Can the new Nairobi International Finance Centre (NIFC) compete with Johannesburg and Dubai to help finance trade and industry in East Africa ... and beyond? Acting CEO Oscar Njuguna believes that there is plenty of room for everyone.
The value of deals under discussion at the Africa Investment Forum (AIF) has jumped more than 50% from last year as the continent gears up to adopt the African Continental Free Trade Area (AfCFTA) next July, African Development Bank President Dr Akinwumi Adesina said at the forum.
A total value of $67b in deals is being discussed, composed of 59 transactions, compared with $43 billion in 2018, he said. Energy accounts for the biggest single share of the deals, followed by water and sanitation. Much of the investment, which involves 29 countries, will go to low income, fragile states, Adesina said.
- Trans-national highways, port and rail infrastructure is crucial, he said. “If investors can’t get there, they won’t invest there.”
The event at the Sandton Convention Center, which runs through Wednesday, is being attended by the presidents of South Africa, Rwanda, Ghana and Mozambique.
Financing Africa’s development needs will require between $200 billion and $1.2 trillion yearly, according to the African Development Bank. About $130-$170 billion a year is needed for infrastructure, the bank says.
Not everyone is singing from the same hymn sheet.
Since August 2, just three months after finally signing up for AfCFTA, Nigeria banned the movement of goods through its land borders, ostensibly to prevent the smuggling of commodities such as rice, tomatoes and poultry.
The closure will last at least until the end of January.
Nigeria fears that it could become a dumping ground for goods from African countries with stronger manufacturing bases.
- Nigeria’s agriculture minister Alhaji Mustapha Baba-Shehuri said at the weekend that the border closure would have a positive impact on the country’s social and economic development.
Landré Signé and Colette van der Ven of the Brookings Institution in Washington have argued that Nigeria’s move breaches not only its AfCFTA commitments but also its obligations as a member of the Economic Community of West African States and the World Trade Organization.
- “Nigeria has signed a commitment,” said Professor Benedict Oramah, president of the Africa Export-Import Bank, at the opening AIF press conference. “Nigeria will not take its commitment lightly.” On July 1, 2020, when the free trade agreement comes into force, “most borders will be open,” he predicted.
- Africa is currently made up of “fragmented markets,” and can’t negotiate with the bigger economies unless it comes together, Oramah said. “Unless we have an integrated continent, Africa will continue to be underdeveloped. We will remain on the periphery.”
“Even in marriages you have challenges,” Adesina said of the border closure.
Customs services will have to work better across Africa with zero corruption for the free trade agreement to function, he added.
Bottom Line: The African free-trade train will soon depart. Nigeria needs to decide if wants to be on board.
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