Op-Ed: How Africa can create a Continental Free Trade Area

PUBLISHED: Fri, 24 Nov 2017 15:52:35 GMT

Words by Aboubaker Omar Hadi, Chairman of Djibouti Ports and Free Zone Authority

Ours is a continent rich in resources. From the coffee beans and cotton to mineral ores and oil wells, Africa is world-renowned for its raw materials.

However, exporting raw materials alone will not allow Africa to reach its potential. Indeed, the recent slump in global commodity prices has served as a harsh reminder that our traditional reliance on raw materials needs to evolve. It is only by transforming our commodities into value added goods that Africa will reap the full benefits of our natural strengths. Transforming our resources will create larger profit margins, growth and jobs. This transformation will, however, require a big industrialisation drive across the continent to foster trade and growth.

In the wake of Africa Industrialisation Day, which this year reflected on how to accelerate Africa’s progress towards the creation of a Continental Free Trade Area, we must also consider the supporting infrastructure required to make this pre-eminent objective a reality. All economies – on the global scale, but also on the regional and local level – demand a high level of circulation, which is only possible through the development of the necessary infrastructure.

In Africa, the lack of infrastructure is one of the greatest inhibitions preventing transformative growth. Ours is the only continent in the world without a transcontinental railway; in a continent where 16 out of 54 countries are landlocked, this is a real issue. Our infrastructure development therefore needs to be multimodal, ensuring that our coastlines are connected to our railways, airways and highways so that in-land countries and coastal countries are sharing in each others’ successes.

Beyond our transport links and trade zones, we also need to develop one further key aspect in our infrastructure framework: energy production. Around 600 million Africans still live without power on a daily basis. Not only is this unsustainable for our own populations but it is untenable if we are to attract foreign investors. To truly be players on the global stage, Africa needs to make sure that it has the capacity to support the industrial needs of the best of business from around the world.

As the Chairman of the Djibouti Ports and Free Zone Authority, I’ve made this industrial transformation, of both my country and the surrounding region, a priority. In the last year, we have completed and opened three state-of-the-art port facilities which have the capacity to welcome over 30,000 ships every year. As Djibouti sits on two of the world’s busiest maritime trade routes, our country has a key role to play in regional development, by ensuring our neighbours also benefit from this strategic location. Thus, the recently launched Addis Ababa-Djibouti railway will allow the continent’s fastest growing economy,

Ethiopia, to profit from our maritime façade. Already, over 90% of Ethiopia’s trade passes through Djibouti and infrastructure development is vital in ensuring that these trade routes are as efficient as possible.

In terms of our energy infrastructure, Djibouti has developed strong partnerships to strengthen investment in vital gas projects. Only last week, a memorandum of understanding was signed between Djibouti and the Chinese company Poly CGL. This MoU is the start of an important process which will see investment in a gas pipeline, a liquefaction plant and an export terminal in the south of the country, in Damerjog.
Industrial transformation is a long term effort. We will only achieve it with methodical determination and cooperation, as we enter a turning point for the continent. Africa is the second most populated continent in the world with over 1.2 billion inhabitants. By 2050, it is estimated that around a quarter of the world’s population will be living on the African continent. Several African countries are among the fastest growing in the world in terms of economic growth. Out of the 10 fastest growing economies in the world, 3 of them are located in East Africa: Ethiopia, Djibouti and Tanzania. Now is the moment at which we must work hard to keep pace with the rate at which our continent is transforming.


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