Internal trade barriers are “not the issue” as far as promoting business growth in Africa is concerned but rather poor communication between member states, says a top delegate and trustee of the newly established African Investment Climate Facility, Ugandan businessman William Kalema.
Kalema, director of Umacis Consulting in Kampala, said tariffs are, in fact, rather low among African states and even if they were to be removed altogether, that would not necessary foster rapid business growth on the continent.
In an interview with I-Net Bridge, Kalema said having more than one trading block on the continent presents certain problems as the privileges associated with one may clash with those “of another”.
For example, Namibia was a member of the Common Market of Eastern and Southern Africa as well as the Southern African Development Community. That means that the importation of goods from Egypt are free of duty into Namibia, but in terms of the South African Customs Union a tariff would normally be imposed.
Kalema’s views contrasts with that of software company SAS CEO Jim Goodnight, who said at the start of the three-day World Economic Forum on Africa being held in Cape Town that Africa should focus on its internal barriers to trade. Suggesting that Africa should become a free market, Goodnight said certain African countries have high trade barriers in place.
Kalema, questioning what an African common market would mean, said low levels of trade within Africa is an issue but argued that this relates more to poor communications between the states — including infrastructure and telecommunications linkages between African states.
That is where the African Investment Climate Facility will come in — which he described as a mean and lean organisation with a limited lifespan of seven years.
For example, if there were a problem at a particular port, then the facility could assist in developing linkages with the African Development Bank and the relevant governments. The facility — with input from the private sector — could work with African governments to identify problems in a range of areas.
The African Investment Climate Facility — officially launched on Thursday with about $100-million — is a public-private partnership aimed at making Africa a better place to do business by removing obstacles to domestic and foreign investment.
Initial sponsors of the facility include Anglo American plc, Royal Dutch Shell and Shell Foundation, Unilever plc, SABMiller, the United Kingdom’s Department for International Development, Ireland, The Netherlands, the European Commission and the International Finance Corporation. — I-Net Bridge