Construction World July 2023

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ACCELERATE INFRASTRUCTURE DEVELOPMENT TO PROMOTE INTRA-CONTINENTAL TRADE SAYS PROJECT MANAGEMENT INSTITUTE The annual commemoration of Africa Day marks the Organisation of African Unity (OAU) founding in 1963. Now called the African Union, 2023 is the diamond jubilee year of the OAU, the continental body representing 55 member states that make up the African Continent. While the anniversary is being celebrated under the slogan, "Our Africa Our Future," at the heart of this year's celebration is the vision and implementation of the African Continental Free Trade Area (AfCFTA). The AU theme for 2023 is Acceleration of AfCFTA Implementation.

O nce fully implemented, the trade pact will create the world's largest free trade area for goods and services across member states and deepen economic integration within the continent. The trade area created by this agreement is expected to have a combined gross domestic product of approximately USD3,4t. Adopting AfCFTA is also expected to enhance mobility bringing transformative change and tremendous economic and business opportunities. According to the World Economic Forum, AfCFTA will provide investors unparalleled access to a population of 1,7 billion people and consumer spending reaching USD6,7b by 2030. The report highlights automotive; agriculture and agro-processing; pharmaceuticals; and transport and logistics as the four sectors expected to see a rapid acceleration in production and trade volumes, given they have a high potential to meet demand with local production. Currently, intra-African trade accounts for approximately 14% of total trade in Africa, compared to significantly higher percentages achieved by Europe, North America, and ASEAN, which have reached intra-regional trade levels of around 60%, 40%, and 30%, respectively. To address this disparity, AfCFTA aims to facilitate the growth of intra-African trade by eliminating trade barriers, harmonising trade rules, and fostering synergies among African nations. "Goods do not move independently," says George Asamani (pictured ), MD, Sub Saharan Africa, PMI. "Infrastructure is among the key elements essential to making AfCFTA work effectively. The development and improvement of power, transport, and communications infrastructure and the establishment of efficient road, air, port, and rail networks are crucial for enabling seamless trade facilitation and promoting economic integration.” South Africa, the continent’s most industrialised economy,

is the largest intra-African trading nation, accounting for around 20% of total trade. After recording the fastest growth rate in 2021, Southern Africa’s share of intra-African trade increased to account for more than 44% of total intra-African trade. The Southern African region is represented by Mauritius, which joins Cameroon, Egypt, Ghana, Kenya, Rwanda, Tanzania, and Tunisia in AfCFTA's Guided Trade Initiative (GTI). The GTI seeks to allow commercially meaningful trading and to test the operational, institutional, legal, and trade policy environment under the AfCFTA. At least 96 products will be traded under the GTI, and the initiative will be reviewed annually to expand the list of countries. "Increasing intra-African trade will bring numerous benefits to the continent, such as industrialisation, economic diversification, and the development of natural resources, commodities, and agricultural produce. However, it is important to acknowledge that this growth will significantly burden the associated infrastructure like roads, railways, power, ports, and telecommunications," adds Asamani. There will be substantially increased demand for new industrial parks and Special Economic Zones. These parks need to be financed and built." The African Development Bank estimated that Africa needs infrastructure financing of USD130-170b annually (pre Covid), given its rapid population growth and urbanisation. South Africa’s infrastructure investment gap will reach USD293b by 2030 unless it increases investment to meet the targets set under National Development Plan. "It is abundantly clear that AfCFTA is the cart, and infrastructure will be the horse that pulls it forward. Megaprojects will be crucial to the future of AfCFTA, but the problem is that these projects often go off the rails, either regarding budget or time—or both. For AfCFTA to succeed,

12 CONSTRUCTION WORLD JULY 2023