THE recent Kenya Trade and Investment Summit in Johannesburg offered us an opportunity to engage with Kenyan businesses and government on how we can boost trade between Kenya and South Africa, as well as the importance of intra-Africa trade.
Boosting intra-Africa trade is a move in the right direction in spring-boarding the African continent to economic growth through access to more developed markets, greater economies of scale and increased competition for domestic firms.
Some of the fastest growing economies in the world are in Africa and domestic firms could benefit from the flourishing consumer markets in harnessing the continents demographic dividend. Greater integration will consequently assist in creating more jobs and help alleviate poverty through elevated economic growth rates.
A key barrier that hampers trade and investment in Africa is largely due to failing infrastructure, which should be a strategic objective for governments to address in the coming years. High transport costs due to poor regional road and rail networks remains a key factor in limiting the movement of goods within the continent.
East Africa is investing heavily in a Standard Gauge Railway for passengers and cargo transportation that runs between Nairobi and East Africa’s largest port in Mombasa, as well as connecting to Uganda and Rwanda, which is likely to generate new sources of economic growth for the East African region.
Most importantly, African countries need to embrace regional integration and allow the free movement of goods and labour. Of course, countries with socialist inclinations may take longer to reform on these principles; however it’s an imperative pre-requisite for fostering economic development within the continent.
In order for business and governments to grow intra–Africa trade, there needs to be continuous spend on infrastructure, as well as structural reforms to improve the business environments in African counties, so they can attract much needed Foreign Direct Investment in order to achieve sustainable and inclusive growth.
Standard Bank is a truly African bank with a clear Africa focus. With a heritage of 153 years on the continent, we are focused on driving Africa’s growth and have an on-the-ground presence in 20 countries in sub-Saharan Africa. This unique footprint supports our strategy to connect African markets to each other and to pools of capital globally.
The author is the head of Investment Banking Africa, at Standard Bank. The bank is a major player in Kenya and South Africa.