In a recent interview with Investor’s Mag, Jeff Gable, the Head of FICC Research and Chief Economist for Absa, shared his thoughts on Africa’s economic prospects, emphasizing the complexities and potential of the African Continental Free Trade Agreement (AfCFTA). Gable cautioned against unrealistic expectations of immediate success and underscored the need for a long-term perspective.
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“We want to be cautious just because we’re an awful lot of people doesn’t mean that Africa will be a success, and just because you put together a trade area doesn’t mean it would be a success,” Gable said, reflecting on the challenges that have beset the East African Community (EAC) since opening its borders in 2010. “13 years later, it’s difficult to see where the EAC opening the borders has transformed the opportunities in East Africa, something 40 years right.”
Gable stressed the importance of the AfCFTA as a “necessary condition” for Africa’s economic progress. “We know that as we act individually as countries, we’ve been doing that for decades. We know this cannot be the answer. So this is a necessary condition for us making better progress going forward,” he explained.
However, he also raised the question of whether the AfCFTA would be “sufficient in the end,” highlighting the need for an environment conducive to business growth. “You need to generate an environment that business, whether it be local, regional, or global, chooses to come here. That’s what will make or break Africa’s future,” Gable remarked.
Regarding Mauritius’ role as an International Financial Center (IFC) in Africa, Gable saw it as complementary to South Africa’s efforts and other endeavors across the continent. “We don’t need to view this as zero-sum. The actions of one country in this regard don’t harm the actions of another,” he stated, emphasizing the importance of making it easier for capital to flow into Africa.
When asked about the biggest challenge Africa faces, Gable pointed to the “cost of doing business.” He noted that this challenge could manifest in various ways, from infrastructure issues like electricity shortages to bureaucratic hurdles like excessive paperwork at border crossings. Addressing these challenges, he argued, would make Africa more competitive and attractive to investors.