2nd November 2022
Own Correspondent
The world is experiencing the greatest catastrophic disruption since the 2008 Global recession with the combined effects of the COVID-19 pandemic and the ongoing Russia/Ukraine war.
The situation has somewhat reversed the optimistic 2022 International Monetary Fund (IMF) outlook. According to the International Monetary Fund (IMF) baseline forecast, the world economic growth is 4 projected to grow by 6.1 per cent in 2021 and 3.2 per cent in 2022.
According to officials the future is also looking gloomy and uncertain in the short to medium term as recent International Monetary Fund forecast indicates world economy is expected to grow by 2.7% in 2023. This indicates the lowest growth profile since 2001.
Additionally, the downturn in world growth rates is also heavily influenced by economic headwinds currently facing the United States of America, China, and Europe.
“Africa has embarked on a new transformative journey of integration into a single market, as articulated in the Africa Continental Free Trade Area (AfCFTA) and Africa’s Agenda 2063. The vision and aspirations contained in these strategic frameworks remain the propelling factor for transforming our continent into a global powerhouse, which is an Africa that seeks unity, self-determination, freedom, progress, and collective prosperity,” said Mokgweetsi Eric Keabetswe Masisi, President of Botswana in official opening remarks.
He said, “We need to act timely and with precision to offset the potential socio-economic ramifications. On the other hand, global industrial output is on a decline due to shortages of inputs, longer lead times for deliveries, rising commodity prices and congestion at seaports, which negatively affects shipping goods on time. These unforeseen circumstances, therefore, require joint timely action to offset the potential socio-economic consequences, particularly on the African continent. We should, as Africa, rise above these and through our 5 experiences become the global production hub that leads the global supply chains.”
According to the International Monetary Fund (IMF) baseline forecast, the world economic growth is 4 projected to grow by 6.1 per cent in 2021 and 3.2 per cent in 2022. The future is also looking gloomy and uncertain in the short to medium term as the recent International Monetary Fund forecast indicates that the world economy is expected to grow by 2.7% in 2023.
This projects lowest growth profile since 2001 which will be further compounded by the downturn in world growth rates heavily influenced by economic headwinds currently facing the United States of America, China, and Europe.
According to officials Global Expo Botswana 2022, is therefore an opportune time for Government of Botswana to attract inward investments and undertake industrial developments to drive towards self-sufficiency in our natural basic needs.
Whilst trading in commodities has carried Botswana far, it is believed that the next growth phase requires a restructuring of the economy and developing value chains, driven by technological transformation.
“To this effect, my Government has adopted an ambitious digitalization strategy to transfer the economy and improve the livelihoods of our people,” said Masisi.
He said, “We are at the forefront of creating digital infrastructure driven by our Digital Transformation Strategy (SmartBots). Some of the key projects being implemented under this strategy include the Village Connectivity Project, which aims at providing internet and WIFI connectivity to Government institutions, schools, and health facilities in over 500 villages in Botswana.”
The completion of this project will enable Government to provide services online and open immense opportunities for the private sector. Government expects the private sector to embrace and take advantage of opportunities provided by this digitalization strategy, to achieve greater efficiency.
“Our ambition to industrialise cannot be achieved without a sufficient injection of private capital. I am informed that this year’s Global Expo brings together investors, manufacturers, entrepreneurs, Government Departments, financial institutions, and SMMEs from more than ten (10) countries, to explore profitable business and joint venture opportunities,” said Masisi.
He said, “In addition, the Expo has attracted 200 exhibitors from Botswana, Zimbabwe, South Africa, Zambia, Lesotho, Mozambique, India, Indonesia, Swaziland, Namibia and Kenya. I, therefore, believe that these international exhibitors will not go back home empty-handed. The Expo will provide a platform for securing mutually beneficial investment deals and direct investments.”
Officials say Botswana is keen to develop domestic and regional value chains in sectors such as automotive and components manufacturing, including e-mobility solutions, meat and meat products; fruits and vegetables; leather and leather products; textile and clothing, as well as financial services and pharmaceuticals.
It is therefore forging strong ties with Afreximbank, which is fully committed to expanding access to trade information across Africa, so that intra-African trade share of total African trade can rise from about 16% to our near-term goal of 25%. That is why it launched the biennial Intra-African Trade Fairs (IATFs), in partnership with the African Union Commission (AUC) and the AfCFTA secretariat. The first edition was held in Cairo in December 2018 and the second in Durban in November last year.
The two editions combined attracted about 40,000 participants and over 75 billion USD in trade and investment deals. The third edition will hold in November next year in Abidjan, Cote d’Ivoire. It is our hope that Botswana will once again participate actively in the largest physical marketplace for Africa – which has proven extremely effective in promoting intra-regional trade and investments.
It was at the 2018 Intra African Trade Fair in Cairo that the largest intra-African EPC deal in Africa was done between Egyptian contractors and the Government of Tanzania for the construction of the USD 2.9 billion Rufiji dam in Tanzania. The construction of that dam is well advised.
It was at the 2021 IATF Trade Fair that the Government of Malawi concluded a deal to export USD 80 million worth of maize to South Sudan. There is no doubt that the Trade Fair is delivering on its promise of opening African markets for African Business.
“It is Expos, Trade Fairs, and Exhibitions that expose us to trade and investment opportunities around the world. As we promote intra-African trade and investments in the context of the African Continental Free Trade Agreement (AfCFTA), we must invest more in Expos if we are to break down the 84,000 kilometers of borders that divide us and banish the absurdities in the way that Africans trade. The conventional wisdom is that lack of infrastructure is the greatest constraint to intra-African trade, but in reality, it is the problem of Trade Information that is creating so many of these absurdities,” said Professor Benedict Oramah, President and Chairman of Afreximbank.
He said, “In addition, we have set up a platform through our Investment Promotion Agency, the Botswana Investment and Trade Centre (BITC) to provide those interested in investing in Botswana with in-depth information and facilitate companies to seamlessly set up and operate in Botswana through the Botswana one-stop service centre (BOSC).”
PAPSS is a priority initiative of Afreximbank, the AUC, and AfCFTA secretariat. Its ultimate goals is to integrate Africa’s fragmented financial markets characterized by 42 currencies and high transaction costs. In the aggregate, it costs Africa an amount of USD 5 billion a year to make intra-African payments. Intra-regional payments can sometimes take up to 2 weeks to complete.
PAPSS began commercial operations 2 months ago, making it possible for intra-African payments to be made instantly and in African currencies. With PAPSS, a Batswana farmer can buy Kenyan coffee using the Pula; Intra-African trade diverted away from Africa due to foreign currency scarcity will return and African currencies will strengthen. Afreximbank projects to back the continent-wide implementation of the PAPSS with a settlement fund of USD 3 billion.
In the area of standards, Afreximbank is supporting the African Regional Standards Organization to harmonize standards across Africa through grant funding. Several standards have been harmonized covering Pharmaceutical and Medical Devices, Automotives etc.
And because the quality infrastructure that will help in the implementation of the standards is poor in many countries, Afreximbank is developing testing, inspection, and certification centres across Africa, with projects well advanced or underway in Nigeria, Tanzania, Egypt, and Ethiopia.
And because it can only trade what Africa produces, and considering that light manufacturing accounts for about 40-60 billion U.S dollars of Africa’s total imports, especially from Asia, Afreximbank is investing very actively in the development of Industrial Parks and Special Economic Zones (SEZs).
Projects have been completed and are operational in Gabon, Togo, Benin, with development work at various stages in Cote d’Ivoire, Chad, Republic of Congo, Rwanda, Nigeria, and the Democratic Republic of the Congo.
