Posted on July, 22, 2021 at 11:16 pm
African countries continue to face substantial financing gaps as they take on projects of all sizes in pursuit of development. To tackle the slowdown in foreign direct investment since the onset of the pandemic, some African countries are actively courting their diaspora and looking for pockets of cash-rich businesses around the continent.
Each country is on its own development trajectory. However, continental and regional initiatives, such as the African Continental Free Trade Area (AfCFTA), are being harnessed as broad-based wealth-creation vehicles.
The AfCFTA, which took effect on January 1, aims to create an integrated continental market by reducing trade barriers among its 54 signatory countries. The trading pact is still under implementation due to the substantial undertaking involved in integrating a massive economically fragmented continent. The AfCFTA Investment Protocol, one of the many legal instruments that make up the agreement, is still under negotiation.
Even at this stage, the benefits of the agreement are undeniable as institutional capabilities designed to alleviate hurdles to economic development are being deployed at a record pace. It will take some time to work through all of the practical and regulatory issues that arise in cross-border trade and investments.
Fortunately, the challenges of implementation have not dampened the appetite of Africa-based businesses to expand into other African markets. This trend can be seen in recent large investments going into refineries and pipelines, manufacturing facilities, logistics, telecommunications and technology. Partial backing for such projects has come from the global financial and investor community.
Africa's technology industry has been a lubricant in institutional building in all corners of the continent. Africa's top ten economies, making up a combined GDP of over USD two trillion, are already embracing blockchain technology to build capabilities in agriculture, logistics, procurement, education, banking and other sectors.
Source: The East African