Infrastructure investment and structural reform will shape Africa's future - and technology will play a key role

%2017 %12 %12

 

Following a sharp slowdown over the past two years, recovery is now underway in Sub-Saharan Africa. GDP growth in the region is expected to strengthen to 2.4 per cent in 2017 from 1.3 per cent in 2016, according to the October edition of Africa’s Pulse, a bi-annual analysis conducted by The World Bank.
Nigeria and South Africa, the continent’s two largest economies, are leading the rebound and, looking further ahead, The World Bank forecasts that growth across Sub-Saharan Africa will rise to 3.2% in 2018 and 3.5% in 2019. This is encouraging news. But growth is patchy across the region, remains well below the pre-crisis average and is “weak in several key dimensions” cautions World Bank Chief Economist for Africa, Albert Zeufack - notably low investment growth and falling productivity growth. “This calls for more sweeping structural reforms that can help ensure that economic growth is anchored on a strong footing,” he says. His comments are echoed by Akinwumi Adesina, President of the African Development Bank, quoted in a recent article by The Economist, who observes: “It requires a major effort to fix structural problems as well as infrastructural problems in Africa.”
How to tackle structural and infrastructural barriers to trade, both within Africa and between Africa and the rest of the world, will be at the heart of the debate at the upcoming TOC Africa conference in Durban, 5-6 December. That includes both hard infrastructure – the power, telecommunications and transport networks needed to make industry and trade work efficiently – and the soft infrastructure in the shape of the paperwork and processes that accompany every physical goods movement.
As Ziad Hamoui, Ghana National President for the Borderless Alliance and a speaker at TOC Africa, observes in a recent editorial on LinkedIn: “By improving the local and regional transport infrastructure, enhancing governance and accountability, creating a more enabling business environment for local companies to grow, prosper and compete and, most importantly, removing the multiple barriers to regional trade and transport that plague the continent, Africa will begin to increase its share of inter and intra-regional trade.”
In terms of removing trade barriers, the African Union’s Continental Free Trade Area, designed to boost intra-Africa trade, and the World Trade Organization's Trade Facilitation Agreement, which came into force in February 2017, are both significant steps towards simplifying, modernising and harmonising export and import processes.
Technology will have a significant role to play in realising the benefits of such reforms. Collaborative e-platforms, mobile money transfer and financing solutions like M-Pesa, real-time remote tracking technology and a host of new cloud and smartphone applications can help “reduce some of the costs and frictions of doing business in Africa” – as The Economist puts it.
But technology is not a panacea and does not negate the need for serious investment in hard infrastructure – the seaports, road and rail transport systems connecting African nations with each other and the rest of the world. Harvard professor Calestous Juma argues that “infrastructure is both the backbone of the economy and the motherboard of technological innovation” and that “African countries need adequate infrastructure to realize their full potential.”
Congestion and poor productivity in ports and hinterland networks cost Africa dearly in more ways than one. Addressing this mammoth challenge will require huge funding and expertise that governments alone simply cannot provide. So, creating the right structural framework for private sector investment by African and overseas interests will be crucial. FDI in Africa has dropped since the financial crisis and this clearly needs to be addressed.
The recent news of DP World’s Somaliland port and freezone investment is one encouraging example and attendees at TOC Africa will hear first-hand from a range of private sector investors across the continent. That includes global and regional terminal operators such as DP World and ICTSI, private developers and operators of port logistics clusters and corridors including South Africa’s Dube Tradeport, Maputo and Walvis Bay Logistics Corridors, plus investors including veteran private equity fund management African Infrastructure Investment Managers and new online investment platform Afriscaper.

TOC Africa runs 5-6 December at the ICC Durban, South Africa.
TOC Africa
5 – 6 December 2017
Durban ICC, South Africa
www.tocevents-africa.com

 

TOC Worldwide

 

The magazine SEA has been published since 1935
International business magazine JŪRA MOPE SEA has been published since 1999
The first magazine in Eurasia in the four languages: English, Chinese, Russian and Lithuanian


Address:

International business magazine JŪRA MOPE SEA
Minijos str. 93, LT-93234 Klaipeda, Lithuania
Phone/Fax: +370 46 365753
E-mail: news@jura.lt
www.jura.lt

 


Publisher:

Ltd. Juru informacijos centras


The magazine JŪRA has been published since 1935.
International business magazine JŪRA MOPE SEA has been
published since 1999.

ISSN 1392-7825

2017 © www.jura.lt