Unlocking economic potential: The Africa Free Trade Continental Area agreement and the future of tourism in SA

Dancers perform at the launch of South Africa's first shipment and preferential trading under the African Continental Free Trade Area agreement at the port in Durban, South Africa, January 31, 2024. File image.

Dancers perform at the launch of South Africa's first shipment and preferential trading under the African Continental Free Trade Area agreement at the port in Durban, South Africa, January 31, 2024. File image.

Published Mar 2, 2024


By Lee-Anne Bac

The Africa Free Trade Continental Area (AfCFTA) agreement unlocks tremendous opportunities for local and global businesses to enter into and expand throughout new markets across the continent.

Envisioned as a catalyst for growth, the AFCFTA holds tremendous promise for the South African tourism sector. However, the complexities surrounding its implementation have posed challenges, delaying the potential benefits, says Lee-Anne Bac, Director at BDO South Africa.

It has been estimated that by 2050, Africa will be home to 2.5 billion people, with its combined business and consumer spending reaching $16.12 trillion. With these numbers in mind, the AfCFTA agreement symbolises a new dawn for the continent and represents immense growth opportunities for African markets. As the nation with the most developed economy on the continent, South Africa stands at a pivotal juncture where this agreement has the potential to unlock new opportunities for its tourism industry. Yet, although many African countries have already implemented the agreement, South Africa is lagging.

One of the most promising aspects of the agreement for the tourism sector in South Africa lies in the facilitation of the free movement of people that will substantially increase the number of business and leisure travellers within the continent.

This free movement could translate into an increased demand for hotels and accommodation, air and land transportation and much more, thereby driving growth, generating additional income and creating much need employment opportunities.

A catalyst for Intra-Africa work travel

As the gateway to southern Africa, South Africa is emerging as a hub for professionals seeking regional work experiences.

The free movement of people facilitated by the AfCFTA would encourage Africans to explore South Africa as a destination for both leisure and work. Business travellers and professionals, drawn by the prospect of seamless travel, would contribute to a surge in tourism-related activities.

Conferences, conventions, and collaborative projects could become commonplace, further solidifying South Africa's status as a preferred destination for both business and leisure.

South Africa's diverse tourism offerings could benefit from increased intra-Africa travel. As professionals explore work opportunities within the continent, they are likely to extend their stays to experience the unique cultural, natural, and historical attractions that South Africa boasts. This not only diversifies our tourist markets but will also contributes to longer stays and increased spending by visitors.

Collaboration becomes increasingly attractive once free movement is allowed.

By tapping into the strengths of neighbouring nations and fostering cross-border partnerships, South Africa can create unique travel packages that showcase the diversity of experiences available across the continent. From cultural festivals to wildlife safaris, a collaborative approach would enrich the tourism landscape and attract a broader spectrum of visitors, from across the African continent.

The agreement could also ensure that skilled workers from across the continent can move freely between franchised brands to ensure quality control and standards are met across the board – a move that has massive benefits not only for the businesses themselves in terms of extending quality, enhancing skills development and fostering the careers of valuable employees, but also for travellers who will return over and over again to places that have met or even exceeded their travel needs.

Complexities and delays in implementation

Despite the immense potential, the AfCFTA's implementation is facing hurdles in South Africa. The complexities come from a myriad of factors, including regulatory frameworks, logistical challenges, and the need for harmonisation of policies across diverse nations.

These complexities have led to delays, preventing South Africa from fully capitalising on the benefits the agreement promises.

One of the primary complexities the country faces is aligning its national regulations with the overarching framework of the agreement.

This process requires extensive negotiation and compromise to ensure that the nation's interests are represented while contributing to the greater good of African economic integration.

Logistical challenges are also causing a bottleneck.

The need to upgrade transportation infrastructure and streamline customs procedures presents additional roadblocks. The successful implementation of the agreement demands a commitment to addressing these challenges head-on, requiring significant investments and a coordinated effort among member states.

Concerns have also been raised about potential economic imbalances and the need for safeguards to protect vulnerable industries which have slowed down the negotiation process. South Africa, being a major player in the African economy, must navigate these intricacies with diplomacy and foresight to ensure that the benefits of implementation are shared equitably among member states.

The vision is clear: a united Africa, seamlessly connected through the AfCFTA. This will not only elevate our position as a tourism hub but also contribute to the broader economic development of the continent. However, if South Africa doesn’t seize the opportunity to shape a future where all who seek to explore the continent can do so freely, there are many other countries ready and waiting to snap up the spoils of the African Renaissance. We must step up and champion this journey or risk being taken off the map completely.

Lee-Anne Bac, an advisory director at BDO South Africa.

Lee-Anne Bac. Image: Supplied.