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Al-Mashat: Intra-African trade fuels economic growth


Al-Mashat: Intra-African trade fuels economic growth

Dr. Rania Al-Mashat, Minister of Planning, Economic Development and International Cooperation and Governor of Egypt to the World Bank, She commended the final statement issued by the African Group of Governors of the World Bank Group and International Monetary Fund. The meeting, held in Abuja, Nigeria, from August 1-3, 2024, focused on "Facilitating Intra-African Trade as a Catalyst for Sustainable Development in Africa." Sponsored by Nigerian President Bola Ahmed Adekunle Tinubu and chaired by Finance Minister Wally Edun and Nigeria's IMF/World Bank Governor, the event was attended by the Ministry through its Central Administration for Multilateral Development Cooperation and Financing.

The final statement outlined four key areas to boost intra-African trade: (1) strengthening and digitizing the continent's payment systems; (2) improving energy access and affordability; (3) maximizing partnerships with multilateral development banks; and (4) reforming the global financial architecture. Given escalating geopolitical tensions, the statement urged Bretton Woods institutions to support member states impartially and neutrally, consistent with their own policies.

She emphasized the need to overhaul the global financial system and strengthen partnerships with multilateral development banks to bolster African trade. She highlighted that increased intra-African commerce is essential for driving economic growth and fostering comprehensive, sustainable development.

The statement emphasized the need to strengthen Africa's comprehensive payment system through digitalization, enhance regional financial market integration, and promote cross-listings of securities to boost investment. By accelerating financial integration and diversifying asset allocation, the statement aimed to address liquidity challenges that have hindered trade and investment on the continent.

The statement emphasized the urgent need for all African Union member states to adopt the Pan-African Payment and Settlement System (PAPSS). It called on multilateral development banks to support this initiative by strengthening Africa's payment infrastructure and digital platforms, enabling all countries to fully benefit from the African Continental Free Trade Area (AfCFTA).

The statement also emphasized the importance of developing robust regional ICT infrastructure, coupled with strong institutional, technical, and human capacities within governments. It called for increased private sector investment to strengthen existing payment systems, exploring cost-effective cross-border transactions, interoperability, and data analytics. Enhanced security protocols are essential to protect against fraud, money laundering, and cyber threats, enabling swift responses to cyberattacks.

It also emphasized expanding innovative investments in digital infrastructure to dismantle technological barriers and foster technological advancements. This would create an effective payment infrastructure and robust payment solutions that meet standards of efficiency, accessibility, manageability, and flexibility.

On the other hand, The final statement underscored the critical importance of accelerating Africa's energy access. It called for intensified technical assistance and financing, and full commitment to the World Bank, African Development Bank, and United Nations initiative to electrify 300 million Africans by 2030. The statement emphasized the need to double investments in transportation and energy infrastructure, improve the regulatory and legal environment for attracting private energy investment, and leverage partnerships with multilateral development banks. This includes securing concessional financing, promoting innovative financial tools, and collaborating with African development banks and think tanks.

The statement addressed the urgent need for sustainable debt solutions to create fiscal space for developing countries. This would allow for effective investment in Sustainable Development Goals, financial stability, and reforms to attract private investment. The statement emphasized the crucial role of the International Development Association (IDA) in providing concessional financing, particularly to sub-Saharan African countries. This support is vital for addressing pressing challenges such as climate change, food insecurity, energy and water scarcity, digital transformation, and regional integration.