Professor Benedict Oramah at the Global Expo
His Excellency the President of the Republic of Botswana, Dr Mokgweetsi Eric Keabetswe Masis, Distinguished Guests, Exhibitors, and Conference Delegates.
Thank you very much for giving me the honor of delivering a Keynote at the official opening of this very important event. The Global Expo Botswana has a long history, and I must thank the organizers, the Botswana Investment and Trade Centre (BITC), for keeping alive the seed sown by the former Botswana Export Development and Investment Authority (BEDIA) some 17 years ago.
Special thanks to His Excellency President Mokgweetsi Masisi and his Government for giving me this opportunity. Mr. President, we commend you for your leadership and vision in driving Botswana’s development pushes the boundaries in the fields of healthcare, industrialization, agriculture, and SME development. I was very proud to have been given the privilege of speaking about your numerous achievements as you were honoured by the African-American Institute in New York on 29 September 2022. Congratulations once again, Mr. President, for keeping the African flag aloft. Your Excellencies, distinguished Ladies and Gentlemen, Expos are critical instruments for trade promotion. It is Expos, Trade Fairs, and Exhibitions that expose us to trade and investment opportunities around the world. As we promote intra-African trade and investments in the context of the African Continental Free Trade Agreement (AfCFTA), we must invest more in Expos if we are to break down the 84,000 kilometers of borders that divide us and banish the absurdities in the way that Africans trade.
The conventional wisdom is that lack of infrastructure is the greatest constraint to intra-African trade, but in reality, it is the problem of Trade Information that is creating so many of these absurdities. It is unacceptable that while so many countries in Africa face crop failures as a result of the challenges in Russia from where they import their nitrogen fertilizers, urea and ammonia in Nigeria are exporting large quantities of the same product under long-term contracts to Brazil, the USA, and Mexico at lower prices than what Africans pay; it is unacceptable that while Botswana exports large quantities of quality grass-fed beef to Europe, Egypt buys the same product from Australia and Brazil and at much higher costs than what Botswana sells the product for. It is absurd that Ethiopia buys certain kinds of leather for shoe-making from New Zealand, at twice the price that Burundi, in same East Africa, sells the same product to the world.
Your Excellencies, colonialism divided our continent into 55 atomistic markets that do not see one another as an opportunity. A business person in an African Country knows more about markets in Asia and Europe than he or she knows about an African Country next door. It is this barrier that we must break if we hope to use our collective endowments to improve our economic situation.
Afreximbank is fully committed to expanding access to trade information across Africa, so that intra-African trade share of total African trade can rise from about 16% to our near-term goal of 25%. That is why we launched the biennial Intra-African Trade Fairs (IATFs), in partnership with the African Union Commission (AUC) and the AfCFTA secretariat. The first edition was held in Cairo in December 2018 and the second in Durban in November last year. The two editions combined attracted about 40,000 participants and over 75 billion USD in trade and investment deals. The third edition will hold in November next year in Abidjan, Cote d’Ivoire. We hope that Botswana will once again participate actively in the largest physical marketplace in Africa – which has proven extremely effective in promoting intra- regional trade and investments. It was at the 2018 Intra African Trade Fair in Cairo that the largest intra-African EPC deal in Africa was done between Egyptian contractors and the Government of Tanzania for the construction of the USD 2.9 billion Rufiji dam in Tanzania. The construction of that dam is well-advised. it was at the 2021 IATF Trade Fair that the Government of Malawi concluded a deal to export USD 80 million worth of maize to South Sudan. There is no doubt that the Trade Fair is delivering on its promise of opening African markets for African Businesses.
We are also using digital technology to facilitate universal access to relevant trade information across Africa. We have built an ecosystem of digital platforms which we are now integrating into a super platform called the “African Trade Gateway” (the “ATG”), and we believe we will keep African Markets open and make them accessible. For instance, a Trade Information Portal, enabled by Artificial Intelligence has been developed to predict supply chains, making it easier to identify buyers and sellers, investors and potential investment destinations; A Trade Regulations Portal organizes in one platform, in a standardized format, all the trade and investment regulations policies, and procedures of the 55 African economies. This makes it easier for users to search for country-specific regulations seamlessly. We have also developed and introduced the MANSA Repository Platform which has become the single source of primary data needed to conduct due diligence on African counterparties. The MANSA platform contains the database of African entities who upload their KYC/CDD information which is verified independently, and quality checked. As of the end of October 2022, about 10,000 profiles had been onboarded, to reach 50,000 by end of next year.
Your Excellencies, distinguished Ladies and Gentlemen, the African Trade Gateway also offers digital payment solutions through the Pan-African Payment and Settlement System (PAPSS). PAPSS is a priority initiative of Afreximbank, the AUC, and the AfCFTA secretariat. Its ultimate goals are to integrate Africa’s fragmented financial markets characterized by 42 currencies and high transaction costs. In the aggregate, it costs Africa an amount of USD 5 billion a year to make intra-African payments. Intra- regional payments can sometimes take up to 2 weeks to complete. PAPSS began commercial operations 2 months ago, making it possible for intra-African payments to be made instantly and in African currencies. With PAPSS, a Batswana farmer can buy Kenyan coffee using the Pula; Intra-African trade diverted away from Africa due to foreign currency scarcity will return and African currencies will strengthen.
Afreximbank projects to back the continent-wide implementation of the PAPSS with a settlement fund of USD 3 billion.
In the area of standards, Afreximbank is supporting the African Regional Standards Organization to harmonize standards across Africa through grant funding. Several standards have been harmonized covering Pharmaceutical and Medical Devices, Automotives, etc. And because the quality infrastructure that will help in the implementation of the standards is poor in many countries, Afreximbank is developing testing, inspection, and certification centres across Africa. Projects are well advanced or underway in Nigeria, Tanzania, Egypt, and Ethiopia, with plans to engage other countries soon.
And because we can only trade what we produce, and considering that light manufacturing accounts for about 40-60 billion U.S dollars of Africa’s total imports, especially from Asia, Afreximbank is investing very actively in the development of Industrial Parks and Special Economic Zones (SEZs). Projects have been completed and are operational in Gabon, Togo, and Benin, with development work at various stages in Cote d’Ivoire, Chad, the Republic of Congo, Rwanda, Nigeria, and the Democratic Republic of the Congo.
Ownership interest in some of these initiatives vests in the Fund for Export Development in Africa (FEDA), an impact investment vehicle wholly owned by Afreximbank and headquartered in Kigali, Rwanda. Its partners in the implementation of Industrial Parks and SEZ initiatives are ARISE IIP. FEDA currently has an amount of about USD 700 million committed to it by Afreximbank.
Mr. President, Botswana presents a great opportunity for Afreximbank to demonstrate what can be done under a government that is visionary and with clear development priorities that can be impactful to its people. While Botswana was a Founding Member of Afreximbank, the orientation of policies in the past did not create many private sector-led opportunities that Afreximbank thrived on. Your Excellency, we are pleased that under your leadership, this has changed. Your emphasis on SME development, growing indigenous capabilities, industrialization, and infrastructure that facilitates trade are clear to us. We have also noted your drive to promote Knowledge and Digital economies, including the Creative Industry.
I will like to assure Your Excellency that we have carefully studied how to support your initiatives and will be proposing to your Government an Afreximbank Country Programme for Botswana in an amount of USD 1.5 billion to be implemented over the 3 years to the end of 2025. Through the programme, we will, among others, make available to Botswana the Afreximbank Group suite of products. In this regard, we will work with your Government to create a Joint Project Preparation Facility which we can use to develop projects and bring them to bankability. This Facility will be available to SMEs and also support highly skilled Batswana mining and agricultural professionals in developing their businesses and projects. We will work with the Special Economic Zone Authority to develop 1-2 zones in locations that we will jointly agree on; we will support the development and operationalization of rail infrastructure to improve the movement of goods and people to and from neighboring countries. We will support commercial agriculture for home consumption and exports to other African economies in the context of the USD 2 billion initiative Afreximbank and the AfCFTA secretariat entered into with the World Food Program (WFP) in July this year. We will support the rehabilitation of lodges and the development ofconference and exhibition facilities in the context of Botswana’s drive to boost MICE tourism.
We will continue to support Batswana banks to ensure they have access to trade finance and trade services. Mr. President, we will be happy to work with you to create a Facility that will encourage more indigenous participation in Botswana’s economy. The Facility will have features that will ensure that we reduce the capital constraint to such participation. And in the automotive industry, which is a priority of the Government of Botswana, we will work in the context of the Continental Automotive Strategy to ensure that Botswana benefits from the USD 1 billion Africa Automotive Sector Support Facility that Afreximbank has made available to AFCTA partners.
Mr. President, in your inauguration speech of April 2018, you said, and I quote;
“We still seek to build a Botswana in which sustained development is underpinned by economic diversification. We shall not be satisfied until we have eradicated poverty and social exclusion in order to build a society that provides opportunity and dignity for all. We are committed to a modern Botswana, that is not only open but able to openly compete with the rest of the world while maintaining our founding principles that have united this nation through difficult times.” I want to assure you here today, Mr. President, that Afreximbank is committed to assisting Botswana to achieve all the goals outlined in that speech and many more that the country may set for itself in the coming months and years.
Permit me now, Your Excellencies, distinguished Ladies and Gentlemen, to once again thank our partners in organizing this event, Botswana Investment and Trade Centre (BITC), for the excellent arrangements. Mr. President, I thank you and your
The government once again for your support and courtesies extended to me and my delegation since our arrival.
Finally, special thanks to the distinguished participants for their kind attention.
