The President of the African Export-Import Bank, Prof. Benedict Oramah has called on African leaders to break artificial barriers among them and inter-trade more in order to transform the continent economically.
Oramah gave the submission while delivering a keynote lecture entitled ‘Leveraging the Africa continental free trade agreement to boost Nigeria’s economic development’ at the 2019 Bullion lecture organised by Centre for Financial Journalism at the Civic Centre, Victoria Island, Lagos recently.
In his address, Oramah said though Africa appears to be finally finding its rhythm, the countries within the continent must reverse the colonial strategy by breaking the artificial barriers. He said that: ‘For Africa to develop, it must reverse the colonial strategy. We must stop blaming others for our malaise. Africa must break the artificial barriers that continue to tear it apart and trade more among itself. It is by doing so that it can diversify away from commodity dependence and see investment in infrastructure flourish’, he said.
Oramah said changing the colonial strategy is imperative because it has drastically prevented most Africa countries from experiencing massive economic growth needed to make them giant modern nations. His words: ‘This colonial strategy, underpinned by some basic negative principles explains why powerful African kingdom did not rise to become great modern nation states and why trade among Africans remain very low even today.’
The Bank Chief stressed that prior to the advent of the colonials, some African kingdoms were by the standard of that time well developed and as advanced as the countries that eventually became their colonial masters. While explaining the need for African countries to inter-trade, Oramah said comparative economic analysis has shown that regions that trade more among themselves are the most developed, citing Europe, South East Asia and North America as classic examples.
While comparing the development rate of these leading regions with Africa, Oramah said: ‘Leading regions, such as Europe, South East Asia, North America boast intra-regional trade share of their respective total trades in excess of 25% (some are at 65%), their GDP in current US dollars is in excess of 4 trillion US dollars. In comparison, intra-African trade stands at about 16% and Africa’s GDP at 2.2 trillion dollars’.
According to the bank chief, greater intra-regional trade promotes strong dynamic comparative advantage and the creation of regional and continental supply chains in addition to attracting FDIs and nurturing nascent industries for industrial growth. He said for Africa, being a continent of 55 countries with different regulations and financial systems, the quickest way to promote regional integration is to have an arrangement that constitutes the framework for breaking the structural barriers created by the colonial ambassadors.
Oramah noted that the need for the framework explains why the African Continental Free Trade Area Agreement (AFCFTA) is a welcome development. He recounted how AFCFTA was founded on March 21, 2018 at the Kigali convention centre, noting that 44 countries out of 55 signed the agreement that day and pledged to support the initiative.
In the meantime, he shared the specific objectives of the agreement, among which were progressive elimination of tariffs and non-tariff barriers, enhancing the efficiency of customs, trade and transit among others.
He said by signing the AFCFTA, Nigeria stands a chance of enlarging FDI inflows from 3 billion dollars and also derive growth in exports, experience increase revenue and employment rate among others.
He then commended the chairman of the occasion, Dr. Olowu and his team at CIB Nigeria as well as the Centre for Financial Journalism for the excellent work they have been doing in sensitizing the Nigerian financial community about the trade agreement.
Posted By Oyedeyi Samson
