Africa Taking Concrete Steps to Write Its Own Economic Success Story
2021-11-25 18:20:38
The AfCFTA aspires to connect all the regions of Africa, to deepen economic integration and to boost intra-African trade and investment. It aspires to create a single market for goods and services across 55 countries and our continent, creating a market of as much as 1.3 billion people with a combined GDP of $3.4 trillion.
On the first of January 2021 the African Continental Free Trade Area commenced trading, making this Trade Fair the first to take place since we reached the most significant milestone in our quest for African economic integration.
In 2018 the first Intra-African Trade Fair opened in Egypt, in the ancient city of Cairo.
Today, it is opening in the southernmost tip of Africa. In due course, we hope the IATF will be held in all parts of the continent. This fair belongs to us all.
The goods, products and services exhibited at the fair represent all the countries of Africa, and its success rests on the participation of all of us.
The AfCFTA aspires to connect all the regions of Africa, to deepen economic integration and to boost intra-African trade and investment. It aspires to create a single market for goods and services across 55 countries and our continent, creating a market of as much as 1.3 billion people with a combined GDP of $3.4 trillion.
This year’s Intra-African Trade Fair is about building bridges.
It brings together governments, buyers, investors, entrepreneurs and manufacturers from more than 55 countries to give life to the African Continental Free Trade Area.
The countries of Africa are open for business. Since ancient times, trade has been the engine that connected communities both near and far. From the ancient centres of learning like Alexandria and Timbuktu, to the northern civilisations in Egypt and Carthage, the western Kingdoms of Ghana, Mali, and Songhai, the trans-Saharan trade routes, the eastern trading centres of Zanzibar, Mombasa and Mogadishu, to the ancient southern civilisations of Great Zimbabwe and Mapungubwe, for many centuries Africans traded the goods that they produced.
Throughout history, Africa has had a network of trade routes that facilitated the flow of goods such as beads, carvings, ivory, gold, gum, metal works, salt, textiles and metals. These trade routes enabled African traders to seek out markets beyond the continent.
Colonialism deeply damaged the indigenous development of African trade and caused great harm to our societies. At first, Europeans traded in African lives, carrying millions of slaves across the Atlantic to produce the wealth of their new-found colonies. Then, with the realisation of Africa’s vast raw materials, colonial powers turned to the extraction of Africa’s minerals and agricultural products.
Much of the economic storyline of colonialism persists to this day.
Now Africa is taking concrete steps to write its own economic success story. It is opening up new fields of opportunity. One such opportunity is in Africa's rapid adoption of locally developed fintech, of which M-PESA is the most well-known. It is an example of financial and technological innovation in which Africa leads the world.
A recent report from the Brookings Institution notes that Africa “is already the largest adopter of mobile money transfer systems, comprising nearly half of the globe’s registered mobile money customers, approximately 70 percent of global mobile money transactions, and two-thirds of the transaction volume by value".
It is by harnessing all our capabilities, both existing and emerging, that we will accelerate Africa’s economic growth and integrated development.
It is our expectation that this Intra-African Trade Fair will further cement its position as Africa’s premier trade platform, where African manufacturers can promote and sell more ‘Made in Africa’ goods to one another.
This is critical if we are to change the distorted trade relationship that exists between African countries and the rest of the world.
We can no longer have a situation where Africa exports raw materials and imports finished goods made with those materials.
We can longer have a situation where the resources of Africa provide employment and add value in other economies, while so many of our people live in poverty and conditions of under-development.
By promoting trade between African countries we are strengthening the continent’s industrial base and ensuring that we produce goods for ourselves and each other.
Two key developments of global significance can serve as a stimulus for Africa to act in unison.
Firstly, the outbreak of the COVID-19 pandemic in the first quarter of 2020 exposed the frailty of African economies. More importantly, it sent a powerful message to our continent about the dangers of over-reliance on external sources to meet its growing demand for food, medicines and other essential supplies. It clearly demonstrated that Africa needs to produce its own food and medicines, to strengthen continental supply chains, and to invest in infrastructure and capacitate African institutions. To illustrate the extent of the challenge, the United Nations Economic Commission for Africa estimates that Africa imports about 94 per cent of its pharmaceutical and medicinal needs from outside the continent at an annual cost of $16 billion.
Secondly, the African Continental Free Trade Area has the potential to accelerate economic growth across the continent and create opportunities for entrepreneurs, small and medium enterprises as well as large corporations to flourish. The AfCFTA will provide new export opportunities for ‘Made in Africa’ products and enable member countries to trade with each other without tariffs or other hindrances.
All of this will help the continent to absorb the 10 to 12 million African youth looking to enter the job market annually.
The AfCFTA should therefore be underpinned by strong and ambitious rules of origin, requiring a very high level of value-add here on our continent. We need, as Africans, to resist the temptation to simply become transhipment centres, adding only limited industrial value in Africa.
The AfCFTA will unlock more value and give effect to the dream of African development if it promotes complementary trade between countries.
It is about using the combination of the continent’s raw materials and industrial capacity, finance, services and infrastructure to produce quality finished goods to local and global markets. It is about creating a market large enough to attract investors from across the world to set up their production facilities on the continent.
We need to leverage platforms such as the Intra-African Trade Fair to mobilise all African governments, together with our social partners, to work tirelessly to address youth unemployment.
Half of Africa’s population are women, and they are the dominant actors in the informal sectors of Africa’s economic landscape. Despite this, women only generate around a third of the continent’s combined GDP. It is important that the Intra-African Trade Fair gives special attention to African women in business, recognising their great potential as drivers of economic change across the continent.
Trade is built on a bedrock of investment. We must therefore find ways of attracting more investment into our economies, and, crucially, we must encourage African businesses to invest in each other’s countries. This requires that we improve the ease of doing business in our countries and provide protection for investors through strong and independent legal systems that will ensure the sanctity of contract and fair and expeditious legal processes. It means also that investors must be sensitive to our continent’s development goals: jobs, industrialisation and development of local entrepreneurs.
The conditions of Africa’s workers must improve as part of our development goals and the decent work agenda that all of us have committed to must find expression in our trade, investment and industrial frameworks.
On the 24th of May 1963, independent Ghana’s first President Kwame Nkrumah delivered his famous ‘We must unite now or perish’ speech in Addis Ababa.
His words are as true today as they were when the Organisation of African Unity was formed.
President Nkrumah said: “With our united resources, energies and talents, we have the means, as soon as we have shown the will, to transform the economic structures of our individual states from poverty to that of wealth, from inequality to the satisfaction of popular needs. Only on a continental basis shall we be able to plan the proper utilisation of all our resources for the full development of our continent.”
Now is the hour of action.
As countries let us work with speed to resolve any outstanding issues around the AfCFTA; let those countries who have not already ratified it do so; and let us take the necessary steps towards domestication.
We are greatly encouraged by the sentiment expressed by the African Development Bank a few weeks ago that the implementation of the AfCFTA will be a key component of the bank’s lending programme and that working with the AfCFTA Secretariat the bank hopes to amass a number of AfCFTA aligned investments.
South Africa stands ready to work closely with all African countries to forge more balanced, equitable and fair trade relations among African nations.
In 2018 the first Intra-African Trade Fair opened in Egypt, in the ancient city of Cairo.
Today, it is opening in the southernmost tip of Africa. In due course, we hope the IATF will be held in all parts of the continent. This fair belongs to us all.
The goods, products and services exhibited at the fair represent all the countries of Africa, and its success rests on the participation of all of us.
The AfCFTA aspires to connect all the regions of Africa, to deepen economic integration and to boost intra-African trade and investment. It aspires to create a single market for goods and services across 55 countries and our continent, creating a market of as much as 1.3 billion people with a combined GDP of $3.4 trillion.
This year’s Intra-African Trade Fair is about building bridges.
It brings together governments, buyers, investors, entrepreneurs and manufacturers from more than 55 countries to give life to the African Continental Free Trade Area.
The countries of Africa are open for business. Since ancient times, trade has been the engine that connected communities both near and far. From the ancient centres of learning like Alexandria and Timbuktu, to the northern civilisations in Egypt and Carthage, the western Kingdoms of Ghana, Mali, and Songhai, the trans-Saharan trade routes, the eastern trading centres of Zanzibar, Mombasa and Mogadishu, to the ancient southern civilisations of Great Zimbabwe and Mapungubwe, for many centuries Africans traded the goods that they produced.
Throughout history, Africa has had a network of trade routes that facilitated the flow of goods such as beads, carvings, ivory, gold, gum, metal works, salt, textiles and metals. These trade routes enabled African traders to seek out markets beyond the continent.
Colonialism deeply damaged the indigenous development of African trade and caused great harm to our societies. At first, Europeans traded in African lives, carrying millions of slaves across the Atlantic to produce the wealth of their new-found colonies. Then, with the realisation of Africa’s vast raw materials, colonial powers turned to the extraction of Africa’s minerals and agricultural products.
Much of the economic storyline of colonialism persists to this day.
Now Africa is taking concrete steps to write its own economic success story. It is opening up new fields of opportunity. One such opportunity is in Africa's rapid adoption of locally developed fintech, of which M-PESA is the most well-known. It is an example of financial and technological innovation in which Africa leads the world.
A recent report from the Brookings Institution notes that Africa “is already the largest adopter of mobile money transfer systems, comprising nearly half of the globe’s registered mobile money customers, approximately 70 percent of global mobile money transactions, and two-thirds of the transaction volume by value".
It is by harnessing all our capabilities, both existing and emerging, that we will accelerate Africa’s economic growth and integrated development.
It is our expectation that this Intra-African Trade Fair will further cement its position as Africa’s premier trade platform, where African manufacturers can promote and sell more ‘Made in Africa’ goods to one another.
This is critical if we are to change the distorted trade relationship that exists between African countries and the rest of the world.
We can no longer have a situation where Africa exports raw materials and imports finished goods made with those materials.
We can longer have a situation where the resources of Africa provide employment and add value in other economies, while so many of our people live in poverty and conditions of under-development.
By promoting trade between African countries we are strengthening the continent’s industrial base and ensuring that we produce goods for ourselves and each other.
Two key developments of global significance can serve as a stimulus for Africa to act in unison.
Firstly, the outbreak of the COVID-19 pandemic in the first quarter of 2020 exposed the frailty of African economies. More importantly, it sent a powerful message to our continent about the dangers of over-reliance on external sources to meet its growing demand for food, medicines and other essential supplies. It clearly demonstrated that Africa needs to produce its own food and medicines, to strengthen continental supply chains, and to invest in infrastructure and capacitate African institutions. To illustrate the extent of the challenge, the United Nations Economic Commission for Africa estimates that Africa imports about 94 per cent of its pharmaceutical and medicinal needs from outside the continent at an annual cost of $16 billion.
Secondly, the African Continental Free Trade Area has the potential to accelerate economic growth across the continent and create opportunities for entrepreneurs, small and medium enterprises as well as large corporations to flourish. The AfCFTA will provide new export opportunities for ‘Made in Africa’ products and enable member countries to trade with each other without tariffs or other hindrances.
All of this will help the continent to absorb the 10 to 12 million African youth looking to enter the job market annually.
The AfCFTA should therefore be underpinned by strong and ambitious rules of origin, requiring a very high level of value-add here on our continent. We need, as Africans, to resist the temptation to simply become transhipment centres, adding only limited industrial value in Africa.
The AfCFTA will unlock more value and give effect to the dream of African development if it promotes complementary trade between countries.
It is about using the combination of the continent’s raw materials and industrial capacity, finance, services and infrastructure to produce quality finished goods to local and global markets. It is about creating a market large enough to attract investors from across the world to set up their production facilities on the continent.
We need to leverage platforms such as the Intra-African Trade Fair to mobilise all African governments, together with our social partners, to work tirelessly to address youth unemployment.
Half of Africa’s population are women, and they are the dominant actors in the informal sectors of Africa’s economic landscape. Despite this, women only generate around a third of the continent’s combined GDP. It is important that the Intra-African Trade Fair gives special attention to African women in business, recognising their great potential as drivers of economic change across the continent.
Trade is built on a bedrock of investment. We must therefore find ways of attracting more investment into our economies, and, crucially, we must encourage African businesses to invest in each other’s countries. This requires that we improve the ease of doing business in our countries and provide protection for investors through strong and independent legal systems that will ensure the sanctity of contract and fair and expeditious legal processes. It means also that investors must be sensitive to our continent’s development goals: jobs, industrialisation and development of local entrepreneurs.
The conditions of Africa’s workers must improve as part of our development goals and the decent work agenda that all of us have committed to must find expression in our trade, investment and industrial frameworks.
On the 24th of May 1963, independent Ghana’s first President Kwame Nkrumah delivered his famous ‘We must unite now or perish’ speech in Addis Ababa.
His words are as true today as they were when the Organisation of African Unity was formed.
President Nkrumah said: “With our united resources, energies and talents, we have the means, as soon as we have shown the will, to transform the economic structures of our individual states from poverty to that of wealth, from inequality to the satisfaction of popular needs. Only on a continental basis shall we be able to plan the proper utilisation of all our resources for the full development of our continent.”
Now is the hour of action.
As countries let us work with speed to resolve any outstanding issues around the AfCFTA; let those countries who have not already ratified it do so; and let us take the necessary steps towards domestication.
We are greatly encouraged by the sentiment expressed by the African Development Bank a few weeks ago that the implementation of the AfCFTA will be a key component of the bank’s lending programme and that working with the AfCFTA Secretariat the bank hopes to amass a number of AfCFTA aligned investments.
South Africa stands ready to work closely with all African countries to forge more balanced, equitable and fair trade relations among African nations.
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