Commencement of the Africa Continental Free Trade Area (AfCFTA) has spurred global investment attention to the continent, Wamkele Mene, Secretary-General of the AfCFTA has indicated.
He is therefore calling on Africans in the diaspora to position themselves to benefit from the opportunity available, as well as aid the continent’s economic growth.
Mene believes that with the launch and operationalisation of the AfCFTA, the discourse about Africa shifting from one of challenges and gaps to one of opportunities and prospects is gaining traction.
The AfCFTA Secretary-General made these remarks when he addressed the Ghana Diaspora Investment Summit organised by the Ghana Investment Promotion Centre (GIPC) recently.
Mr. Mene said: “Africa is now receiving a high level of interest as an investment destination from investors from across the globe”.
He added that AfCFTA is creating a new narrative that should inspire the African diaspora to explore opportunities on the continent, and invest in the various sectors.
Owing to the dearth of opportunities on the continent, its educated people – seeking better opportunities – are often found in the remotest parts of the world eking out an existence; they can now seize the opportunity to invest in the economy’s various sectors now that the prospects are looking much brighter for the continent.
The African Continental Free Trade Area (AfCFTA), if managed well and implemented effectively, could spur investments in Africa – both from within and outside the continent.
To that end, outside investors will buy controlling stakes in African enterprises, create affiliates for sourcing and outsourcing inputs, as well as the provision of goods and services in the (African) host countries.
Foreign investors and investments are attracted by market size (population size and income per capita), openness, economic growth and policy certainty and predictability, among other things.
For instance, the reduction of regulatory barriers to trade in services across the continent could well attract investors in the services sector. Manufacturing firms will also benefit from service trade openness through the ease of access to more and higher-quality services inputs.
Investment has always been recognised as an essential tool for development in Africa countries’ national, regional and continental development strategies. Concerted efforts have been put in place at national and regional levels to attract foreign investment.
Investment builds industries, connects international markets and drives innovation and competitiveness.
Editorial 2: Informal economy struggles to transition into ‘new’ normal
Ghana Statistical Service (GSS) data show that in the first quarter of this year, the informal sector grew by 0.7 percent compared to 4.4 percent for the same period in 2020. This goes to confirm the fact that the country’s informal sector is still struggling to recover from ravages of the pandemic.
The data further show the sector has seen significant disruptions in its activities, as it contracted 5.7 and 4.5 percent respectively in the second and third quarters of 2020 compared to the overall economy’s contraction of 5.7 and 3.2 percent respectively in the same period.
Compared to the pre-pandemic period, the informal sector’s growth overtook the overall economic growth or was slightly below it. For example, in the first quarter of 2019 general growth of the economy was 5.9 percent, whereas the informal sector’s growth was 6.3 percent.
This suggests that the informal sector, which is the largest employer in the economy, has been badly hit by the pandemic far more than the formal sector. While businesses in the formal sector were able to devise innovative strategies to meet customer’s demand, the informal sector found it challenging to transition to the new normal of doing business with increased digitisation and technology.
It was realised that most players in the informal sector did not have both the technical and financial capacity to adapt to the changing environment, as these digital platforms require knowledge and finance to operate.
It is important to recognise that most businesses in the sector are micro in size and operate on a hand-to-mouth basis, making it difficult to raise the needed finances to invest in digital platforms.
Director at the Institute of Social, Statistics and Economic Research (ISSER) of the University of Ghana, Prof. Peter Quartey, corroborated this assertion when he stated that slow recovery of the informal sector can be attributed to the general economic slowdown and the sector’s inability to adjust to the new normal like the formal sector did.
People are moving toward increased digitisation now, and so those in the informal sector must also start moving toward that direction.