Gaborone — A major policy shift from member states is necessary to effectively realise the African Continental Free Trade Agreement.
This was said by Minister of Finance and Economic Development Dr Thapelo Matsheka when addressing a Webinar on financing implementation of the agreement on Tuesday.
Dr Matsheka stressed the need for member states to recognise the importance of establishing robust financing mechanisms which would form the engine of economic growth and the vital lubricant of trade and investment.
"In other words, the African continent will need to put in place institutional and policy mechanisms for the provision of finance to provide short, medium and long term finance to support trading activities," he said.
He said linkages of African economies in the agreement would avail a US$3.4 trillion to every African economic player on the continent.
Dr Matsheka said the anticipated market expansion of would require African countries to meet great demand as tariff and non-tariff barriers to trade and investment between member states would be eliminated.
Mindful of the fact that trade involved significant risk, he said failure to provide finance might impede the desired growth in trade and investment.
"It is, therefore, necessary to explore the appropriate institutional mechanisms through which risks in international financing can be managed and mitigated to allow for enhanced flow of finance," he said.
Dr Matsheka said given the growing initiatives at regional economic integration in Africa, the role of institutions such as African Development Bank, African Trade Insurance Agency and African Export-Import Bank was important.
He advised African investors and their partners who sought investment opportunities be given a sense of security to safeguard them, particularly against political risk.
Dr Matsheka said the COVID-19 pandemic was slowly changing the whole risk profile of international economic relations, which called for stakeholders and member states to work together.
Business Botswana president Mr Gobusamang Keebine said financial institutions needed to be conversant with the needs of SMEs and emerging entrepreneurs.
"Until we Africans come together and realize that we can only win together, the economic problems surrounding Africa will never be resolved," he said.
Mr Keebine, together with other panelists in the Webinar, also noted that capital markets such as the Johannesburg Stock Exchange and Botswana Stock Exchange including private equity, were some of the modes which could be utilised to achieve financing of the agreement.
Organised by The Business Kraal and Business Botswana, the Webinar connected participants to deliberate on topical economic issues.
Source : BOPA