The President Nana Addo Dankwa Akufo-Addo has called on fellow heads of state and the global business community to focus on unlocking the $450 billion that the continent stands to accrue under the Africa Continental Free Trade Area (AfCFTA) by 2035.
He explained that a one per cent increase in Africa’s share of global trade from the current two per cent to three per cent could generate some $70 billion of additional income per annum for the continent.
Speaking at this year’s edition of the Africa-Italy Summit in Rome, Italy on Monday, President Akufo-Addo said a key step to achieving this was for all within the global community to support the call for a new investment approach that prioritised mutually reinforcing partnerships between the private sectors across advanced economies and the economies of Africa.
He noted that in line with the urgency to take the necessary steps towards resiliency as a continent, it is important to avoid “tax-dodging,” which was the illegitimate commercial transactions by multinationals, which accounted for 60 per cent of the US$88 billion of illicit financial flows annually from the continent, and other relationships which inhibit Africa’s development.
President Akufo-Addo said with the right reforms and interventions, the continent could also unlock some $550 billion of investment locked up due to the fact that more than 80 per cent of infrastructural projects on the continent failed at the feasibility and business planning phase.
“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 8.5 per cent. 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 stressed.
The President expressed confidence that with added emphasis placed on creating a de-risked landscape that innovatively crowded in resources from private sources of capital, international financial institutions, and sovereign wealth funds, governments on the continent would focus their efforts on delivering transformative investments like infrastructure to boost Africa’s development aspirations.
“The African Development Bank says the continent’s infrastructure financing needs will be as much as $170 billion a year by 2025, with an estimated gap of around $100 billion a year.
This is essentially why, with a burgeoning population growing at a rate of 2.5 per cent annually, “It has become even more urgent to provide reliable electricity, affordable and decent housing, improved transportation networks, and accessible health infrastructure”, he emphasised.
Touching on key efforts to engender the delivery of quality economic infrastructure for Africa’s post-COVID-19 recovery, he said, “recent happenings within the global space, particularly the COVID-19 pandemic, the Russian invasion of Ukraine, and the turmoil in the Middle East, which is threatening to engulf the rest of the world, have increased the need for policymakers on the African continent to achieve a structural transformation that yields inclusive and sustainable growth patterns over the medium to long term.”
BY TIMES REPORTER