NAIROBI, Kenya, Sept 29 – African countries need to form strategic partnerships that will enable them address the contradictions that they face in trade and investments, a trade expert has said.
African Union (AU) Commission Deputy Chairperson Erastus Mwencha pointed out on Tuesday that the continent loses out in trade as it continues to export raw materials and import finished products thus the need to address this imbalance.
“The trade volume between Europe and Africa is growing faster than the European side but Africa’s is not growing as much because it is exporting non-valuable products. This cannot be a win-win situation,” he said at the closing ceremony of a two-day European Union African Business Forum which was themed Africa-EU: On the Road to New Win-Win Partnerships.
For Africa’s economy to prosper, Mr Mwencha said the continent needed more integration, investment and infrastructure which would go a long way in unlocking the huge potential that it holds.
It would also have to reduce its reliance on aid which is now estimated at four percent of the GDP and take measures that would see it generate private investment to about 25 percent (of the GDP), create jobs and alleviate poverty.
To achieve this however, Mr Mwencha called upon the European and African business communities to dialogue and come up with ways for the African economy to open up for foreign investment.
Although the role of governments is to create an enabling environment for the private sector to operate in, he challenged regimes to strive to reduce bureaucracies that hamper the implementation of a conducive business climate.
“Yes there are problems but Africa is still profitable because how come there are investments in some of the resource-rich war torn countries?” he posed.
He said that economic development also led to political and social stability for all.
“As neighbours you (Europe) cannot live next to poverty and continue to have peace. If Africa is not going to be stable economically, it will be unstable politically and we will after each other,” he cautioned.
During the ceremony, various recommendations that would make the much sought after growth in key sectors were outlined.
For instance, there was consensus that the continent needs to change its policy objective from poverty reduction to wealth creation as well as the need to improve the availability and accessibility of project financing across these countries.
Information Communications Technology was identified as an essential tool to improve the delivery of sustainable development and as such budgetary allocation need to be made and in some cases increased to achieve this goal.