,20 March, 2019
Current issue | Issue 1373, (14 - 20 December 2017)
Wednesday,20 March, 2019
Issue 1373, (14 - 20 December 2017)

Ahram Weekly

African connections

Removing trade barriers and boosting investment across the African continent took centre stage at this week’s Africa 2017 Forum in Sharm El-Sheikh, reports Mona El-Fiqi 

African connections
African connections

African businessmen, officials, and policy-makers came together earlier this week to discuss ways of improving investment and trade across the continent in the Africa 2017 Forum. 

Under the auspices of President Abdel-Fattah Al-Sisi, the Africa 2017 Forum, entitled “Business for Africa, Egypt and the World,” was held from 7 to 9 December in the Red Sea resort of Sharm El-Sheikh.

This is the second such Forum to be held and is a chance to exchange expertise and showcase investment opportunities in Egypt and Africa, according to Sahar Nasr, minister of investment and international cooperation.

Comprehensive reforms adopted by African governments had led to improvements in economic conditions across the continent and notable changes in the structure of many African countries, Nasr said. Africa accounted for 30 per cent of total global improvements in business and regulatory reforms in 2016.

The growth rate of 12 African countries exceeded five per cent, while half of them registered seven per cent and above in 2016. Africa’s total growth rate is expected to rise to 4.3 per cent in 2018, and African economies are outperforming the global average and most other emerging markets, Nasr said. 

Attended by some 3,000 participants from 45 countries, including heads of state, ministers, investors, entrepreneurs and representatives of African and regional institutions, the forum was organised by the Ministry of Investment and International Cooperation and the Common Market for Eastern and Southern Africa (COMESA) Regional Investment Agency (RIA).

Under the rubric of “driving investment for inclusive growth,” the event was a chance to take concrete steps towards greater cooperation. The Federations of Egyptian and African Chambers of Commerce discussed the building of road links between Egypt and Chad that will cross four countries and facilitate the exchange of commodities among African countries and reduce transportation costs. 

The European Union is providing grants to finance feasibility studies for the project that are expected to be completed by June 2018.

Closing the infrastructure gap on the African continent is vital for harnessing the potential of factors such as rapid population growth and urbanisation to fuel sustainable economic development, Ahmed Heikal, chairman of Qalaa Holdings, said during the forum.

Investments in infrastructure, from power and water supply to transportation and information and communication technologies, are crucial for increasing Africa’s share of global trade, which is currently only three per cent, Heikal said. 

“The African continent is experiencing a push to develop lasting world-class infrastructure, while at the same time suffering from a shortage of finance and high borrowing rates. Private investors should jump at the opportunity to be a part of this,” he added.

The lack of infrastructure linking African countries is not the only obstacle hindering the exchange of trade. Amr Kamel, executive vice-president for business development and corporate banking at the African Export Import Bank (Afreximbank), said during a panel discussion at the forum that “trade was actually being held back mainly because people in one African country lacked information about trade opportunities in others.”

A recent study conducted by Afreximbank had showed that some African countries were importing certain products at a high cost from outside Africa, while the same products were available at a much lower cost from nearby African countries, he said.     

To overcome the lack of awareness, the forum included sessions designed to inform participants about national projects, available investment opportunities in Egypt, and opportunities in rapid-growth companies in Africa. A Young Entrepreneur’s Forum was also part of the Africa 2017 Forum.

Among the recommendations of the event was the need to boost economic growth and development and to establish joint projects, particularly in the area of infrastructure, to support investment and trade among African countries. 

Though African countries have great potential and natural resources, cooperation among them remains modest. However, over the past few years governments as well as the private sector have started to recognise the importance of economic cooperation.    

Concrete steps towards the establishment of the largest free-trade zone in Africa were taken in June 2105 when Africa’s three largest regional economic blocs, the Southern African Development Community, the East African Community and the Common Market for Eastern and Southern Africa, agreed to expedite efforts to unite into a single, trans-African free-trade zone to be known as the Tripartite Free Trade Area (TFTA).

The TFTA would cover 26 countries stretching from Egypt to South Africa and Mauritius to Namibia with total GDP nearing $1.2 trillion. The TFTA countries collectively account for 632 million people, or 57 per cent of Africa’s population, and nearly 58 per cent of its GDP.

Egypt’s total investment in the African continent has reached more than $8 billion in the fields of construction, infrastructure, energy, agriculture, mining, communication and information technology.

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