AfDB ready to support Africa’s Continental Free Trade Area

The African Development Bank (AfDB) has indicated it is ready to lend a hand to African countries in establishing the Continental Free Trade Area by 2017.

This was made known by the Bank’s President Donald Kaberuka last week in Addis Ababa when he addressed the NEPAD Heads of State and Government Orientation Committee.

“The AfDB stands ready to assist African countries in implementing the physical infrastructure needed for the establishment of the Continental Free Trade Area by 2017,” said Kaberuka.

African leaders at the 18th ordinary session in January 2012, adopted an Action Plan for Boosting Intra-African Trade and agreed to establish a Continental Free Trade Area (CFTA) by 2017.

According to an AfDB statement, Mr Kaberuka echoed the call of the African countries “for the development of trade-related infrastructure and productive capacity building programmes” as well as “an enabling policy and legal framework so as to contribute specifically to the boosting of intra-African trade.”

Mr Kaberuka was confident that intra-African trade and African exports to the rest of the world could grow very fast if existing efforts were scaled up to improve the continent’s physical infrastructure which continues to undermine competitiveness and trade growth.

Efforts to address physical infrastructure should also look at “soft infrastructure” constraints such as regulatory barriers, restrictive regulations on movement of goods and people, poor logistics services and of late, challenges in accessing trade finance, he said.

“Soft infrastructure constraints can be as pervasive as tariffs at the border, and can easily nullify the competitiveness and efficiency gains derived from investments in physical infrastructure,”  Mr Kaberuka warned.

He called for innovative ways to finance Africa’s growing infrastructure requirements as investors and sovereign wealth funds would be looking for more appealing investments such as infrastructure in Africa, provided security and good returns are assured.

He noted that sovereign wealth funds are forecast to hold $10 trillion by 2015 and could be a key source of investment to finance some of Africa’s infrastructure.

By Ekow Quandzie