Afreximbank tells Africa to harness its resources

From the pan-African multilateral financial institution, African Export-Import Bank (Afreximbank) at the weekend, came a timely reminder to the continent’s leadership and policymakers to be devoted to harnessing huge resources for the development of the region.

It also charged them to work at financing, and strengthening legal frameworks that aim at promoting intra and extra-African trade, but mostly, reduce to the barest minimum the emphasis on grants and aids to pull the economies out of poverty.

Meanwhile, Africa’s migrant resources, now estimated at more than $110billion, could be a major source of funding for key infrastructure projects across the continent if properly harnessed, Afreximbank President, Dr. Benedict Oramah, said in Washington DC, at the weekend.

In a keynote address to the Frontier 100 Forum, organised by the Initiative for Global Development, he explained that those resources, composed of $53billion of savings and $63billion of yearly remittances, were well in excess of the continent’s yearly infrastructure financing requirements, currently estimated at about $93billion.

Also, Oramah, while delivering a lecture titled: “A Path to Making Africa Great Again,” at the New York University, warned that grants have never pulled a people out of poverty, but rather perpetuate the culture of dependence.

He noted that since the early 2000, migrant remittances had become the most important source of foreign currency inflows for many African countries, and had become more important than Foreign Direct Investment (FDI) as a source of foreign exchange in many.

“In Nigeria, migrant remittances, at about $20billion in 2015, were about four times the size of FDI inflows, and about 20 per cent of merchandise export receipts in that year.

“Similarly in Egypt, migrant remittances represent some 72 per cent of export earnings and four times the size of FDI inflows. In relatively smaller economies, such as Cape Verde, Comoros, the Gambia, and Sao Tome and Principe, migrant remittances are at least twice the size of the value of export earnings.”

He regretted that many Governments were yet to put in place policies and programmes to effectively harness the many significant benefits offered by the Diaspora, saying that lessons could be learned from the experiences of countries like the Philippines, Israel, Bangladesh, India, and Mexico that had robust programmes to improve Diaspora participation in national economic activities.

A critical piece on the path to greatness for Africa is hinged on fostering intra-African trade and on the de-commoditisation of the continent’s exports, he said, adding that Afreximbank had launched an intra-African trade strategy dedicated to that effort.

According to him, the bank’s intra-African trade strategy was driven by a philosophy that building solid export manufacturing capacities and domestic as well as continental supply chains would facilitate an increase in the flow of goods and services across borders in Africa, and between Africa and Africans in the Diaspora.

Priorities under the strategy include deepening access to trade information; formalisation of informal intra-African trade by supporting the emergence and growth of export trading companies to serve as institutional vehicles for intra-African trade; and broadening intra-African trade to include the Diaspora.