The scramble to accelerate economic growth in Africa following the pandemic-induced slump will be swift if countries in the continent utilise local resources, trade, and technological advancement.
Top industry experts unanimously agreed Tuesday at the ongoing Africa Business Convention 2022 organised by BusinessDay that the African continent needs to explore emerging opportunities and be updated with global trends and developments to abate the impact of the pandemic, leveraging trade and technology.
Shubham Chaudhuri, Nigeria’s country director, World Bank, said Africa needs to explore options to attract investments and grow its trade portfolio to achieve accelerated recovery post-pandemic.
More than a year after signing the African Continental Free Trade Area (AfCFTA) agreement, countries in the continent with a GDP size of over $2.69 trillion are yet to start reaping from the initiative that could place Africa as one of the world’s power economies.
For example, exports from Nigeria, the continent’s largest and most populous nation, to Africa fell by 25 percent in the first six months of 2021 compared with the same period the previous year. This decline in African exports sufficed despite the commencement of AfCFTA in January 2021.
Most of Africa, according to Shadrack Kubyane, co-founder, Coronet Blockchain, SA, is built around extraction not synergy, and as a result, the continent was now faced with an infrastructure deficit across the supply chain.
“It is a lot easier to move things from China and Europe into Africa than it is to move things within Africa, and we need to repair that,” he said.
To solve the problem, the blockchain expert said the solution does not revolve around infrastructure rather government policies to probe innovation.
“We need a mindset shift for a successful free trade. Africa cannot continue to maintain the ideology that the winner takes all to repair trade in the continent. Countries need a mindset shift; also, blockchain is creating a level playing ground for all players in African trade, especially MSMEs,” he said.
Kunle Elebute, chairman, KPMG Africa, believes countries in Africa cannot maximise the trade agreement exchanging commodities in raw forms, saying, “African countries need to learn how to attract the market, boost capacity for manufacturing, and increase value addition practices.”
According to the chairperson of the Netherlands-based institution, an alternative to the exchange of commodities is manufactured products. “Unfortunately, the local manufacturing sector has not fared well over time, which calls for the need to put in place enabling policies and infrastructure for manufacturing outfits to thrive,” Elebute said.
To improve trade relationships, Kelvin Uwaibi, managing director, Edo State Investment Promotion Office (ESIPO), said sub-nationals in African states must commence trade with each other, as this will fuel the drive to trade across the region.
“Sub-nationals need to look at how they can start to produce locally and also trade with each other. Interstate trading should be groomed before going to the continent,” he said.
Kubyane said too much bureaucracy interferes with African international trade, which affects the process and discourages participation.
Technology is the tool that could serve as the one currency needed to bridge the lapses faced by trading in Africa, Hanu Fejiro Agbodje, the founder of Patricia Technology, said.
“The blockchain and cryptocurrency already solved the problem of one currency in the continent, we just need to tap into it,” Agbodje said, adding that technological innovations were what was needed to ease the pains of smooth trading in Africa.
Acknowledging that the innovations around blockchain and the likes are disruptive and which was the case when the internet, railways, and others were first established, the industry players said Africa needs to visit the ‘dentist.’ In this case, the ‘dentist’ is the blockchain.
“For us to move upward and forward, we need to be a bit uncomfortable and face the truth,” Kubyane said.
Still recovering from the impact of COVID-19, the International Monetary Fund (IMF) expects sub-Saharan Africa to grow at 3.8 percent in 2022, higher than the 2.7 percent growth projection for Nigeria.
While the impact of the pandemic can be easily blamed for the slow growth in Africa, especially in some of its biggest economies like Nigeria, an evaluation of micro-economic indicators of the continent’s largest economy before the COVID-19 pandemic, for example, shows the recent challenges only made what was already a bad situation worse.
Lagos State governor, Babajide Sanwoolu, in his opening remarks at the Business Convention described the pandemic as a dangerous virus that was yet to be completely managed.
“It is necessary to develop capacity and establish the necessary infrastructure, which will create buffers against such occurrences in the future,” he said.
Explaining how some of today’s world power economies were able to scale economic growth and development, Birgitte Andersen, founder/CEO, Big Innovation Centre, UK, said China, for example, managed to get 800 million people out of extreme poverty in 30 years by focusing on infrastructure development. With a different approach, she said India focused on the supply chain and became a supply chain to the rest of the world. The US, according to her, focused on the internet revolution and talent system. Europe leverages big companies to become catalysts and accelerators. The Middle East focused on real estate and the building of big cities.
“Looking at Africa from the outside, it can get everybody online and be able to create a system. It can look at the talent to generate growth and it can leverage the AI system to achieve its goals,” she said.
The World Bank is of the view that increased investment in human capital translates to higher economic prosperity.
“With the current COVID-19 pandemic, it is even more important to understand why countries should invest in human capital (HC) and protect hard-won gains from being eroded,” the World Bank economists said in a report.
Kingsley Moghalu, founder, Sagato Strategies LLC and former deputy governor of the Central Bank of Nigeria, said at the BusinessDay Africa Convention that Nigeria needed to change its education curriculum to one that will be based on science, technology, engineering, and mathematics (STEM).
“We need to have a leader who can relate to younger people and has a passion for their future,” he said. Industry experts unanimously agreed Tuesday at the ongoing Africa Business Convention 2022 organised by BusinessDay that the African continent needs to explore emerging opportunities and be updated with global trends and developments to abate the impact of the pandemic, leveraging trade and technology.
Shubham Chaudhuri, Nigeria’s country director, World Bank, said Africa needs to explore options to attract investments and grow its trade portfolio to achieve accelerated recovery post-pandemic.
More than a year after signing the African Continental Free Trade Area (AfCFTA) agreement, countries in the continent with a GDP size of over $2.69 trillion are yet to start reaping from the initiative that could place Africa as one of the world’s power economies.
For example, exports from Nigeria, the continent’s largest and most populous nation, to Africa fell by 25 percent in the first six months of 2021 compared with the same period the previous year. This decline in African exports sufficed despite the commencement of AfCFTA in January 2021.
Most of Africa, according to Shadrack Kubyane, co-founder, Coronet Blockchain, SA, is built around extraction not synergy, and as a result, the continent was now faced with an infrastructure deficit across the supply chain.
“It is a lot easier to move things from China and Europe into Africa than it is to move things within Africa, and we need to repair that,” he said.
To solve the problem, the blockchain expert said the solution does not revolve around infrastructure rather government policies to probe innovation.
“We need a mindset shift for a successful free trade. Africa cannot continue to maintain the ideology that the winner takes all to repair trade in the continent. Countries need a mindset shift; also, blockchain is creating a level playing ground for all players in African trade, especially MSMEs,” he said.
Kunle Elebute, chairman, KPMG Africa, believes countries in Africa cannot maximise the trade agreement exchanging commodities in raw forms, saying, “African countries need to learn how to attract the market, boost capacity for manufacturing and increase value addition practices.”
According to the chairperson of the Netherlands-based institution, an alternative to the exchange of commodities is manufactured products. “Unfortunately, the local manufacturing sector has not fared well over time, which calls for the need to put in place enabling policies and infrastructure for manufacturing outfits to thrive,” Elebute said.
To improve trade relationships, Kelvin Uwaibi, managing director, Edo State Investment Promotion Office (ESIPO), said sub-nationals in African states must commence trade with each other, as this will fuel the drive to trade across the region.
“Sub-nationals need to look at how they can start to produce locally and also trade with each other. Interstate trading should be groomed before going to the continent,” he said.
Kubyane said too much bureaucracy interferes with African international trade, which affects the process and discourages participation.
Technology is the tool that could serve as the one currency needed to bridge the lapses faced by trading in Africa, Hanu Fejiro Agbodje, the founder of Patricia Technology, said.
“The blockchain and cryptocurrency already solved the problem of one currency in the continent, we just need to tap into it,” Agbodje said, adding that technological innovations were what was needed to ease the pains of smooth trading in Africa.
Acknowledging that the innovations around blockchain and the likes are disruptive and which was the case when the internet, railways and others were first established, the industry players said Africa needs to visit the ‘dentist.’ In this case, the ‘dentist’ is the blockchain.
“For us to move upward and forward, we need to be a bit uncomfortable and face the truth,” Kubyane said.
Still recovering from the impact of COVID-19, the International Monetary Fund (IMF) expects sub-Saharan Africa to grow at 3.8 percent in 2022, higher than the 2.7 percent growth projection for Nigeria.
While the impact of the pandemic can be easily blamed for the slow growth in Africa, especially in some of its biggest economies like Nigeria, an evaluation of micro-economic indicators of the continent’s largest economy before the COVID-19 pandemic, for example, shows the recent challenges only made what was already a bad situation worse.
Lagos State governor, Babajide Sanwoolu, in his opening remarks at the Business Convention described the pandemic as a dangerous virus that was yet to be completely managed.
“It is necessary to develop capacity and establish the necessary infrastructure, which will create buffers against such occurrences in the future,” he said.
Explaining how some of today’s world power economies were able to scale economic growth and development, Birgitte Andersen, founder/CEO, Big Innovation Centre, UK, said China, for example, managed to get 800 million people out of extreme poverty in 30 years by focusing on infrastructure development. With a different approach, she said India focused on the supply chain and became a supply chain to the rest of the world. The US, according to her, focused on the internet revolution and talent system. Europe leverages big companies to become catalysts and accelerators. The Middle East focused on real estate and the building of big cities.
“Looking at Africa from the outside, it can get everybody online and be able to create a system. It can look at the talent to generate growth and it can leverage the AI system to achieve its goals,” she said.
The World Bank is of the view that increased investment in human capital translates to higher economic prosperity.
“With the current COVID-19 pandemic, it is even more important to understand why countries should invest in human capital (HC) and protect hard-won gains from being eroded,” the World Bank economists said in a report.
Kingsley Moghalu, founder, Sagato Strategies LLC and former deputy governor of the Central Bank of Nigeria, said at the BusinessDay Africa Convention that Nigeria needed to change its education curriculum to one that will be based on science, technology, engineering and mathematics (STEM).
“We need to have a leader who can relate to younger people and has a passion for their future,” he said.
