The World Bank has identified intra-African trade and digitalisation as key drivers of economic transformation on the continent, and urged that bottlenecks are removed.
The Bank said the two sectors offerred hopes for the continent’s transformation as they could provide significant opportunities for increased competition, Foreign Direct Investment (FDI) flows, and economic diversification.
This is in the Bank’s 2023 Country Policy and Institutional Assessment (CPIA), which was launched in Accra on Monday, July 16, 2024.
Speaking at the event, Dr Andrew Dabalen, Chief Economist, African Region, World Bank, asked African governments to create a conducive environment for the private sector, including affordable loans to the private sector to enhance productivity and expand access to market.
“Trade within Africa is low in general; only 20 per cent of African exports go to another African country, but whatever is traded is mostly manufactured, so, in general, it’s likely to be much more job creation than extractives,” he said.
“If the composition of trade changes, where the region could trade a lot more with itself, this could be a major engine of growth for the private sector,” the World Bank Chief Economist noted.
Regarding digitalisation, Dr Dabalen, stated that while 80 per cent of Africa was covered by 3G or 4G technology, only 22 per cent used it for productive use.
That, he said presented enormous potential, particularly for Small and Medium-sized Enterprises growth.
He, therefore, called for complementary investment to improve electricity access, and regulatory frameworks to engender increased productive use of digital technologies on the continent.
Mr David Ofosu-Dorte, Senior Partner, AB & David, a legal entity for businesses and projects in Africa, asked the private sector to come together to push for reforms that would make them thrive.
In an interview with the Ghana News Agency, he encouraged that instead of the private sector complaining, the players should form strong alliance with politicians to stimulate workable policies.
“Businesses around the world lobby for policies to be made, and that’s what they have to do here, rather than leaving it to the public sector, who would make a policy, which may end up being harmful to businesses” he said.
Mr Ofosu-Dorte recommended enhanced partnership between governments, the African Continental Free Trade Area (AfCFTA) Secretariat, and the private sector, to address the bottlenecks of regional and digital trade.
Abdoulaye Ndiaye, an Associate Professor of Economics, Leonard Stern School of Business, called for strengthening of regional bloc trade to deepen intra-continental trade by integrating agreements.
“There are a lot of competing agreements, like the African free trade zone, ECOWAS bloc, and there’s the need to strengthen those regional blocs and digitalisation can help a lot,” he said.
Particularly, he called for a seamless connection of ports and custom systems through digital tools, which he said would make trading of goods and services more efficient on the continent.
The Country Policy and Institutional Assessment report highlights policy trends, best practices, and key changes in Sub-Saharan Africa, covering 39 countries eligible for support by the International Development Association (IDA).
It assesses elements of policies and institutional arrangements within a country’s control for promoting sustainable growth and poverty reduction using four key indicators, which saw Africa’s score remaining at 3.1, just as in 2022.
The indicators are, economic management, structural policies, policies for social inclusion and equity, and public sector management and institutions.
