Dear Sirs,

I am a young aspiring business lady from Kenya. I have nursed my dream of being a successful business lady with no boundaries since childhood but at a time when my dream needs to be realized it seems impossible. It is not just for me but many “ordinary” Africans are sharing these challenges. Our honorable leaders, I know by virtue of your positions it may be hard to experience what we are going through as ordinary citizens of Africa aspiring to trade and invest on the African continent. It is easier for us as Africans to do business with other continents than it is within Africa. In fact, according to the World Bank’s annual [1]“Doing Business”report, sub-Saharan Africa is, on average, the most difficult place to do business in the world.

The challenges are many. Sirs, I find it hard to understand that when I travel to our neighboring country Uganda I have to do transactions in US Dollars. When I was traveling to Nigeria and Ghana I couldn’t buy their currencies in my country. I almost starved in Ghana not for lack of money but because they couldn’t accept to change my Kenyan shillings, they wanted dollars. Do you ever go through these kinds of problems leaders? These multiplicities of inconvertible currencies which are all over Africa are major constraint to conducting business within Africa.Why not come up with a common currency for Africa like we have the Euro or US Dollar? It was until recently that I knew about the South African Rand, Nigeria’s Naira, Ghana’s Cedes and Zambian kwach but I knew about dollars as soon as I understood what money is. As one of the mechanisms to support intra African trade and investment, we should work towards a common currency if not for the continent, at least for the regional blocs. ECOWAS Dollar, EAC Shilling, SADEC Rand and another one for the Central Africa will help strengthen trade and investment in those regions.

The World Bank and the International Monetary Fund (IMF) are more popular in Africa than the Bank of Africa. Why? Why can’t you our honorable leaders work towards development of regional institutions that can provide finance, credit and guarantee for crossborder trade. We have regional blocs in place and for a start we should start with strengthening the regional institutions before pulling our resources and focusing on the continental institution. We need our own IMF and World Bank and yes we can have them if you decide to bring them here.

Sirs, another one of the fallouts of the global financial crisis has been the curtailment of trade credit and finance. Given the greater perceived risks of intra African trade, the credit squeeze has tended to be more for such trade. This calls for more efforts in the development and strengthening of African financial institutions and mechanisms that accord high priority to the promotion of intraAfrican trade and investment. Institutions such as COMESA PTA Bank, ECOBANK, the East African Development Bank, the African Export and Import Bank (AFREXIM) and the African Trade Insurance Agency (ATI) require an extended input. I am not an economic expert but I am convinced that if as our leaders you can focus on strengthening them it will go a long way in boosting intraAfrican trade

In general, it seems easier to secure finance for Africa’s trade with the outside world than for intraAfrican trade. With this African equivalent of the IMF; Africa will have a well-developed and functioning financial system that will spar effective participation of African countries in global trade and for the boosting of intraAfrican trade for easy securing of finance within Africa.

As we strive to ease the way of doing business within Africa, as our leaders you should also work towards unifying us behind a common African language: The African landscape is characterized with numerous African languages ranging from different national languages to vernacular languages. Communication is the key to encouraging economic integration. I understand when you go to those conferences you always have translation services but for us it is hard to access them in the context of business. The language barrier thus hinders the economic integration within Africa as people cannot express themselves if they don’t speak the same language.

People can buy goods online and have them delivered from the US or elsewhere in Europe. There are rules and regulations protecting this kind of trade. In Africa, I will think twice before committing my money in this kind of trade. There is no protection and therefore one is susceptible to fraud. As leaders you should come up with some mechanisms to secure trade in this context. We also need enactment of continental common laws for the protection of buyers and sellers: The states apply different market economies, while others apply the common market economy; some use the free market economy or the mixed market economy. This is a challenge to the buyers and sellers since in some economies; there is a lot of government intervention while in others there is little government intervention. If this could be harmonized, then there would be easy market integration.

Free movement and trade go together sirs. To enable us trade and invest easily there is need to ease movement across our African countries. Restrictions to movement across our countries or the exorbitant charges for visas hamper our movements and thus our trade. Things like trade tariffs, quotas, exchange controls, import licensing and embargoes charged on imported goods –where imported goods are charged a lot of tax before they are released into the markets of the importing country also work negative in promoting intra African trade especially when fellow African states are involved. This discourages some states as they term this a loss and opt to consume the goods themselves and trade with other European or American states.

And sirs lest you forget, insecurity in a country is the source of instability both politically and economically. Some countries in Africa are victims of terrorism and other criminal activities. As we seek to strengthen our institutions, it is paramount that we look at our security as well. Insecurity leads scares away investors due to the associated losses. If you can invest in security then investors will be free to trade and invest anywhere in Africa thus expanding development.

Sirs, if you can implement what I have outlined in this letter, I am sure we will be headed for strengthened African Financial institutions and we will have mechanisms in place to support intra African trade and investment will yield a prosperous continent.

Yours faithfully

Elicah


[1]Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises

Advertisements