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The world has recently seen the signing of the largest free trade area in the world by African government leaders in Kigali, Rwanda. The African Continental Free Trade Area (AfCFTA) is the largest free trade area in terms of the number of countries involved.
The African continent comprises 55 countries, with 55 strange currencies (some have chosen to adopt the dollar), 55 regulatory frameworks – and 55 different sets of paperwork. This scenario means doing business on the African continent can be difficult for both foreign and domestic investors. However, economists and academics agree that as soon as AfCFTA comes into effect, it will bring major economic benefits to the continent, its citizens and its businesses.
But what does this mean for African companies and international investors? ? What opportunities does it offer our industry?
The new commercial zone gives an extra boost to the infrastructure construction program. A researcher from the Cape Town Trade Law Center, Talkmore Chidede, argues that "AfCFTA's goal of boosting intra-African trade can not be achieved without adequate trade-related infrastructure." [19659002] This is important given that the African continent has serious infrastructure deficit. A 2009 World Bank report entitled Africa's Infrastructure: A Time for Transformation estimated that $ 93 billion was needed each year for the continent to fill that gap. More recently, Kalilou Traoré, commissioner for the promotion of industry and the private sector of the Economic Community of West African States, has estimated $ 100 billion African governments, the private sector, the AU and its partners. deliberate program to create the economic infrastructure necessary to facilitate economic integration.
The construction industry should play a leading role in the development of this indispensable infrastructure. The rapid development of infrastructure, especially regional megaprojects on the continent, is urgent and critical. Infrastructure is a catalyst for economic growth, competitiveness and integration. An example is the efficient port and transport infrastructure, which facilitates the movement of goods and people between different economies. Modern, world-clbad infrastructure will accelerate the economic integration envisaged by the free trade area, ensuring that trade barriers are eliminated on paper and physically.
With this understanding, the AU, in partnership with the United Nations Economic Commission for Africa, the African Development Bank and the Nepad Planning and Coordination Agency, among Other key players, have developed a targeted program to address the challenge of infrastructure – the Program for Infrastructure Development in Africa (PIDA). The program is "a continental initiative to help bridge the infrastructure gap that is severely hampering Africa's global competitiveness."
One of the general strategic objectives of PIDA is to "enable Africa to finally build" the common market. "By improving access to regional and continental infrastructure networks , countries will meet the demand for infrastructure services and boost competitiveness by increasing efficiency, accelerating growth, facilitating integration into the global economy, improving the level of
In my opinion, construction and related industries should engage in a continuous and urgent manner the various governments and multilateral institutions that are responsible for providing the necessary infrastructure. This should be done in order to understand development priorities and needs, especially scale, impact and bankability, and in this context PIDA has identified key infrastructure infrastructure requiring urgent attention: transport, energy, information and communication technologies and transboundary water sectors. These sectors are the backbone of industrial development and offer significant potential for economic growth and development.
Three of the priorities provide abundant opportunities for cement industry players such as PPC. However, they will not materialize if the industry is not proactive and strategically oriented to exploit these opportunities.
With the implementation of various infrastructure projects, it is likely that demand for CPD products and services will increase. The industry can not afford not to want when that happens. So it's my badertion that, informed by solid and credible market information, the industry should make the necessary investments before the demand skyrockets. It is imperative that we begin now to form the critical partnerships needed so that when the time comes, we are well positioned to provide a world-clbad infrastructure.
Investments such as those made by PPC in various African countries, Rwanda, Democratic Republic of Congo, Ethiopia, Zimbabwe and Botswana will greatly contribute to strengthening cement production, an essential and necessary product in any major project. ;infrastructure. The choice of countries in which the CPP invested was deliberate. Not only do they have strong potential domestic demand for cement and related products, but they are strategically positioned to serve neighboring countries in areas where they are located.
Importantly, we do not see ourselves as mere producers of cement. we see ourselves as playing a greater role in contributing to the growth and development of all our chosen markets and the continent as a whole; to foster meaningful collaboration both inside and outside our organization.
Many of the 55 African countries are small, with less than 20 million inhabitants and less than 10 billion dollars in savings.
Their infrastructure systems, like their borders, are reflections of the continent's colonial past, with roads, ports and railroads built for resource extraction and political control, rather than to link the territories economically or socially. Most of them would fight to build the critical infrastructure by themselves and require partners driven by the same goals.
A proactive approach involving delivery-oriented partnerships will change the game as it will bring together small and large economies to deliver mega regional infrastructure projects. The essential advantage of the regional infrastructure is the formation of large competitive markets instead of the current collection of small, isolated and ineffective. There is no doubt that the industry will benefit during the construction phase as large competitive markets will result from integrated economic development.
The most obvious example is that of logistics ports that will facilitate the movement of goods on the continent. logistics costs. Initiatives such as the North-South Corridor and the Southern Africa Development Community (Sadc) Infrastructure Master Plan offer tremendous opportunities for public-private partnerships.
Public-private partnerships are recognized as helping governments with gaps, while supporting regional integration. For example, there is a funding gap of $ 100 billion for Sadc's infrastructure plan. The North-South Corridor project, designed as the area between Durban and Dar es Salaam, is equally ambitious and expensive. It comprises 157 projects and includes 59 road projects, 38 railway projects and six bridge projects (part of PIDA).
ALE is a unique rules-based framework for doing business and investing in Africa. That's precisely what the continent needs right now. The harmonization of trade and investment rules, the overcoming of constraints related to small economies, the realization of economies of scale and the integration of African economies are the objectives. of the free trade zone.
However, this can not be achieved the economy is mobilized, engaged and concentrated in a unique way.
• Ramafoko is the director of international operations for the PPC
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