AfCFTA will accelerate the continent’s economic growth and integrated development, says Ramaphosa
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SOUTH Africa is open for business and hosted the Intra-African Trade Fair (IATF2021) in Durban this week where it positioned itself to take a leading position in the implementation of the Africa Continental Free Trade Area (AfCFTA).
The IATF2021, which ends today, is poised to boost commerce across Africa, with $40 billion of trade and investment deals set to be concluded at the event.
Kicking off the event, President Cyril Ramaphosa said the implementation of the AfCFTA will accelerate Africa’s economic growth and integrated development.
The AfCFTA agreement has created the largest free trade area in the world, measured by the number of countries participating, and established a market of 1.3 billion people with a combined gross domestic product (GDP) of about $3.4 trillion.
According to the UN Economic Commission for Africa (Uneca), the AfCFTA agreement has the potential to boost intra-African trade by more than 50 percent from the low level of 13 percent.
It was this massive economic potential which saw Ramaphosa urging African manufacturers to promote and sell more ‘Made in Africa’ goods to one another. To illustrate his point, Ramaphosa said Uneca estimated that Africa imported 94 percent of its pharmaceutical and medicinal needs from outside the continent at an annual cost of $16bn.
“This is critical if we are to change the distorted trade relationship that exists between African countries and the rest of the world,” Ramaphosa said.
“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.”
Trade among African countries is currently at a low of 18 percent of total goods that cross national borders.
On the third day of the event, former Nigerian President Olusegun Obasanjo supported Ramaphosa’s message, calling for the creation of an emblematic Made-in-Africa brand that will promote intra-African trade and boost the international export of African products.
Obasanjo said that having a Made-in-Africa brand would instill a sense of pride in each African country.
He said that the AfCFTA was working to remove the divisions that were brought about by colonialism, where Africa had been divided into regions based on the languages of the colonisers.
“I have been impressed by the interaction of people at the IATF. People are working together, and this creates the environment in which miracles can happen,” he said.
Gwen Mwaba, Afreximbank’s director and global head of trade finance, said Africa had an abundance of ideas but often did not have the knowhow to convert them into viable and profitable businesses, resulting in lost intellectual property.
Mwaba suggested the use of education to address the intellectual property challenge in Africa, saying that the resulting business ideas could be harnessed and given a chance at success with the support available from Afreximbank.
“Africans have a plethora of good ideas that are not followed up,” she said.
“For those that are followed up, the good ideas are not sustained; and the few good ideas that are followed up and sustained are often not rigorously maintained.”
Mwaba added that Africa needed more industrial development zones.
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