Business
Afrexim Urges Africa To Diversify Economy
African Export – Import Afrexim Bank has called on Nigeria and the sub-saharan Africans in general to work towards a project venture that would contribute to the diversification of Nigeria’s economy. Mr Jean Ekra, president, Afrexim Bank said Africa’s current share of world exports accounts for about 2 per cent of global trade and with its export basket and market highly concentrated.
Speaking recently at the 2009 annual lecture of the Chartered Institute of Bankers of Nigeria (CIBW) he said, a larger part of Africa’s poor trade performance has been traced to economic concentration and limited diversification.
“Available data confirm that trade and economic diversification were key to the rapid economic development achieved by the newly industrialised countries in East Asia Afrexim Bank in recognition of the invaluable contribution that economic and trade diversification could make towards better trade and economic growth performances of African economies, deems it an honourable duty to contribute towards expansion of direct and indirect infrastructure needed to diversify African economies and exports away from the production and export of primary commodities,” he said.
Ekra noted that in many African countries,production of export commodities constitutes the main form of activity and driver of GDP growth. The case is particularly strong for those economic dependent on one or two export commodities such as oil and gas in Nigeria, Libya, Gabon, and Equatorial Guinea; Cotton in Mali and Tea and Coffee in Kenya and Uganda.
Analyzing transformation of an underdeveloped economy, he said, this is on account of the fact that price movements of internationally traded goods and the consequent variations in volume and product composition of trade impacts the gains a country could obtain from trade, these gains are traditionally measured by the terms of trade (that is, the evolution of a country’s export price relative to its imports and the purchasing power of its export which is defined as the export value deflated by imports.