CHIEF Executive Officer (CEO) of the Ghana Investment Promotion Centre (GIPC), Mr Yofi Grant, has rallied heads of Investment Promotion Agencies (IPAs) in Africa to pool their resources and drive intra-Africa trade and investment to make Africa the recipient of a quarter of Global Foreign Direct Investment (FDI).
Addressing CEOs and officials of the IPAs at the first Annual Assembly of IPAs in Accra on the theme, ‘The Role of the IPAs in Facilitating Intra-African Trade,’ Mr Grant urged them to deepen intra-regional connections and networks to foster intra-African investment.
Mr Grant pointed out that “FDIs may not be the panacea for all of our economic problems in Africa, but it is important because it brings the fresh capital, technology, and skills so badly needed to raise living standards and reduce Africa’s dependence on volatile commodity exports and as we look externally, it is time to look inward for the much-needed investment.”
“What would it take for Africa to trade more and invest more with itself,?” he asked
Responding to the question, Mr Grant said “I believe it will take the cooperation and collaboration of us, herein gathered to propel intra-Africa trade, and investment.”
Foreign direct investment (FDI) flows to Africa reached $83 billion in 2021 – a record – from $39 billion in 2020, accounting for 5.2 per cent of global FDI. Southern Africa, East Africa and West Africa saw their flows rise; flows in Central Africa remained flat and in North Africa declined.
Intra-Africa FDI—direct investment by firms in Africa into other countries in the region—has also increased steadily, rising 12 percent annually from 2002 to 2008 (excluding FDI to and from Mauritius).
In 2017, the stock of intra-Africa FDI hit a high of US$52 billion, or 11 percent of the Africa’s total FDI stock. Southern Africa specifically South Africa, is the main source of intra-Africa FDI, making up 60 to 70 percent of intra-Africa FDI stock in most years, and West Africa has recently emerged as another important source of Intra-Africa FDI.
Touching on the role of the Africa Continental Free Trade Area (AfCFTA) in deepening trade and investment, Mr Grant said the trade deal promises broader and deeper economic integration and would attract investment, boost trade, reduce poverty, and increase shared prosperity in Africa and at full operation.
The GIPC CEO noted that :
- Africa could see FDI increase by between 111 percent and 159 percent under the AfCFTA.
- Wages would rise by 11.2 percent for women and 9.8 percent for men by 2035, albeit with regional variations depending on the industries that expand the most in specific countries.
- 50 million people could escape extreme poverty by 2035, and real income could rise by 9 percent.
- Under deep integration, Africa’s exports to the rest of the world would go up by 32 percent by 2035, and intra-African exports would grow by 109 percent, led by manufactured goods.