AFRICAN BUZZ
GHANA:
AfDB A BOOST FOR GHANA
Bawumia cited various bank-supported projects, especially in
the areas of infrastructure, agriculture and technical innovation,
as examples of interventions that have helped to boost the
government’s efforts to consolidate the economy.
“Those are areas very critical for us and we are happy to have the
African Development Bank (AFDB) helping us. You have been in the
trenches with us and things are now going well,” says Bawumia.
Bawumia adds that Ghana’s economy has begun to show great
potential following three years of bold fiscal policy reforms,
which included the adoption of a law capping fiscal deficit at 5%
of Gross Domestic Product as part of measures to enhance debt
sustainability and win investor confidence.
“These are not easy to do but it had to be done and we’re
seeing the benefits. All the indicators are in the right direction;
macroeconomic conditions have stabilised, agriculture is doing
well, interest rates have come down, while inflation has also
come down to its lowest since 1992,” says Bawumia.
Ghana is looking to the AfDB for investment in an integrated
aluminium industry, using the country’s large bauxite deposit as
raw materials. The bank should also consider supporting Ghana
to tackle climate change in line with the group’s crosscutting
interventions, the vice-president says.
Key financing for development to the country includes mobilising
a seven-year USD600-million syndicated receivables-backed loan
for the Ghana Cocoa Board to improve productivity and domestic
value addition; approval of the first phase of the Eastern Corridor
Road Project estimated at USD102-million; and an urban transport
project entailing the construction of a three-tier interchange.
SOUTH AFRICA:
AFRICA CALLS SUPPLIERS
Traditionally, South African suppliers have focused on the
Southern African region. According to Duncan Bonnett,
director of consultancy firm Africa House, 85% of South
African expansion into the rest of Africa has been purely into
the Southern African Development Community (SADC) and
especially into South African Customs Union (SACU) and
countries like Zimbabwe, Zambia, Malawi, Mozambique and the
southern parts of the Democratic Republic of the Congo.
The African Development Bank’s support for the west
African nation Ghana has boosted its government’s efforts to
consolidate the economy. This is according to Ghana’s vice
president, Mahamudu Bawumia.
Suppliers of yellow metal should not be blind to opportunities in the
rest of Africa.
the rest of Africa and the proliferation of early stage projects in
Angola and Mozambique and in East, West and North Africa, and
the completion of a bridge across the Zambezi River that links
Botswana and Zambia, which now makes it possible to drive
from South Africa to the Democratic Republic of the Congo
(DRC) and the Great Lakes region without significant delays.
According to Mahendra Dedasaniya, Africa leader for
infrastructure and capital projects at Deloitte, the African Free
Trade Area (AfCFTA) will stimulate regional trade and the sharing
of skills and technology across Africa. It will hopefully also
make it easier for plant and equipment suppliers to get their
machinery into other African countries.
“The AfCFTA came into force this year and is expected to boost
economic integration, liberalise trade in goods and services
(through reducing tariff, but mostly non-tariff barriers to trade)
and increase intra-Africa trade by 60% in the next three years.
These developments are set to contribute towards the regional
growth projection of 4% in the medium term, up from an
estimate of 3.5% in 2018,” Dedasaniya tells African Mining.
Bonnett says that there are many opportunities for South
African companies in the rest of Africa, but they need to get a
foot in the door now as there will be substantial competition
from global suppliers to gain access to these markets. He adds
that the AfCFTA will make it significantly easier for South African
companies to do business in the rest of Africa.
“The biggest benefit for South African companies is that they
will get preferential access to a range of markets that they’ve
never had access to before, including critical markets in East and
West Africa.
Traditionally, South African companies have operated successfully
in East Africa only up to Tanzania. North of that, the cost of doing
business becomes just too expensive. However, when the new
trade agreement is implemented, South African companies will
gain preferential access into the substantial markets of Kenya,
Uganda and Rwanda in East African, and into Côte d'Ivoire, Ghana
and Nigeria in West Africa,” Bonnett tells African Mining.
“It is proof that where South African companies do have preferential
access though, they do well. But we remain most competitive and
thrive in countries close to us, where our products are well-suited
and well accepted, but outside of the immediate neighbours we
don’t have a particularly strong footprint,” says Bonnett. Research at Deloitte indicates that Africa offers one of the
best returns on investment for infrastructure projects. Deloitte
tracked 450 infrastructure projects valued at more than
USD50-million to compile their Africa Construction Trends 2020
report. All these projects broke ground after 1 June 2019 and are
valued at an estimated total of USD497-billion. The projects are
situated in 28 different countries (out of 54 countries in Africa).
There are three factors that might change this mindset in future:
the African Free Trade Area (AfCFTA); the growth prospects in This is only the tip of the iceberg, as there are thousands of
smaller projects ongoing in all African countries of which not
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African Mining April 2020
www. africanmining.co.za