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Infrastructure, Trading Barriers; Hard-Hitting Hurdles in Ease of Doing Business in Africa, says The Economist

  Nov 20, 2015

The Growth Crossing Series, a global event and content series produced by the Economist’s Events and The Economist Intelligence Unit, convened in Nairobi, Kenya on the 17th of November to discuss Africa’s Role towards the global shift of economic power balance in developing nations. Strathmore Business School’s Gregoire Piller, Head of External Affairs, Office of the Deputy Vice Chancellor Research and Christine Mwangi, Director Executive Education Strathmore Institute of Public Policy and Governance took part in the intriguing discussions.

As companies traverse physical boundaries into new emerging economies, it is becoming more evident that products and services increasingly meeting the growing demands of developing economies, are shaping global trading patterns.

Hon. Adan Mohamed, Cabinet Secretary for industrialization and Enterprise Development, Ministry of Industrialization and Enterprise Development, gave the opening remarks, with Adam Green, Senior Editor, The Economist Intelligence Unit, providing insights into the microeconomic and policy trends shaping Africa’s current and forecast growth, and international, intra-African trade dynamics. Mr. Green also identified key infrastructure bottlenecks to be overcomed to strengthen Africa’s internal and international trade.

Africa’s infrastructure is one of the more challenging constraints to business operations. Adequate logistics infrastructure is a necessity if Africa is to play an increasing role in global supply chains. A panel discussion consisting of Madhur Jha, Senior economist, Thematic Research Standard Chartered, Julie Adell- Owino, Group Corporate Relations Director, East African Breweries Limited (EABL), Peter Njonjo, General Manager, East Africa, The Coca-Cola Company and Karim Sadek, Managing Director, Qalaa Holdings Transportation Division, evaluated the activity and trends that are being seen when it comes to project financing for infrastructure across Kenya and the wider East Africa region.

Non-Trade Tariffs have also been a kick on the hip in Africa’s development too. Intra-regional goods trade in total goods imports currently stands at 5% in COMESA (Common Market for Eastern and Southern Africa). Helen Kenani, Program Coordinator for the Tripartite Capacity Building Program, COMESA, gave insights on the potential for greater regional trade integration in Africa. She discussed the barriers to intra-regional trade and how they may be overcomed.

However, advances in technology have allowed Africa to leapfrog development steps and break new ground in mobile- money innovations, where African innovators are leading the world. A similar, game-changing experience is now possible in Africa’s trade finance sector, with the emergence of Bank Payments Obligation (BPO), a new way of settling trade digitally.

Will the challenges facing Africa change periodically, as time goes by?

“I believe that some of the economic growth challenges, Africa faces are a question of brick and mortar where averse sections of its continent are in accessible. It is important to put in place solid infrastructural frame work, to spearhead our growth. As we speak of Africa’s rising, we must not turn a blind eye to the probability of a widening gap between the rich and the poor. Africa’s prospects will be harnessed by those able to invest into vast untapped resources, and cultivate on human potential,” shared Christine Mwangi.

Africa stands to benefit from developments in the BPO space, but must make bold and swift commitments to adopt the technology and build the necessary infrastructure. Much depends on how governments and business collaborate to establish clear rules and institutional frameworks to facilitate adoption.

“Research has proven that corruption in African countries is responsible for a reduction in GDP by 2% points. It is our role as members of the Academia, to take up the mantle of equipping business leaders with the tools to become virtuous leaders who will transform Africa’s future,” remarked Christine Mwangi.

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