Outlook 2022 - AFCFTA:

A Timely Remedy to a BOP Malady

"Increased intra-african trade is what will drive economic development POSTCOVID-19," Secretary-general of the Accra-based AFCFTA Secretariat, Wamkele Mene.

In January 2021, free trading among African countries began under the African Continental Free Trade Area (AFCFTA), kindling hopes for quicker post-pandemic recovery. The AFCFTA, which establishes a single market for made in Africa goods and services, is intended to eliminate tariffs by 90 % and address non-tariff barriers such as customs delays. With an integrated market of 1.2 bn people and a combined GDP of US$3 trn, the AFCFTA provides a strong foundation for industrialization. As of April 2021, intra-african exports stand at about 17% of total continental exports. The AFCFTA is expected to increase the volume of intra-african trade by 52% in 2022. This is expected to increase value addition, help create jobs and boost incomes. While 54 countries are signatory to the trade agreement, 36 of them (an equivalent of 67%) have deposited their instruments of ratification with the depositary. Countries ratifying the agreement can trade with each other based on their tariff concessions and proposed rules of origin. About 90% of the rules of origin are currently in, while the remainder is expected before the end of July 2021. Through the instrumentality of the Afreximbank, US$500M has been provided for Pan-african Payment and Settlement System (PAPSS) in the West African Zone (WAMZ) as a pilot. Subsequently, Us$3bn is expected to support the African-wide PAPSS.

Aviation and Tourism

"The year 2021 is almost ending, but the quarantine and the Delta variant crisis have complicated the tourism sector. But we still believe tourists will trickle in," Kenyan Minister of Tourism. Africa's tourism suffered a setback in 2020 due to a massive withdrawal in the wake of the pandemic. According to the World Travel and Tourism Council, Nigeria's tourism sector alone lost over 700,000 jobs due to the pandemic. The tourism sector, along with the export of primary commodities, accounts for the foreign earnings of many African countries restarted gradually, with countries like Rwanda, Kenya, Morocco, and Tunisia recording trickles of activities in their tourism industries. However, it would take a while for the tourism sectors in African countries to return to pre-pandemic levels because of health restrictions that still apply in many parts of the world. Analysts have also noted that the recovery of the tourism sector in Africa has been sluggish due to the equally slow pace of Vaccination. In Rwanda, for instance, 60% of its 13million population is targeted for Vaccination by 2022. Yet, as of April 2021, only 9% of the pro-rated target had been vaccinated. Given the cost and availability of the vaccines, African countries like Kenya have had to hinge their optimism on the relatively higher vaccination rates in the more advanced countries from which tourists are expected. The delta variant also has complicated matters as tourists have to present a negative PCR certificate even if they have received the two shots of the vaccine. Mauritius, a major tourist destination, presents a case in point (see chart 5 below).

Commodity Exports in Emerging Markets In the first half of 2021, nearly all commodity prices climbed, continuing the strong recovery that began in mid-2020. Most soft commodity prices surpassed their pre-pandemic levels, while some hard commodities, especially metals, settled well above their previous levels. By March 2021, copper prices were approximately 50 % higher than at the end of 2019. The rise has been supported by the improved global economic outlook (compared to last year); analysts also believe that the significant monetary and fiscal stimulus in advanced economies also contributed to the rebound. Another primary driver of the recovery in the commodities market has been steady, although uneven, vaccination rates. Driven largely by higher-than-expected production cuts among OPEC and its partners, crude oil prices have recorded the fastest recovery from a record price collapse to reach a high of nearly US$70/B in the middle of March before dropping back to US$63/B in early April. However, the recovery has not brought crude oil prices to pre-pandemic levels as oil demand remains 5% short of its 2019 level. Improved economic outlook, as well as the passing of the U.S. stimulus bill, have also contributed to the rise in commodity prices. Coal prices rose 30 % on the quarter and have almost doubled since August, mainly due to supply disruptions. Natural gas prices also rose by one-third in 2021Q1 (Q-O-Q), primarily in response (Proshare)

President Hage Geingob, in his New Year’s message, declared 2022 as Namibia’s ‘Year of Reimaging’, encouraging the nation to form “a new and different mental picture” by thinking differently and “moving forward with renewed enthusiasm and vision”.

The theme of “reimaging” had been widely misinterpreted and criticised on social media, mainly because the word “reimaging” is ambiguous, quite uncommon and easily confused with “reimagining,” which has a different meaning. Others have claimed that they had no reason for “reimaging” amidst socio-economic difficulties such as unemployment and income inequality. However, from a public relations perspective, “reimaging” has a very clear and significant meaning. By now, the meaning of this theme has been contextualised and clarified, through various engagements. From these clarifications, one can deduce that Merriam-webster’s definition of “reimaging” – forming “a new mental picture [or image] of (someone or something)” – is suitable in the context of this theme.

The theme of “reimaging” is, therefore, congruent with the main objective of public relations, which is to create and maintain a positive image, reputation and perception of an organisation to maintain trust and confidence in its strategies and programmes, in spite of denigration and other external factors.

On a national and broader scale, public relations, therefore, has an influence on the image of a country, both among its citizens and globally by developing strategies aimed at promoting national programmes and endeavours. Sure enough, Namibia has been experiencing its fair share of challenges over the years, exacerbated by the Covid-19 pandemic during the last two years. The Covid-19 pandemic has shown just how deficient our health systems and information technology infrastructure really were, not only in Namibia, but elsewhere too. The pandemic also had adverse effects on the global economy.

Though Covid-19 frontline workers have been diligent and dedicated in their response to the pandemic, patients have had to scrimmage for medical care as our health systems were not well-equipped to accommodate the increased number of patients. Education came to a standstill, particularly in rural areas, where learners are computer-illiterate and where there is limited access to support infrastructure such telecommunications and electricity. Travel restrictions between countries and the closure of points of entry in order to contain the virus had constrained regional and international trade, thereby disrupting our economy.

In spite of these and other persistent challenges, such as a high unemployment rate and income inequality, Namibia has remained resilient, as the President mentions, giving us reason for reimaging. Of note is the green hydrogen venture, which has attracted international recognition and is expected to transform our energy sector, promote a low-carbon future, stimulate investment and create employment opportunities.

Moreover, Namibia has been vigorously promoting the African Continental Free Trade Area (AFCFTA) and has drafted a national strategy to implement the AFCFTA agreement, which would allow us access to a single market of African countries, and grow small and medium enterprises on the continent.

In the midst of economic challenges, these endeavours and others, coupled with other factors such as our political stability, democratic governance, rule of law and abundant natural resources, do indeed give us reason for reimaging.

These endeavours and factors should, however, not make us complacent. Unlike traditional public relations, modern public relations are cognisant that organisational/ national strategies and endeavours should correlate with public opinion. Reimaging, therefore, requires us to, among others, enhance service delivery both in the public and private sectors, and favourably respond to the social needs of communities.

The theme of “reimaging” should thus resonate throughout the year as our motivation and driving force to overcome our collective national struggles.

“When we find researches/opinions from other publishers that might interest you, we pass them along. Below you'll find the latest opinions on “Year of Reimaging: A Public Relations Perspective”. Their opinions may differ from what you read in CFTA.NOW. This article first appeared in The New Era.