While the past two years have certainly been very challenging for global trade participants, the pace and extent of the sector’s recovery now depends on businesses shaking off any form of hesitancy that may have emerged due to COVID-19 challenges, and proactively looking for opportunities to reignite and grow their operations.
That’s the view of Dominic Adu – Chief Executive Officer of First National Bank, who also says that for African businesses, those growth opportunities are closer than they think. In fact, they may well be right on their own doorstep.
“COVID-19 undoubtedly put the brakes on trade all over the world, Africa wasn’t insulated from this pandemic-driven fallout,” Dominic says, adding: “But much of the world is now on track toward recovering from the economic impacts of the virus, which means it’s time for businesses to shake off the difficulties and constraints that understandably became the norm in 2020 and 2021, and make the decision to take back their success.”
Dominic admits that the economic recovery is still gradual, and that there is the possibility of more waves of COVID-19. He also acknowledges that the conflict between Russia and Ukraine will likely have a long-term impact on many economies across the world. But he is adamant that these factors must no longer inhibit the trade ambitions of African companies.
“Yes, the Russia-Ukraine conflict poses many challenges on the global economic stage. However, the direct loss of trade value and volumes are not hugely significant,” he says.
Adu is of the opinion that businesses should view the economic and logistics challenges of the past two years as a reminder of the unique opportunity they have to grow their business simply by looking at the immense opportunities they have to do so right here in Africa.
“If there’s one lesson that organisations and industries in Africa can and should be taking from the international trade repercussions of the conflict and the massive offshore logistics bottlenecks created by COVID-19 lockdowns is that, through it all, Africa has essentially stayed open for business, and until we recognise the value that exists for us to tap into right here on the African continent, we will remain at the mercy of global events that should not, in reality, be causing our businesses to suffer the way they currently do.” Dominic says
Dominic points out that the African continent currently only has around 17% intra-continental trade, as opposed to the 65% intra-trade in Europe and approximately 55% in Asia. This presents countries in Africa with a huge opportunity to start looking at their immediate neighbours as trade partners, and to start developing strategies for intra-African trade that help to retain African capital on the continent.
“African businesses urgently need to recognise the massive potential they have to secure the growth and sustainability of their operations simply by correcting the mistaken belief that the keys to their success lie exclusively in the hands of overseas markets,” he says,
Adu is quick to point out that he suffers no illusions about the hurdles that also exist when doing business in Africa, not least the dire need for infrastructure investment and a comprehensive overhaul of some archaic systems and policies that still limit trade and business efficiencies. However, he says we should resolve these issues as quickly as possible, but continue trading and create efficiencies as we go along.
“The quickest way to address the trade challenges in Africa is to ensure we are serious about building our intra-Africa trade,” he explains, adding that: “And that includes locating or creating trade opportunities across the continent, getting involved in forums and organisations that have a mandate to prompt investment and policy reforms by African governments, and making sure that discussions about intra-Africa trade are standing items on the agendas of every company’s board meeting.”
“Africa’s potential as a global economic engine room has long been recognised, but never fully harnessed, least of all by African businesses, and if African traders can access even a fraction of that potential, rather than allowing themselves to continue to languish as casualties of repeated global crises, the growth opportunities for the country and continent would far exceed anything they will achieve by doggedly continuing to focus on international business as usual,” Dominic concludes.