Systems are needed to unlock cross-border trade and manufacturing
After two years of physical disconnect, the moving parts of the African ecosystem had the opportunity to come together at Global Trade Review Africa, held in Cape Town from March 10.
As a pan-African banking group, we enjoy some unique insights into the ecosystem on the continent and see critical challenges that need to be addressed before we can capture the projected growth. Let’s have a look at where we are now, before addressing how we can move forward.
Until we can cut the red tape and make transacting seamless, we are going to struggle to stimulate intra-African trade. We must modernise logistics and financial systems simultaneously.Since 2013, blueberry exports from SA have seen substantial growth. In 2013, totals were under 2,000 tonnes, while in 2021, they exceeded 20,000 tonnes.
The automotive sector is a perfect example of this. Countries like SA have benefited from major foreign investment by the likes of Ford, VW and Toyota, and many jobs have been created through this investment. However, the disruption to the global supply of semiconductor microchips has stalled new production capabilities.
Manufacturing requires long-term capital commitments and banks are working closely with export credit agencies to create opportunities for growth. Development finance institutions are investing in incubation to help develop entrepreneurs across multiple sectors, but all of this unfortunately takes time.While there are very material challenges the AfCFTA region faces in developing the entrepreneurship ecosystem, it is not all doom and gloom and we are excited about a number of growth sectors.
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