Abuja, Nov. 29, 2023 (NAN) The Director of Macro Economic Policy Division, Economic Commission for Africa (ECA), Adams Elhiraika, says Africa needs to integrate to create regional value chains that support industrialisation.
Elhiraika, in an interview with the News Agency of Nigeria (NAN), said African economies were small and, as such, needed to integrate to attract investment within and outside the continent.
He said that although this had started, it was happening at a slow pace.
”We need to increase this pace by opening borders for the free movement of people, goods, and services.
”African countries, you know, need to look at industrial development as a must and not just focus on short-term and medium-term challenges.
”Industrial development requires long-term commitment and institutional and government systems that promote industries.”
According to the director, the currency issue is one of Africa’s major setbacks.
Elhiraika said the African Union (AU) had led this discussion on several forums, and the discussions would probably continue.
However, predicting how soon Africa would achieve a common currency was difficult.
”I am not saying a common currency is not possible, but I know that for the common currency to be successfully adopted, you need to have a significant integration of African economies.
” Coherence and macroeconomic policy harmonisation, in particular, are crucial.
So there are important steps to be taken before we decide on having common African currency, ” he said.
While urging countries to promote the expansion of domestic bond markets, the director said local currency bonds and capital markets were essential.
According to him, this will promote domestic capital finance on the continent and ensure access to loan finance within our countries.
He said it would also strengthen Africa’s financial system through fiscal policy and financial sector development in general.
According to Elhiraika, African countries have opportunities and huge potential to rely more on domestic resource mobilisation.
”In our estimates in ECA, for example, African countries with an average tax Gross Domestic Product (GDP) ratio of about 15.6 per cent have the potential to increase their tax GDP ratio by 12 per cent and 20 per cent.
”This is a huge potential; the global average is about more than 30 per cent, so the potential is huge for Africa.