• Wednesday, April 17, 2024
businessday logo


AfCFTA: African Development Bank proposes industrial hubs to drive jobs

AfCFTA: African Development Bank proposes industrial hubs to drive jobs

To make Africa a manufacturing powerhouse, the African Development Bank (AfDB) has proposed that the continental free trade agreement moves beyond trade to industrial manufacturing zones that create jobs.

“I think African Continental Free Trade Area (AfCTA) should not just be a trade region but an industrial manufacturing zone where we trade value-added manufacturing products from national and regional value chains that are competitive globally,” said Adewumi Adesina, president of the AfDB during a closing press briefing at the bank’s annual meetings held in Accra Ghana.

According to him, AfCTA should drive the creation of zones that will offer infrastructures, facilities, and incentives that drive manufacturing in the continent as it is done in Asia and South America to create jobs.

He stated that the cumulative GDP of all African countries which are signatories to the trade agreement is $3.3trillion, noting that lots of progress have been made since the kick-off of the agreement in terms of rules of origin and tariffs.

Speaking on what the bank is doing to ensure that Africa transition to just and sustainable energy that can power factories to drive manufacturing, he said AfDB is working with partners to help countries on the continent tap into the $24billion liquefied natural gas project.

“We are committed to energy transmission, renewable energy. As a bank, 86 percent of our investments in power generation goes into renewable energy,” he said.

Read also: Ecobank updates retail foreign exchange transactions for schools

“If Africa today were to triple its use of natural gas, it will only contribute less than 0.67percent to global green gasses,” he further said.

He added that gas must be in the energy transition mix of the continent as it has large gas reserves across countries.

“We need a structure to transfer energy on the continent and export. That should be a priority for Africa,” he stated.

He urged African leaders to construct the vehicles and finance to transfer its gas in a way it would link Africa to Europe. “We need to construct vehicles and finance to transfer our gas in a way that would link Africa to Europe.”

He said the bank plans to power the continent from gas, adding that deforestation and land use are the main green gas emissions in Africa.

On debt management, he said the bank would focus a lot on debt management by ensuring that African countries have transparent, quality, and sustainable debt.

“We will ensure that we work collectively with the World Bank, IMF, and G20, on the G20 common framework to ensure that private debt and the commercial debt of Africa is well dealt with,” he said.

“Almost over 40 percent of Africa’s debt is held by the private sector, commercial lenders, very expensive and short term debt.” “We need to work on the G20 common framework and we would work on that,” he added.