Using different currencies across Africa is a barrier to trade, says Yofi Grant
The chief executive officer of the Ghana Investment Promotion Centre (GIPC) singles out moves towards a single currency as one of the critical things leaders in Africa must adopt to promote trade
Ghana News Agency (Accra) – Yofi Grant, chief executive officer of the Ghana Investment Promotion Centre (GIPC), says using various currencies across Africa for trade is a huge barrier to the continent. It would be much easier for African countries to trade if there were a single currency, he argued.
“I should be able to trade in Nigeria with one currency because it is just one hour away. And we should own our own data, the currency of the world is data,” Grant said.
Grant was speaking at a United Capital plc e-conference on the theme “Fostering Innovative Cross-Border Financing Solutions in Africa”. The e-conference discussed how to close the huge funding gap in critical sectors across the continent by using financing solutions across sub-Saharan Africa.
He said the lack of capital was making it difficult for micro-enterprises to achieve great progress. This points up the need for great thinkers who are willing to look inwards, he argued.
Grant said for any form of development to take place, there must be political stability and the continent must do away with cheap capital or cheap funding which distracts countries from achieving its development objectives.
Wale Shonibare, acting vice-president in charge of power, energy and green growth at the African Development Bank (AfDB), said the African continent has to improve cross-border trade and build regional interconnections. “We … need to embrace one currency,” Shonibare said.
Under the bank’s Desert to Power initiative, African countries are creating the world’s largest solar zone to provide power to 250 million people. “We should put more effort to develop our local capital market and also invest in education,” Shonibare said.
Gbenga Makinde, chief executive officer of UBA Benin, said financing regional trade was a key strategy that was helping the bank to penetrate the African market.
“We need to look inwards to solve our problems and have currencies we can use to finance the challenges we have within,” he said.
He said the continent needed to adopt regional trade as a strategy to penetrate markets; and that “if we have pan-African banks following this path, we will definitely proffer solutions within Africa”.
Foreign direct investment
Peter Ashade, group chief executive officer of United Capital plc, said that over the years, cross-border financing across sub-Saharan Africa had played a limited role in addressing the funding gap effectively across key economic sectors on the continent.
Foreign direct investment flows from China have surged from $0.5 billion in 2003 to $43 billion in 2017, he said. However, France, Netherlands, the United Kingdom and the United States remain the largest investor economies in Africa, he said, with over $60 billion in investment each as of 2017.
While data on intra-regional investment remains scarce, the African Development Bank estimates that between 2006 and 2016, intra-African greenfield investments grew from $4 billion to $10 billion, Ashade said. At the same time, the number of intra-regional mergers and acquisitions doubled from 238 in 2006 to more than 418 in 2016.
“While this progress is laudable, so much more is still required,” he said.
The socio-economic effects of the devastating pandemic had further exposed the vulnerabilities of the region, he said, as it continues to grapple with infrastructure development challenges compounded by capital flight to safer havens.
“Obviously, this begs for innovative, home-grown financing solutions to help strengthen Africa’s economic resilience and, perhaps, propel the continent through a new phase of growth,” he said.
Ashade said that, as a responsible financial institution and reputable operator in the capital markets, the AfDB is contributing its quota by creating platforms to enable experts, including the continent’s finest professionals, to proffer insights on how to change the narrative from their wealth of experience.
* Asaase Radio 99.5 – now live on your radio. Tune in or log on to broadcasts online.
* Twitter: @asaaseradio995
#asaaseradio
#TVOL
