8 News of the Month
Africans gear up for game-changer
… but as the AFCFTA drama unfolds in June 2020, trade analysts question the
future of infant domestic industry
By William Nguluwe
W alter Rodney, an African
historian,
documented how
rightly
Europe
underdeveloped Africa through
the obnoxious systems of slavery
and colonialism, among others,
between 15th and 18th Century.
Indeed, the struggle for political
independence by great nationalists
like Kwame Nkruma (Ghana),
Julius Nyerere (Tanzania)
Kenneth Kaunda (Zambia)
Nnandi Azikiwe (Nigeria) at
the turn of 20th Century was to
arguably arrest dependency on the
imperial countries of Europe.
What is of incontestable fact is that
these Africa’s founding fathers did walk
their electoral goals they had passionately
fought for and in a record time, they
reversed the colonial legacy of Africa as an
exporter of raw materials and importer of
finished goods.
At that time, the manufacturing sector
contribution to the continent’s Gross
Domestic Product (GDP) averaged 35
percent in the 1960s and 1970s with near
full employment and turned around the
continent into a huge industrial estate, with
textile sector, up to mid-1980s, employing
millions and millions of workers.
Sadly, the remarkable gains of
post-colonial Africa in terms of import
substitution, manufacturing value added
(MVA), massive infrastructural and
massive labour absorptions in labour
intensive sectors have Gone with the Wind!
This time, I bet that Walter Rodney
would have had another reflection on how
Africans underdeveloped Africa, through
power/electricity non supply, massive job
losses, massive smuggling, non-patronage
of locally produced goods, unemployment
and collapse of railways systems.
it is against this background that
we must appreciate the singular re-
investment drive of the monumental
African Continental Free Trade Agreement
(AfCFTA) in recent times. I believe that the
African Continental Free Trade Agreement
(AfCFTA), which starts in June next year
will set the continent firmly on the path to
increased intra-Africa trade and economic
diversification.
The AfCFTA is the historic agreement
that will create the world’s largest free trade
area since the World Trade Organization
(WTO) premised on the assumption that it
will bring Africa to the world stage as one
block, one continent and speaking with one
voice toward achieving the agenda 2063
goals which is the continent’s blueprint and
masterplan for transforming Africa into a
global powerhouse of the future.
South African President Cyril
Ramaphosa told a second Africa Investment
Forum in Sandton, the agreement which
has been signed by 44 countries will in the
next 15 years increase intra-Africa trade by
more than 20 percent.
He called on investors to invest on the
African continent, adding that the African
Continental Free TradeArea Agreement
AfCFTA would be a game-changer for
investment and business opportunities in
the next 10 years for Africa, according to
South African Broadcasting Corporation
(SABC) report made available on
November11, 2019.
President Ramaphosa said when fully
running, the AFCFTA will create a tariff
free continent and will help in job creation.
consumers will benefit from the removal
of tradebarriers; business costs will be
removed but by far the most significant
potential of the AFCFTA will be to increase
the value of intra-Africa trade which by
some estimates will be between 15 to 20
percent by the year 2040.
Meanwhile, the Africa Union for Trade
has said free trade across Africa’s borders
will begin in June next year. The union has
also said following the ratification of the
instrument by member States, the Africa
Union was targeting June 2020 to begin the
free trade.
However, many Africa trade and
investment analysts are warning that
African countries would have to put in
place measures to guarantee that the small
to medium enterprises SMEs and infant
domestic industries are protected when the
agreement is implemented.
They explained that the agreement
would expose the local entrepreneur to
stiffer competition therefore there would
be need to concentrate on developing
capacity for private motor to improve on
quality and supply chain management as
well as systems.
But what is of significance and
revolutionary is that millions of poor
people in Africa stand to benefit from a
continental trade initiative that has been
hailed by many African leaders as a
triumph in the battle to ease crippling mass
poverty on the continent, among others,
as it will culminate into a huge market for
African Countries while consumers would
be exposed to a variety of products thereby
enhancing their welfare.
African Union Ambassador to the
United States, His Excellency Dr Arikana
Chihombori-Quao, His Excellency Albert
Muchanga, the African Union Industry and
Trade Commissioner and other dignitaries
CrossBorder DECEMBR 2019
attended the launch of investment and
development initiatives including the
monumental African Continental Free
Trade Agreement (AfCFTA) in Dallas,
Texas in United States of America on
November 8-9, 2019.
Some high-profile female personalities
had earlier mainstreamed that they would
present demands at the Texas meeting
to tackle gender challenges in the cross
border trade in Africa. Names including
non-Governmental organisations (NGOs)
Trade for Africa chairperson, Gwen
Adeboyar, are among more than 40 women
to have signed a frank open letter to the
Texas meeting urging participants to pay
much attention to the gender challenges
facing women in the cross border trade in
Africa which they say have been known for
many years within the Regional Economic
Communities (RECs) on the continent.
For once, women’s rights groups and
other supporters have said the AfCFTA
would be a powerful tool in cutting trade
challenges that have contributed to the
continent’s brutal poverty.
Speaking ahead of the launch of
investment and development initiatives
including the monumental African
Continental Free Trade Agreement
(AfCFTA) in Dallas, Texas in United States
of America on November 8th, the women
also spoke of huge expectations for trade
institutions in Africa to create even more
jobs by 2030.
“It is important for these trade
institutions and regional communities
to analyse, understand and eliminate the
challenges that women cross border traders
encounter,” Ms Adeboyar explained.
Another sticking point observed is that
the transformative potential of the AfCFTA
will depend on the free flow of goods across
borders — which only the logistics sector
can help unlock. Local entrepreneurs and
multinationals alike have long lamented
the broken nature of logistics and supply
chains across the continent.
Although AfCFTA will bring some
relief to companies doing business across
the continent by slashing border tariffs, the
continent’s $130-170 billion infrastructure
gap remains a stubborn impediment
to reducing logistics costs. Yet, thorny
challenges reveal immense opportunities;
hundreds of African companies are tackling
the region’s logistics problems.
According to a recent Briter Bridges
survey of logistics tech companies across
the continent, three trends will shape the
future of logistics in African markets:
closing the urban-rural divide, the
digitization of logistics, and the continued
rise of B2B logistics companies.