Managing Director of the International Finance Corporation (IFC), Makhtar Diop, has urged heads of African governments to take advantage of the African Continental Free Trade Area (AfCFTA) agreement to build local and regional value chains on the continent.
According to Mr Diop, the need to build value chains on the continent has become necessary given the exposed inefficiencies in the various sectors of African economies.
Building regional value chains, Mr Diop further stated at UBA’s third annual Africa Conversations in commemoration of African Day on May 25, 2021, will help transform the continent.
“We have an opportunity to change the face of our continent, to transform our continent, and by transforming the continent it means creating jobs and growth by having strong SMEs, startups which employ the youth.”
“We need to take advantage of the AfCFTA, today we have the opportunity to build a regional value chains which Africa urgently needs have it’s transformation and we can start with the pharmaceutical and vaccine industry due to covid,” he averred.
He continued saying, “We are at a level where we don’t have enough local and regional value chains, but we can build that and that will require a level of specialisation between countries and if we are able to do that, we will have the infrastructure to grow.”
“I tell my team that I don’t want a trade financing facility that will look at helping African companies trade outside but within the continent, particularly the SMEs. It will be hard work and there will be obstacles but we need to address them,” he stated further.
Calls for the creation of regional value chains under AfCFTA on the back of the Covid-19 pandic has also been made by the Vice President, Dr Mahamudu Bawumia.
Speaking as the Special Guest of Honour during the 2021 virtual edition of the Ghana International Petroleum Conference (Ghipcon) on the theme Positioning Africa’s Petroleum Downstream for AfCFTA, Vice President Dr Bawumia, posited that the onset of the Covid-19 pandemic and the resultant protectionist interventions by major global suppliers to Africa should be a wake up call for African nations to cooperate more and build self-sustaining economies.
To drive home his point, he cited the cooperation and development of regional assets such as building refineries and increasing logical assets in the petroleum downstream sector as an instance.
This, when done, will ensure the economies of scale required to achieve the commercial viability of national refineries which are in most cases commercially unsustainable.
The IFC is the private sector arm of the World Bank, it provides financing to the private sector of the member states of the World Bank.
