Senator Shettima who gave the charge during the African Economy of Scale Plenary on the sidelines of the ongoing World Economic Forum (WEF) in Davos, Switzerland, regretted that African trade was still hovering around three per cent of world trade.
The vice president also stressed the need to increase intra-Africa trade currently at 15 per cent and its potential to raise the continent’s GDP are some of the compelling reasons why the African Continental Free Trade Area (AfCFTA) agreement must not be allowed to fail.
“African trade still hovers at 3% of world trade. These indices must be reversed and ramped up. I believe this is one of the key concerns of the Africa Economy of Scale.
“It must be borne in mind that African economies are still largely primary and basic in nature, with considerable dependencies on the global economy. Most countries on our continent are still known for their export of raw materials, minerals and food crops. African economies understand that we must begin to add value to primary products like cash crops and step up to secondary and tertiary product manufacturing,” the VP in a statement by his spokesman, Stanley Nkwocha stated.
In his brief remark at the event which was held at Kurpark Village, Davos-Klosters, Shettima pointed out that it is for this reason Africa is considered by top analysts the world over as a growth economy in dire need of investments and infrastructure.
He however told African leaders that economies of scale “portend the ability to do more” by coming together and form “a more formidable unit, with a bigger voice and stronger negotiating abilities.”
He urged them to run faster and purposefully to catch up with the rest of the world in eradicating crass poverty on the continent and prove that the continent could be a significant contributor to world productivity that can “integrate better with the rest of the world in an age when Artificial Intelligence and Machine Learning are redefining human interactions and existence.”
He continued: “Size matters in negotiations and scalability. And African nations need more productivity to improve our people’s standards of living. We need more food, more affordable housing, a burgeoning textile sector to clothe our people, more energy/power, more social services for our poor and disempowered people, cheaper, better transportation systems. Our work is well cut out for us.
“Pooling resources together as African nations allows us to cut the cost of producing many of those necessities for our peoples. We need to achieve higher levels of efficiency both in our public and private sectors.”
The vice president noted that while African trade agreement is projected to boost the continent’s GDP by $450 billion in the next one decade, the urgency to actualise an African economy of scale is the reason behind the continent’s trade cooperation as demonstrated by the AfCFTA.
He lauded the idea of economy of scale for Africa, describing it as timely considering the fact that the continent is seen as the last frontier for development, with many opportunities presenting themselves.
VP Shettima observed that the challenges dogging Africa in the face are not drawbacks, but opportunities for engagement, productivity and profitability, even as he pegged the continent’s infrastructure deficit at trillions of US Dollars.
Highlighting some of the deficit, he said, “51 million new housing units have to be built at the very minimum. We need schools, stadiums, community centres, roads, rail networks, airports and water transport, technology enablement and major interventions in the energy sector, among others.
“Viewed from space, Africa still presents as the darkest continent. This narrative can be changed by a combination of efforts and deep collaborations among ourselves and the global community. I aver that the greater challenge is within ourselves.
“The concept of Africa Economy of Scale is therefore a wakeup call to all of us here seated, to embrace a major leap of faith, away from the usual sordid monikers with which we have been identified, as a people and as a continent. There is a need to prepare a much better Africa for our children and those unborn. In an Information Age, we can no longer hoard information and set small dreams that will not impact our world.”
Senator Shettima further acknowledged the efforts made by African youths in repositioning the continent, saying they “have created major tech-driven private-sector organisations, some of which are unicorns – with over $1 billion in terms of capitalisation.
“The Pan-African Payments and Settlement System (PAPSS) is a product of the technological prowess of our young professionals, working within a larger organisational structure. In the creatives and arts sectors, African youths are making a profound impact on and outside the continent. There has also been a major push in the outsourcing industry, for African youths to show more relevance by targeting remote work all over the world. The terrain is being redefined,” he added.
In a related development, the Vice President who also spoke at a breakfast event with African Heads of State to launch the Action Plan for AfCFTA on the sideline of the WEF, expressed optimism that AfCFTA would help galvanise GDP growth on the continent, just as he said based on the World Bank projections, AfCFTA will increase Africa’s GDP by $450 billion in 2035, and exports by more than 81 per cent.
He said, “African trade is to be boosted by 52.3% by 2025. We should increase these targets and look at the trillions of dollars. African countries need to move quickly to iron out whatever agreements and impediments are remaining to ensure free and smooth trade. Issues around rules of origin negotiations must be completed.”
To achieve set objectives, VP Shettima suggested that “information sharing with private sector players must be optimised and prioritised,” even as he said trade is a private sector imperative, which governments only facilitate
He further noted that “negotiations have turned out to be too slow, with clashes between national and continental priorities, leading to too few consummated deals between countries since January 2021 to date.
“Looking ahead, there is a need for speed and cohesion among African countries. The idea of AfCFTA must not fail, and there is no room for mediocrity in today’s world,” the VP added.
Citing examples of trade unions in Europe, the Americas and Asia, the Vice President said, “African trade cannot continue to be externalised even though we have increased intra-Africa trade from a mere seven per cent a decade ago, to about 15 per cent today.”
According to him, while Intra-European Trade is around 70 per cent, there is a need for African leaders to do a lot better in organically empowering countries on the continent and solving their own problems.
He urged Africa’s private sector players to be proactive in stepping up to the plate to occupy their pride of place in trade on the continent.
Meanwhile, armed with Nigeria’s enviable position as Africa’s largest economy, coupled with ongoing efforts by the Tinubu administration to diversify the economy from oil with deeper footprints in technology and the creative sector, among others, Vice President Shettima on Wednesday told foreign investors that the country is on the right path to becoming their delight.
The Vice President stated this on Wednesday at a forum to welcome investors to a parley with Nigerian officials on the sidelines of the ongoing World Economic Forum in Davos, Switzerland.
Sen. Shettima said the President Bola Ahmed Tinubu administration is on a drive to “bring in the entire ecosystem of investors, from private equity players, to venture capitalists, impact investors and competent contractors from all over the world to partner with us in this quest.”
On the potentials in the country as a major attraction for investors, the Vice President said, “Nigeria occupies an enviable position as the continent’s largest economy and with the largest population. Nigeria is currently repositioning her economy away from crude oil dominance, with deeper footprints in technology, arts, culture, creativity and industrialisation.
“Recent developments in our energy sector portend that Nigeria is leading the region in energy security and energy transition. International and domestic energy companies are already engaging the global community and subscribing to the innovations of the future”.
Sen. Shettima maintained that Nigeria remains open to engage with willing nations on mutually beneficial and sustainable terms, underscoring why the countries are a reference point for best global practices.
“We have our export, Dr Ngozi Okonjo Iweala heading up the World Trade Organisation, meaning that Nigeria must show to be a shining example in the best global trade practices.
“Recently, Nigeria removed the infamous 43 trade items from foreign exchange ban, opening up the space entirely, in what is actually a very bold move, signifying full trade liberalisation,” the VP noted.
On efforts by the Tinubu administration in ensuring a conducive environment for investment, VP Shettima said, “Nigeria also totally liberalised the downstream petroleum sector, removing the burdensome subsidies and also we instituted a market-driven foreign exchange market, which outlawed multiple exchange rates in the economy.”
He said the country intends to participate fully in the Global Value Chains (GVC) at many levels, aiming for good value capture as it becomes even more relevant to global supply chains.
He listed priorities for the country to include “repositioning our energy sector, investing in major infrastructure like our rail system, roads, new seaports, and digital technology for our vibrant youthful population to engage the world.
“Nigeria also targets a $1 Trillion economy within 8 years and this requires that we grow our economy in leaps and bounds. A new era of accountability and productivity is being instituted under the guidance of President Bola Ahmed Tinubu.
“Nigeria is an investor’s delight. There is so much to do. So many sectors to engage in. We intend to make the country into a huge construction site in a matter of months. We have rejigged our revenue administration, and will soon match up with some of the most efficient countries in the world.”
Sen Shettima also spoke about the emergence of new sectors such as the Blue Economy, Digital Economy, Steel sector, Gas Subsector, and Alternative Energy, among others.
In the same vein, Vice President Shettima has said under President Bola Ahmed Tinubu a lot is being done to reposition Nigeria’s image, tackle remaining pockets of insecurity and project Nigeria to the world.
He disclosed this at an event to celebrate Nigeria’s cultural richness and diversity on the sideline of the ongoing WEF in Davos.
The VP said, “Nigeria’s diversity is her strength. We have over 300 different languages. Each culture has something to learn from others. And something to teach.”
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