Africa Business Communities
Biggest impact on Africa’s growth due from infrastructure investments – Afreximbank President

Biggest impact on Africa’s growth due from infrastructure investments – Afreximbank President

The biggest impact on Africa’s growth prospects will come from investments in large infrastructure projects, Jean-Louis Ekra, President of the African Export-Import Bank (Afreximbank), has said.

In an address at the Stanford University Africa Business Forum 2015 organised in Stanford, United States, Mr. Ekra said that that assessment was based on the huge infrastructure gap that existed on the continent relative to the rest of the world.

He welcomed that positive developments that had seen the emergence of some regional champions across Africa, including entities like the Dangote Group of Nigeria, MTN of South Africa, Olam, Ecobank, Econet, UBA, Kenya Airways, Ethiopian Airways, El-Sewedy Electric of Egypt, and ShopRite of South Africa.

In his view, those companies were poised to play the kind of role that companies like Samsung, Daewoo and Hyundai of Korea were currently playing in the global marketplace.

The President noted that despite noticeable improvements in the socio-political environment in Africa in the last decade, risks to sustained growth remained a key challenge on the continent. As a result of the prominence of that risk perception, the cost of financing for African enterprises had remained relatively high.

He also pointed out that although considerable effort had been made to increase economic integration in Africa, the pace of integration had been very slow, in spite of its many benefits, which include access to larger markets for investors and reduction in transaction costs, such as those associated with regional infrastructure projects.

Africa’s level of industrialization also remained very low, continued the President. The result was that the bulk of the continent’s products were still being exported in raw format, with little or no local value addition. As a consequence, African economies were not sufficiently hedged against external shocks arising mainly from commodity price fluctuations.

Moreover, the cost of doing business for SMEs in most African economies was very high, stated Mr. Ekra. According to him, governments are yet to improve the legal, legislative and regulatory environments under which such businesses operated.

The Stanford University Africa Business Forum 2015 was organized by the University’s Graduate School of Business.

afreximbank.com

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