28 Nov 2022

African banks have committed to fund projects with prospect to not only push industrialisation agenda, but also add value in diversifying the continent’s economy.

The continent, through African Union (AU), was of recent heavily engaged through its member states on the pursuit to diversify the economy and reduce the dependency syndrome on importation of goods and services.

Therefore, the recently concluded Niamey, Niger; Extraordinary AU Summit on Industrialisation, Economic Diversification and Continental Free Trade has addressed the challenge of lack of access to funding, which has been the continent’s hindrance to pushing agendas of such magnitude.

Through the summit’s deliberations, it was apparent that over the years, reliance on funding from international financiers had not only provided the continent with the much needed finance to advance its projects, but had equally led to debt that worsened the situation.

Notwithstanding the challenging environment, the quest for Africa to unionise its development agenda, establishment of a unifying body in the AU had been identified as a vehicle that would propel Africa towards establishing a sustainable and export-driven economy.

While reeling in poverty, African countries were in an effort to get off the ground financial deals with international markets that more often than not resulted in debt with high interests and other attachments hindering financial freedom and progress.

Thanks to the African Export-Import Bank (Afreximbank) and the African Development Bank, among others partners, the continent seems to have made a breakthrough towards unionising, industrialisation and economic diversification.

Sharing the insights of Afreximbank, the bank’s president, Professor Benedict Oramah reaffirmed continued financial support in the form of a grant to the African Union Commission on the Africa Continental Free Trade Agreement (AfCFTA) secretariat and other organs of AU.

He said Afreximbank was grateful for the support and collaboration with AU and member states.

He said the bank supported initiatives and programmes that directly addresses the needs of the ‘African populace as espoused in AU’s Agenda 2063: the Africa we Want’.

Prof. Oramah said the bank would continue to support the implementation of AfCFTA, adding that the Afreximbank was creating a banking system that could serve Africa better.

“We do these because we are convinced that Africa’s economic development prospects will be defined by the extent of control the continent wields over its financial system.

We understand that it is access to and control of our capital that will define our future,” he said.

Prof. Oramah said Afreximbank was at the forefront of the drive to transform the structure of the African trade through aggressive support for industrialisation and export manufacturing.

“We are working with various African governments to develop and expand Industrial Parks (IPs) and Special Economic Zones (SEZs) to deal with infrastructural constraints to industrialisation,” he said.

As such he said projects totalling about US$ 900 million were being implemented in 10 Africa countries, which included Malawi and Cote d’Ivoire, adding that discussions in relation to creating industrial parks in DRC, Zambia, Rwanda, Kenya and Botswana were ongoing.

He added that the automobile industry was also presenting a good opportunity for building regional value chains and driving industrialisation, therefore Afreximbank was working in collaboration with African Association of Automotive Manufacturers, the AU and AfCFTA secretariat to promote emerging automotive value chain in Africa.

For her part, ADB vice president Ms Hassatou Diop N’sele has, on behalf of the bank’s president, Dr Akinwumi Adesina indicated that AfCFTA was the continent’s pathway to prosperity, adding that for the continent to unlock its potential it must not only trade, but turn into an industrialisation zone.

She said Africa’s wealth must no longer depend on exporting raw materials, but rather divert focus to selling finished value added products.

“The door to poverty is from export of raw materials and the highway to wealth is industrialisation,” she said.

Ms N’sele said the success of AfCFTA would depend on reducing Africa’s infrastructural deficits.

She said Africa had abundance of natural resources as well as an extensive blue economy that was to be rapidly industrialised.

Ms N’sele also added that the future of electric cars in the world was dependent on Africa.

She said the continent had an extensive deposits of minerals such as lithium-ion, cobalt, nickel and copper to support such a project.

“The size of electric vehicles market has been estimated to reach US$7 trillion by 2030 and US$46 trillion by 2050. Building precursor facilities for lithium-ion batteries in Africa will be three times cheaper than in other parts of the world,” said Ms N’sele.

She added that Africa imported over 70 per cent of its pharmaceutical products, with only one per cent of vaccines produced locally.

“The African Development Bank strongly supports the Africa 2030 pharmaceutical vision of the AU, with the goal of increasing Africa’s share of pharmaceutical production to up to 55 per cent by 2050,” she said.
In that endeavour, Ms N’sele said ADB would be investing US$3 billion to support pharmaceutical manufacturing in Africa.

To further boost availability of electricity in the continent, she said the bank was implementing a US$20 billion desert-to-power initiative to develop 10 000 megawatts of solar power across 11 countries. ENDS