The African Continental Free Trade Agreement (AfCFTA) recognizes the private sector as a crucial partner, particularly given its capacity to spur long-term economic growth and job creation.
According to Stephen Karingi, director of regional integration and trade at the Economic Commission for Africa, “Africa’s private sector accounts for 80 percent of total production, two-thirds of investment, and three-quarters of credit, and employs 90 percent of the working-age population” (ECA).
Mr. Karingi urged captains of trade and industry to “own and drive the implementation of the AfCFTA by supporting their governments but also by calling them to account” during the beginning of a three-day conference on Africa’s prosperity on January 26 in Ghana.
According to ECA, intra-African trade in the agri-food, industrial, and service sectors will rise by around 35% by 2045 compared to a pre-AfCFTA scenario. But for such optimistic predictions to come true, governments must execute the Agreement “completely and effectively,” and the business sector must take advantage of the chances presented by the AfCFTA’s creation of a sizable single market.
The chairperson of the African Prosperity Network, Gabby Otchere-Darko, highlighted the importance of the private sector when she said that “we (the private sector) should make the fulfillment of the AfCTA’s pledges “our agenda.”
The event was formally launched by Ghana’s Vice President, Mahamudu Bawumia, who noted that “the AfCFTA has laid the foundation for Africa’s industrialization” and that “we have all we need to develop Africa into a worldwide powerhouse of the future.”
Ahunna Eziakonwa, UN Assistant Secretary-General and Director of UNDP’s Regional Bureau for Africa, declared: “It is via the AfCTA that we will industrialize” and “create jobs for Africans rather than export them.”
An Africa that produces its people’s needs is not just the Africa we want, it is the Africa we need,” Ms Eziakonwa said.
Mr Karingin noted, however, that the African private sector of which 90 percent are small and medium enterprises face challenges in conducting cross-border trade due to non-tariff barriers such as complex customs procedures, lack of access to finance, high costs of transportation and logistics, and lack of access to information, among others.
He cited inadequate infrastructure connectivity, rudimentary productive capacity, and risky or expensive payment systems as some of the barriers to trade, adding “the cost of doing business across African borders remains high, leading to the regrettable situation where African products are uncompetitive in African markets. “
Africa’s weak productive capacity and consequent excessive reliance on imports for essential products expose the continent to external shocks such as the COVID-19 pandemic and the Russia-Ukraine war.
“When Covid struck, African countries were confronted with a lack of access to basic medical supplies because Africa imports over 90 percent of its supplies. When the Russia-Ukraine crisis dawned, several African countries faced a crisis of food security because wheat and corn exports from Russia and Ukraine were suspended,” Mr. Karingi said.
The AfCFTA is expected to integrate and consolidate Africa into a single USD 2.7 trillion market by eliminating many of the barriers to trade present across the Continent. It provides the platform for Africa to diversify its economy and achieve resilience to natural and manmade shocks, including climate change.
Wamkele Mene, Secretary General of the AfCFTA Secretariat, posited that the ambition to integrate Africa dates back to the founding of the Organisation for African Unity (now the African Union). But the challenge now, he noted, is to “transform such ambition into action,” citing vaccine manufacturing in some African countries as one of the ways in which the continent is moving from ambition to action under the AfCFTA.
The maiden Africa Prosperity Dialogues is organized by the Africa Prosperity Network in collaboration with the ECA, the AfCFTA Secretariat, and the Government of Ghana
Mr Karingi reassured participants that “ECA has been there from the beginning; ECA will be there to the end. Africa is ready to turn the promises of the AfCFTA to reality, and ECA will be there all the way.”
