Trade agreements and capital markets critical to driving Africa’s economic development
Industry and economic experts are of the view that trade agreements and access to capital markets are essential to driving the economic development of the African Continent.
Speaking at the Global Business Forum (GBF) Africa 2021 in Dubai on Wednesday, October 13, and examining the important role of capital markets and trade agreements in the Continent’s economy, industry experts cited the African Continental Free Trade Agreement (AfCFTA) as key to the successful economic development of the continent.
The need to accelerate procedures for economic integration between the African states taking part in AfCFTA and addressing any obstacles hindering its success was highlighted by industry experts.
One of such industry experts was Paul Kavuma, Chief Executive Officer, Capital Principal Partners, Kenya who noted that the value of the AfCFTA is priceless to investors and ultimately to the development of the Continent.
“International investors realise that the value that AfCFTA is bringing to the table is priceless, facilitating the entire investment operations in the African states through representing a comprehensive illustration of the investment environment in Africa. We have ambitious targets, and we are optimistic about what the future holds for our rich continent. We are confident that Africa has a lot to offer for its investor as well as foreign investors,” Kavuma said.
Touching on the immense benefits of the capital markets to the continent and how the pandemic had affected the government’s access to the capital markets amid the Covid pandemic were Miguel Azevedo, Head of Investment Banking – Middle East and Africa, Citi, UAE and Megan McDonald, Head of Client Coverage, Wholesale Banking, Standard Bank Group, South Africa.
“It’s been a bit of a two speed development of capital markets in Africa. It’s gone through phases pre-pandemic of seeing a lot of issues in the debt capital markets, for example, from sovereigns issuing euro bonds, cross-border reaching record levels in 2018-2019, but that was really the way that was being led by the sovereigns, and then we started to see some of the corporates coming to market. That kind of all hit a big pause in 2020, when you see a number of the African governments retreating from the capital markets and instead going to the IMF and the World Bank for funding support,” said Megan McDonald.
“I actually believe the whole COVID situation is a bit of a blessing in disguise. We were not having a great run in terms of capital markets across Africa before. What this has accelerated in Africa is digitalisation, generally speaking, and we have seen quite a few great stories emerging in the last few years of great companies that want and can go public and put for a country on a continent to have a successful capital market,” added Miguel Azevedo.
GBF Africa 2021 shed light on the global economic recovery following the Covid-19 pandemic and its effects on trade and business around the world.
The high-level forum took a closer look at Africa’s next phase of economic development in the Covid era and beyond, as discussions examine the role of cross-border collaboration in creating new business opportunities and driving sustainable growth across the continent.
