(5 minutes read)
· Akinwumi Adesina, President African Development Bank (AfDB) has said that the Special Economic Zones have not been as successful in Africa compared to Asia and other parts of the world
· Revealing that in Africa, special economic zones are
operating in 38 countries, accounting for annual trade turnover of US$680 million, the AfDB chief executive said that there were many reasons for their lackadaisical performance. Foremost is the limited infrastructure
· AfDB president said that the African Development Bank was investing heavily in closing the infrastructure gap by building energy, roads, ports, ICT and transport corridors
· The bank is also catalyzing setting of the Africa Exchange
Linkage project to integrate stock exchanges across Africa
Akinwumi Adesina, President African Development Bank (AfDB) has said that the Special Economic Zones have not been as successful in Africa compared to Asia and other parts of the world. He was addressing the 5th Annual Meeting of the Africa Economic Zones Organization (AEZO) yesterday (December3).
Revealing that in Africa, special economic zones are operating in 38 countries, accounting for annual trade turnover of US$680 million, the AfDB chief executive said that there were many reasons for their lackadaisical performance. Foremost is the limited infrastructure. Africa’s infrastructure financing gap was estimated at US$64-108 billion annually. Weaker institutional environment and coordination challenges were the other set of challenges. Limited access to financing to develop well-integrated value chains is the third fault line. The primary focus of the Special Economic Zones on exports alone has weakened the linkages with the wider local economy. This has limited transfer of skills, technology and market access, which led to creation of islands of wealth in the midst of wider poverty.
AfDB president said that the African Development Bank was investing heavily in closing the infrastructure gap by building energy, roads, ports, ICT and transport corridors. The bank is also catalyzing the setting of the Africa Exchange Linkage project to integrate stock exchanges across Africa. An integrated capital market with capitalization in excess of US$1 trillion, representing 90% of Africa’s total equity market will be a game changer, he stressed, adding that the network of stock exchanges would increase liquidity and enable seamless trading platforms across the continent.
Adesina said that The African Continental Free Trade Area to be operational in January 2021, will have a market of 1.3 billion people and a combined GDP of US$3.4 trillion to become the largest free trade zone in the world. Special Economic Zones, he said, should allow Africa to now develop its manufacturing capacity, competitive regional value chains, for exports into the African Continental Free Trade Area, and to expand their integration into global value chains.
The African Development Bank, he said, was supporting the development of Special Agro-industrial Processing Zones (SAPZs to focus on agro-industrialization, by investing massively in integrated infrastructure, in areas of high potential agricultural value chains; including processing, marketing and logistics. It would also unlock vast economic and trade opportunities from value- added agriculture in Africa. Five SAPZs are already nearing implementation, in countries like Ethiopia, Togo, Senegal and Guinea. Several more such entities are planned, he underscored.
