The African Continental Free Trade Agreement (AfCFTA) can only succeed if countries in Africa can insist on local content – only goods and services produced or manufactured in the continent are traded in the zone.
Managing Director of Lagos Deep Offshore Logistic Base (LADOL), Dr. Amy Jadesimi stated this at the OECD Africa Forum.
Jadesimi noted that products and services to be traded under AfCFTA must be produced or manufactured in the continent, citing economic advantages of free trade zones as capable of decrease costs and increase revenues of companies operating in the zones.
“We need the products and services being traded in the Africa Free Market to be primarily if not entirely home engineered and manufactured.
“International companies can start engineering and manufacturing in Africa now, not only because they will get access to all 1.5 billion Africans, but also because there are local and public sector companies and facilities through which they can set-up and operate locally. Special Economic Zones in Nigeria, such as LADOL and the many Zones being rolled out in countries such as Ethiopia, Kenya and Rwanda are examples of how easy it is for companies to decrease their costs and increase their revenues by operating in such Free Zones,” she said.
Jadesimi noted that the success of LADOL has proven the efficacy of the United Nations Sustainable Development Goals (SDGs) as a framework for the development of new economy businesses and for maximising local content in low income high growth countries.
She explained that countries like Nigeria are full of untapped, easily addressable business opportunities where new economy businesses can create new low cost, high return businesses through innovation and value added solutions for the local market.
According to her, the companies of the future and those that will be the most profitable companies are those that are sustainable. Companies that fail to embrace sustainability may soon become unviable.
Calling for support to companies in Nigeria and Africa, she has this to say: ‘’the first step is great international support from governments and investors for indigenous private companies across the continent – because these are the companies that will create the jobs. Over time organisations such as LADOL, which may start out supporting commodity focused industries will diversify and expand, becoming increasingly sustainable until we reach net zero.’’
She also urged Western countries to better regulate the actions of their companies and institutions in Africa – where many multinationals have been proven to instigate, promote and participate in practices that cause harm to the economies and the citizens in countries across Africa.
“In as much as we recognise that the regulatory environment across Africa needs to improve, we should not continue to have conversations about regulation in Africa unless we also discuss how wealthier countries can better use their own laws and regulations to police the activities of their companies and representatives in Africa,” she said.
LADOL MD reiterated that financial regulation is long overdue stating that “we know that there are trillions of dollars currently invested in negative or low yielding assets in only ten financial markets across the world.
“The world needs new financial regulations, which encourage investment into real businesses over long-time horizons and discourages unstable, short-term wealth creation through trading and complex financial instruments that no longer relate to the real performance of the underlying companies or assets. Such a regulatory framework would drive investment to Africa – which has both the youngest and the most locally underserved population, with vast untapped opportunities to create new products and solutions for the local market in the local market,” said she.