Way forward for Africa’s economy: We must move from rhetoric to action says Osinbajo at Global Patriot Newspapers’ Conference; Hails Publisher/Editor-in-Chief

KEYNOTE REMARKS BY HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, VICE PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA, DELIVERED BY LAOLU AKANDE, SENIOR SPECIAL ASSISTANT TO THE PRESIDENT ON MEDIA AND PUBLICITY, OFFICE OF THE VICE PRESIDENT AT THE US-BASED GLOBAL PATRIOT NEWSPAPERS’ 2022 VIRTUAL INTERNATIONAL CONFERENCE ON AFRICA’S ECONOMY THEMED: ‘AFRICA’S ECONOMY: THE WAY FORWARD’ ON THE 22ND OF OCTOBER, 2022

PROTOCOLS

It gives me great pleasure to be here with you today as the Special Guest of Honour at the 2022 International Conference on Africa’s Economy organized by Global Patriot Newspaper, with the theme: ‘Africa’s Economy: The Way Forward.’

I am told that this Conference was organized by the US-based Global Patriot Newspapers to interrogate the economic challenges confronting the African Continent and proffer possible solutions to them.

But first let me commend the unrelenting patriotism of Mr. Simon Ibe, the Founder and Publisher of the Global Patriot Newspapers, who with his hardworking team are also the organisers of this conference.

I have been particularly struck by his enthusiasm for developmental issues and his overall diligence in all he does matched with an altruistic public spirit which serves the common good. Such is to be emulated here at home and abroad and I commend such spirit to all of our people.

Talking about the theme, especially -the Way forward for the African Economy, I wish to speak on how we can explore the issue around the Africa Continental Free Trade Agreement (AfCFTA).

As you all are aware, the objective of the AfCFTA is to create a single market for goods, and services, facilitated by the movement of persons in order to deepen the economic integration of the African Continent.

With a population of about 1.3 billion people, by leveraging the many opportunities provided by AfCFTA, we can provide more jobs for our teeming youth population, create the Africa we want by significantly boosting intra-Africa trade, in particular, trade in value-added production and trade across all sectors of Africa’s economy. We can truly then transform our continent into a global powerhouse.

In many ways, Africa is the last frontier for economic development and it has the potential to be a global growth pole. The Africa Continental Free Trade Agreement (AfCFTA) is the leverage to benefit our individual countries and the whole Continent.

Indeed, with an estimation of potential income gains in Africa of up to $450 billion by 2035, it is and can be a game changer for African economies.

This means a whole lot for different sectors of our economies. Africa must unlock its great potential in different sectors.

Already our young people are showing us that it can be done. Between 2016 and now, and in the middle of two recessions, Nigeria now has at least six unicorns – that is tech companies with a valuation of over $1 billion.

It does show you how much energy and how much traction the whole technology space is gaining. This energy can be replicated across the board in every area of our economy through the AfCFTA.

But the challenge of rebuilding our economies is a task that we must undertake with an urgent sense of purpose. The AfCFTA is expected to bring about a number of benefits to producers, consumers and countries alike. The hope is that African producers would benefit from access to cheaper inputs and intermediate goods as well as larger markets for their products while consumers have access to cheaper goods and a broader variety of products.

And we need to be proactive to reap the great benefits of participating effectively in the AfCFTA. African economies can experience gains from trade and further benefit from removing the onerous requirements of belonging to multiple and overlapping trade agreements within the continent.

Going by the estimation of the UN- Economic Commission for Africa, with full liberalization, intra-Africa trade is expected to increase by 52.3% as compared to a baseline scenario without AfCFTA by 2022. With such an increase, African economies individually as separate countries, and the continent as a whole, will benefit from the growth that often accompanies increased trade flows.

Recently, at the end of September, Rwanda reportedly exported its first consignment of goods under the African Continental Free Trade Area (AfCFTA) agreement to Ghana on Friday, September 30. The first consignment of coffee from Igire Coffee Limited was flown to Accra, marking the formal start of preferential trading under the AfCFTA agreement.

It is just a glimpse of the limitless opportunities for the industrialization of Africa that is possible and for which AfCFTA can be the vehicle. So, governments across the continent must take the right policy actions to actualize them. Such actions include the protection of local industries and improving value chains.

An important objective of the AfCFTA is to overcome the economic fragmentation of the continent by bringing the regional economic blocs together in a common arrangement. This being the case, African countries should look to negotiating trade treaties with other parts of the world on the basis of AfCFTA rather than through arbitrarily designed regional blocs. African countries should not allow themselves to be lured into arrangements which do not serve their long-term and overall development objectives.

While the global COVID-19 pandemic exposed the vulnerability of our healthcare system, it also demonstrated how interconnected and interdependent we all are as a continent. This is why Africa’s post-COVID-19 economic recovery trajectory must also include increased social protection for all so that we can effectively tackle the issues of poverty on the continent.

The AfCFTA is a unique opportunity to consolidate Africa’s enormously large market, which will create and recover millions of jobs, reduce Africa’s import dependency, boost intra-Africa trade and exports; and strengthen intra-Africa cross-border ties and trade relations.

For instance, with the agricultural sector accounting for about 23% of the continent’s Gross Domestic Product (GDP), the sector is regarded as the key to the overall productivity of the African economy. This is why we must improve our agricultural productivity; we must produce our own food and reduce import dependency for key commodities.

We must also adopt policy actions to create an environment in which businesses can thrive, starting with the adoption of the right type of macroeconomic and industrial policies. It is the reason why one of the crucial reforms the Buhari Administration has embarked upon since 2016 is the Ease of Doing Business reforms through the Presidential Enabling Business Environment Council PEBEC-which I chair.

In fact through the Ease of Doing Business Reforms, PEBEC, has since 2016 implemented 160 reforms. These include digitization of company registration, tax payment, and the visa-on-arrival process.

There are also Legislative reforms with the active collaboration of the National Assembly which includes The Secured Transaction in Movable Asset Act 2017 and the Credit Reporting Act, 2017.

These two Acts enable MSMEs to enjoy financial inclusion and facilitate access to credit by legalizing the use of movable assets as collateral, improving transparency and enhancing risk management in credit transactions. To date, over 700 billion Naira worth of assets have been listed on the National Collateral Registry. This is important because now we have a register of collaterals.

Also, there is the new Companies and Allied Matters Act, containing extensive business facilitation provisions and the Omnibus Bill which would codify Executive Order 001 on Transparency and Efficiency.

Justice sector reforms under PEBEC include the establishment of small claims courts for the settlement of commercial disputes under N5million

Lagos State was the first to establish this in 2018 and today, over 4,000 suits have been heard in 19 Courts across the State, significantly reducing the cost and time of commercial litigation for MSMEs. Kano, Ogun, Edo, Ekiti, Nasarawa and Jigawa States Judiciaries have also commenced operations, with Bayelsa, Kaduna, Sokoto States and FCT Judiciary on the verge of launching their own Small Claims Courts in the near future.

Between 2016 and 2019, Nigeria moved up 39 places in the World Bank Doing Business rankings and was twice named as one of the top 10 most improved economies in the world.

Also, one of the ways to increase the competitiveness of African industries is to develop and deepen regional value chains wherein production systems starting from conception and design right through to supply of raw materials, processing, transport, storage, marketing, and sales take place within our countries and continent.
Beyond leveraging opportunities provided by AfCFTA, improving infrastructure is one of the key areas that Governments and leaders on the continent must focus on.

We all need to be proactive if we are to participate effectively in the AfCFTA. This will entail improving our ability to produce and trade competitively in goods and services which is why the Federal Government of Nigeria is investing heavily in power, road, rail and port infrastructure projects. Our commitment as a government to the Infrastructure Corporation of Nigeria, which we launched in 2021 with an initial seed capital of N1 trillion, is an urgent response to our yawning $300 billion infrastructural deficit.

This follows an N8.9 trillion investment in infrastructure in the last five years, covering rail, roads, power and broadband connectivity, all of which were sustained and accelerated despite the interruptions of the COVID-19 pandemic.

It is also why we are taking active steps to improve the business environment and to facilitate trade across our borders including through the implementation of the National Trading Platform or Single Window Project.

Like I said recently during the 3rd Ministerial Performance Review Retreat of the Federal Government of Nigeria, we must focus on value addition and productivity in our economy. This is well articulated in our Government’s Medium-Term Economic Plan (2021-2025). In doing so, we loosen the generalised restrictions on trade. This applies to African economies too.

Blanket import restrictions dampen economic activity because many items that might be needed in the manufacturing process might be affected with a consequent negative impact on value addition in the economy.

But the effort of governments must succeed within deliberate collaborative frameworks that allow for seamless cooperation between private and public sector operators, government agencies, States, and regions.

Finally, we must move from rhetoric to action, in developing our regional infrastructure and regional value chains, we must work collaboratively in regional and multilateral institutions, together with the private sector to expand markets for trade in goods, services and intellectual property.

Indeed, we must view regionalism and multilateralism as being complementary. One important objective of the AfCFTA is to overcome the economic fragmentation of the continent by bringing the regional economic blocs together in a common arrangement.

There is now an urgent need for full, effective implementation of the AfCFTA, so as to harness its potential to foster industrialization, job creation, and investment while enhancing the competitiveness of Africa today and for many years to come.

Once again I thank all participants and speakers at this all important conference and we look forward not only to a fruitful deliberations but an outcome that will truly show the path to the Way Forward for African economies.

Thank you for listening.