New prospects for intra-Africa trade
WHEN the founders of the Organisation of African Union (OAU) got together more than 60 years ago to craft the idea of a continental organisation, they envisaged an integrated and united Africa, one that will deliver peace and prosperity for its people.
For many decades that followed the formation of the OAU and subsequently the AU, there were relentless calls to realise the dream of cross-border economic integration in Africa as envisaged by the founders of the OAU.
There can be no other indication that Africa has finally achieved its integration than the implementation of the continent’s most ambitious integration initiative, the African Continental Free Trade Area (AfCFTA), which officially begins in January 2021.
With the continent’s population reaching 1.3 billion this year, the agreement could not have come at a better time.
Over this past weekend, South Africa hosted the Extraordinary Summit on the AfCFTA and on silencing the Guns in Africa. The summit was crucial as it laid down the foundation for the start of trade under the AfCFTA on January 1.
This is an exciting time for the continent. The AfCFTA agreement will create opportunities and benefits for all the nations of the continent. It will enable companies to expand their markets by exporting goods and services across the continent.
By facilitating the movement of goods and services among African countries, AfCFTA will create opportunities to accelerate intra-Africa trade, grow local businesses, create jobs and increase infrastructure development on the continent.
The recent UN Conference on Trade and Developments report shows that intra-African exports were 16.6% of total exports in 2017, and this can drastically increase with the signing of the AfCFTA agreement when tariffs are removed on certain goods.
Furthermore, the Department of Trade, Industry and Competition, using a Trade Law Centre report, points to evidence that there has been a steady increase in Africa between 2017 and 2018.
During this period South Africa’s intra-Africa exports increased by 7%, while exports by Nigeria, Egypt and Ghana increased by 41%, 30% and 26% respectively. South Africa’s intra-Africa imports increased by 35%, while imports by Zimbabwe, Ivory Coast, Egypt and Morocco show a similar increase.
This comes at the back of a World Bank report which estimates that implementing AfCFTA would contribute to lifting an additional 30 million people from extreme poverty by 2035.
Furthermore, as African economies struggle to manage the consequences of Covid-19, AfCFTA would prove to be critical for the long-term reform and economic recovery of the continent post Covid-9.
To this end, it is encouraging that the AfCFTA agreement has been signed by 54 countries on the continent and 33 countries that had deposited their instruments of ratification.
AfCFTA is one of the flagship projects of the AU’s Agenda 2063, it is therefore important that all member states are part of this land mark agreement. The agreement presents the greatest opportunity for Africa to fulfil its aspiration of a united, integrated and prosperous continent.
Despite the remarkable progress made towards the final roll out of the AfCFTA agreement, it’s bound to be hindered if we don’t address conflict situations and some of the peace and security concerns that still prevail in several African countries.
Many countries continue to struggle with peace and governance issues. It is for these reasons that all Africans must support the quest by the AU to “Silence the Guns” in Africa by 2020, which has been the theme for the year. Silencing the Guns aims to achieve a conflict-free Africa, prevent genocide and make peace a reality for all.
To achieve this, all African state must create conditions that make it possible for peace to exist. These include respect for human rights, law and democratic systems.
It is something we have to do if the continent’s youthful population is to inherit a prosperous and peaceful Africa.