The African Continental Free Trade Area, AfCFTA, will buoy investment opportunities that are abound in Nigeria and Africa post-COVID-19, Philip Ikeazor, former Chief Executive Officer of Keystone Bank Limited and Director, Greenwich Merchant Bank said on Saturday at Cranfield Nigeria Alumni virtual business webinar.
Ikeazor in his presentation titled ” Growth Sectors and investment Opportunities in Africa Post Pandemic” made a new case for AfCFTA and highlighted investment opportunities post-COVID in Nigeria and Africa as a whole.
According to erstwhile CEO of Keystone Bank, investment opportunities abound in the areas of Agriculture, Mining, Healthcare, ICT/Data Storage/Cloud Infrastructure, Retail & Logistics.
“There are tremendous opportunities in Agriculture for export, Mining, Healthcare, ICT/Data Storage/Cloud Infrastructure, Retail & Logistics and others,” Ikeazor said.
He called on African leaders to create the enabling environment for investments to be attractive and thrive in the continent. “Investments will be attractive in Countries that have passed reforms to make establishing and doing business easy,” he noted.
Ikeazor says political will from African leaders is the only thing that will make AfCFTA succeed fully, “the countries should jointly invest to bridge the infrastructure gap, why no railways running across west Africa or power transmission lines to carry excess power generation to other regions. Intra Africa trade is only 15 percent compared the trade within the EU at 60 percent,” he affirmed.
According to him, the legal systems will have to be strengthened to be effective and efficient to attract Investments and make businesses successful to grow the economy and related government revenues. “Focus on export is key for emerging economies if they intend to improve currency exchange rates which is ultimately about balance of trade payments,” he added.
Ikeazor further explained that improved infrastructure and legal systems/efficient foreclosure laws will encourage more investments in the finance and insurance industries to support access to finance for vibrant African entrepreneurs.
His advice is coming on the heels of recent calls by President Paul Kagame of Rwanda that Africans should invest in one another, “the best thing leaders, not only Presidents or Prime Ministers, but people playing leadership in different roles will be to invest in one another or at least thinking about one another’s well-being and do what we have to do to create a stable and sustainable African continent.
The Rwandan President advised African leaders to capitalise on the African Continental Free Trade Area, AfCFTA, which presents a major opportunity for African countries to bring 30 million people out of extreme poverty.
AfCFTA is a free trade area founded in 2018 and trade commenced January 1, 2021. It was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations to unite 1.2 billion consumers across a $2.2 trillion market, estimated to reach 46.7 trillion by 2030.
It also seeks to boost intra-Africa trade in merchandise and services by progressively eliminating tariff and non-tariff barriers over a wide range of goods and improving customs.
Ikeazor who expressed his gratitude that Nigeria is no longer in recession while reacting to the current International Monetary Fund, IMF, Gross Domestic Product, GDP, growth report on Nigeria said its not yet over until the nation is lifted out of poverty, fiscal interventions fixed and GDP growth rate climbs to between 5 percent to 7 percent, a better investment climate may not exists.
“What is your non-oil export level and exchange rate at the moment, the exchange rate is a function of balance of payment, the current GDP growth is not good enough to lift Nigeria completely out of poverty or make more people live above the poverty line. its clearly not where it should be , if we can fix the fiscal interventions and try and get ourselves to 5 percent to 7 percent GDP growth level, then the investment climate would be better,” he added .
He noted that the level of the GDP growth being lower than the rate of population growth and lower than inflation at 17.9 percent current rate won’t solve any problem.
The IMF last week said the Nigerian economy has started to gradually recover from the negative effects of the COVID-19 global pandemic. Following sharp output contractions in the second and third quarters, GDP growth turned positive in Q4 2020 and growth reached 0.5 percent (y/y) in Q1 2021, supported by agriculture and services sectors.
The global lender also noted that inflation slightly decelerated in May but remained elevated at 17.9 percent, owing to high food price inflation.
Ikeazor called on aspiring entrepreneurs to take advantage of the investment opportunities in the export sector especially in agriculture like in Ghana. “I believe there are still opportunities for young investors to grow some of these stuffs, meet the standards and export these products and compete on a larger scale, it goes beyond supplying few Nigerian Restaurants and shops, you need to compete on a higher scale,” he said.
“On export, we would like to have proper data to confirm what we have done in export, I’m telling you that anybody who is in the UK now go to Tesco, Sainsbury’s, Co-op Food and other Supermarkets and look at the food and vegetable session you will see several products from Morocco, Senegal , Kenya, Ghana and South Africa, you will see their products there. So, where are the Nigerian products, these products there are earning foreign exchange for these countries,” Ikeazor added.