President Cyril Ramaphosa during the opening panel discussion at the second annual Africa Investment Forum in Joburg. He said Africans should contribute to their prosperity as they position themselves to be the critical cog in the rebalancing of the global economy. Photo: GCIS
JOHANNESBURG – African leaders said yesterday that the African Continental Free Trade Area (AfCFTA) represented Africa’s shift to self-reliance, while seeking to dispel perceptions that the continent had a risky investment environment.

Speaking at the 2nd Africa Investment Forum (AIF) in Johannesburg on Monday, President Cyril Ramaphosa said much of the economic progress over the past few years had been made possible by developments in the political sphere.

Ramaphosa said the interest that the forum had garnered was a clear indication that the international investor community was optimistic about Africa’s prospects, excited by its potential, and wanted to be part of its success. “Global investor surveys consistently highlight political stability and security as important considerations for committing capital,” he said.

“Every election that passes peacefully and that reflects the will of the people is another step towards the attainment of the African Union’s vision of an Africa at peace with itself. It challenges the notion that Africa is unstable and a risky place to invest.”

South Africa is targeting investments totalling $10 billion (R148.33bn) in the AIF after securing R363bn investment pledges during the 2nd SA Investment Conference last week. One of 50 deals signed yesterday was a €1 billion (R16.34bn) investment by the European Investment Bank into a gender-lending programme and new agriculture telecom trade insurance engagement across Africa.

The AIF has been instrumental in mobilising funding for initiatives such as the Accra Skytrain, the Kigali Innovation City, the first road-rail bridge project linking Kinshasa and Brazzaville, and the $320 million African Infrastructure Investment Fund.

Ramaphosa said the AfCFTA agreement would pave the way for the free flow of goods and services, and consumers would benefit from the removal of trade barriers as business costs would be reduced.

“But by far the most significant potential of the AfCFTA will be in increasing the value of intra-African trade, which, by some estimates, is likely to rise by 15 percent to 25 percent by 2040. In so doing, the Continental Free Trade Area will encourage greater self-reliance,” Ramaphosa said.

To date, 28 countries have both signed and ratified the AfCFTA, which is expected to connect more than 1.2 billion people and solidify a consumer market that will be worth more than $3 trillion by 2030.

Start of trading under the AfCFTA will begin on July 1, 2020.

President of the African Development Bank, Dr Akinwumi Adesina, said Africa offered an incredibly compelling investment case. “The risk perceptions of the continent, while high, are often exaggerated. And they do not match what data shows on risk and return performance on investments,” he said. “This is a new, more confident Africa. A continent now aware of its place in the world, and determined to be a global investment haven.”

With Rwanda ranked number one in the ease of doing business in Africa, President Paul Kagame said his government had invested in a mixed environment where technology companies and higher institutions of learning come together with financial services to allow start-up companies to develop and grow.