JOHANNESBURG - African governments are putting regulations and mechanisms in place to ensure the success of a recently signed continental free trade area, including easing customs controls, developing regulations on the cross border movement of people, reforming taxation and intellectual property regimes and improving anti-corruption legislation, South African President Cyril Ramaphosa said on Monday.
The free trade agreement signed in July will help consolidate the union among African states and reduce the potential for conflict because "there is no benefit in waging wars with countries that you trade with", Ramaphosa told the Financial Times Africa summit in London.
"The free flow of goods and services will enable African businesses and entrepreneurs to expand their horizons. It will lead to the creation of a huge number of both big and small businesses," he said.
"This treaty will unleash the manufacturing and industrial capability of the continent as companies will seek to make products for the burgeoning African market."
Across Africa, countries were enacting reforms to improve business confidence, while public institutions were being reformed and laws around corruption and bribery strengthened.
Because of these cumulative reforms, Ramaphosa said, five of the ten most improved countries in this year’s World Bank Ease of Doing Business Index were from Africa.
But while data from the International Monetary Fund showed that six of the world’s 10 fastest growing economies were in Africa and were becoming increasingly sophisticated as investors sought returns in industries such as renewable energy, ICT and agribusiness, many challenges remained for the continent, the South African president said.
"Unemployment, especially among young people, is still high. Poverty is widespread and inequality is growing. Millions do not have access to proper health care or decent education," he told the Financial Times summit.
"Policy and regulatory uncertainty, weak implementation and corruption is deterring investors. These are challenges we recognise and are working to overcome."
He said South Africa, like other countries on the continent, was positioning itself as an investment destination of choice, and at the core of these efforts were good governance, growth enhancing reforms and macro-economic stability.
"South Africa recognises that to grow our economy, create jobs and support investment we have to pursue prudent fiscal policies coupled with sound macroeconomic management," said Ramaphosa.
"At a time when our fiscus is under great pressure, we are committed to ensuring debt sustainability, improving the composition of spending and reducing risks arising from contingent liabilities, especially of our state-owned enterprises," he added, citing debt-ridden state power utility Eskom as one of the greatest challenges to his nation's s economy.