ITC Executive Director opens flagship Export Actors Forum, Benin.
The African continent has seen impressive growth over the past decade but faces big challenges in order to keep developing at the same rate. “As the world moves into another major crisis Africa has the means to weather the storm. This you must do for yourself” said ITC Executive Director, Patricia Francis, jointly opened the flagship Export Actors Forum (EAF) on the 5 December in Cotonou, Benin. She outlined the good work done to date, the challenges to the region and ITC’s role in overcoming these.
Summarising the challenges to be overcome, Ms. Francis noted how African non-oil and gas exports today only represent 1% of global trade, this number being 4% if including the oil and gas sectors. She also pointed out how trade within North America is approximately 40% and intra-Western European trade reaches around 60% but intra-African trade is roughly only 11%. Access to finance in Africa is also an issue with the cost of capital being in excess of 20%.
In terms of trade facilitating infrastructure, Ms. Francis noted that only 35% of the continent has access to electricity and that African markets remain fragmented with borders between countries difficult to cross. At the individual level, Africans also face challenges in the form of food insecurity with 70% of rural poor with insufficient nourishment and 90% of crops being grown without irrigation. Water is also a concern with half of sub-Saharan Africa not having access to clean water.
But despite these notable challenges, and the additional issues caused by the global financial crisis, Ms. Francis expressed a view that the unprecedented growth seen in the continent over the past decade should continue, pointing at figures estimating middle income households to exceed 87 million by 2015 and that by 2040, Africa should have the world’s largest workforce of 1.1 billion people. She also noted that, Foreign Direct Investment in the continent for 2010 was a sizeable USD 554 billion and that sub-Saharan African growth is estimated to be 5.5% for 2011, with a number of countries exceeding the 7% growth marking the threshold for achieving major and lasting inroads to eradicating poverty.
In order to attract investors – both African and from outside the continent – the Executive Director emphasized the importance of having a stable macro-economic environment, effective and business friendly government, a stable political environment, good physical infrastructure, and an employable human capital.
ITC’s role in sub-Saharan Africa has been a pleasing one, said Ms. Francis, with the Programme for Building African Capacity for Trade (PACT II) taking a lead in working with the Regional Economic Commissions (RECs), such as the Economic Community of West African States (ECOWAS) which is the REC covering Benin. The Executive Director noted how ITC is proud of SMEs’ increased knowledge about export competitiveness in the West African States and the creation of efficient and sustainable vehicles for trade development and promotion, as well as the increased recognition by other funding partners of the need to invest in the region via partnerships with RECs.
Also opening the EAF were the Minister of Industry, Trade and SMEs for Benin, the Chairman of the Consultative Group of ECOWAS Export Actors Platform (EAP) and the President of ECOWAS.