African countries must move their economies away from commodity dependence in order to move their people out of poverty, Dr. Benedict Oramah, President of the African Export-Import Bank (Afreximbank) said today in Sharm el Sheikh, Egypt.
Speaking during a panel discussion at the Africa 2017 Forum organized in the Egyptian resort city, Dr. Oramah said that the countries should, instead, implement the diversification of their economies and engage in production and trade in higher value goods, similar to what the Asian nations did, in order to move out of poverty.
He warned that if Africa failed to move in that direction, the countries would fall deeper and deeper in to poverty
According to him, Africa should not depend on aid and grants for its development as there is no record of any country having achieved development on the basis of aid and grant. In the alternative, African countries should wean themselves from that mindset and should make sure that their development projects were bankable in order to attract the necessary capital.
Dr. Oramah stressed the need for the continent to come together under the Continental Free Trade Area (FCTA), saying that the evidence was that continents that traded within themselves developed faster. According to him, African markets are too fragmented, hence the need for them to come together.
At the same time, the continent must leverage on its strengths which included its large and youthful population, its huge resource base, and the availability of abundant labour which could be tapped by focusing on labour intensive industries and engaging in light manufacturing, he added.
Dr. Oramah highlighted the important role of intra-African trade in driving African economic integration and announced that Afreximbank was introducing a payment platform that would support such trade by enabling cross-border payments in local currencies.
He noted that globalization, which brought about free movement of capital but did not allow the free movement of labour, and which favoured bilateralism over multilateralism, had placed Africa at a disadvantage, given that smaller economies were likely to always come out the losers in negotiations with larger economies.