AfCFTA to break legacy of raw exports from Africa
AFRICAN countries must use the African Continental Free Trade Area (AfCFTA) to break the colonial legacy of exporting raw materials and importing finished goods, a senior official with the Intra-African Trade Fair (IATF2023) Advisory Council has said.
The AfCFTA is the world's largest free trade area bringing together the 55 members of the African Union (AU) and eight (8) Regional Economic Communities (RECs) to create a single market for the continent.
It gives access to a market with 1, 3 billion people with a combined GDP of US$3,5 trillion, which is largely untapped.
The AfCFTA objective is thus to boost intra-Africa trade, particularly trade in value-added production and trade across all sectors of Africa's economy.
Speaking at the ongoing Intra-Africa Trade fair underway in Egypt Jean-Louis Ekra, deputy chairperson of the IATF2023 Advisory Council and former president of the African Export-Import Bank (Afreximbank), pointed out the unsustainability of African economies relying on natural resources and commodities, saying that this dependence made them vulnerable to adverse trade shocks, liquidity constraints and macroeconomic management challenges. Zimbabwe, for example, is paying the price for its over-reliance on the export of raw materials such as gold and platinum group of minerals which have been hit by low commodity prices.
At a recent pre-budget seminar, Reserve Bank of Zimbabwe governor Dr John Mangudya said export receipts were down by 9 percent due to low global commodity prices.
Exporting raw commodities is a situation that needs to be addressed urgently.
“AfCFTA cannot fail, especially given that intra-African trade is estimated at 16 percent”, which was a level of trade that compared unfavourably with other regions," said Mr. Ekra.
He said that the low level of intra-Africa trade was explained by constraints such as limited trade and infrastructure including payments and settlement systems, lack of access to relevant market information, limited knowledge about business, sustained investment opportunities and limited platforms to connect buyers and sellers.
Mr Ekra urged African countries to recognise that the AfCFTA was the missing link the continent needed and that it presented many trade and investment opportunities in manufacturing, export development, SME promotion and trade in services.
Also speaking, Ali Basha, Minister Plenipotentiary from Egypt, welcomed guests to the conference and said that the panels hosted as part of the conference should not be missed. He urged all African nations to “work hand-in-hand to address the challenges of trade integration.”
ZIMBABWE Stock Exchange (ZSE) listed beverages maker Delta will commission a new Chibuku Super plant for its South African subsidiary, United National Breweries, during the fourth quarter of this year.
The beverages giant indicated optimism on the strong demand for the sorghum beer segment South of Limpopo River with the product now available in formal retail chains, albeit the challenging environment characterised by power outages, weakening Rand, and low disposable incomes.
However, there were delays in the delivery of machinery for the plant, which the group now anticipates receiving soon and commencing production in the fourth quarter.
“There was a delay in the shipment of the equipment for the local production of Chibuku Super, which is now rescheduled to the fourth quarter,” said the group in a performance update for the half year to September 30, 2023.
Figures from Delta show that United National Breweries South Africa recorded a volume growth of 2 percent in the second quarter and is flat on prior year for the six months.
“The uptake of Chibuku Super is promising, which is supported by the entry into a number of formal retail chains,” said Delta.
According to the group, South Africans consumed 779 000 hectolitres of the opaque beer during the period compared to 780 000 in the prior year. In Zimbabwe,