WEF report offers ways to boost intra-African trade
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JOHANNESBURG: The World Economic Forum’s (WEF) Connecting Countries and Cities for Regional Value Chain Integration – Operationalising the African Continental Free Trade Area (AfCFTA) report has analysed the impact that Covid-19 has had on Africa’s supply chains.
The report, which was developed by the WEF’s Regional Action Group for Africa in partnership with Deloitte, provides policy advice for accelerating the expansion of regional value chains in emerging manufacturing economies such as the automotive industry.
The paper is part of a series investigating five ways to drive economic recovery and build resilience in the context of the AfCFTA Agreement, namely:
- New financing models for rapid recovery
- Unlocking manufacturing to mitigate global supply chain risks
- Leveraging integration and regional value chains
- Revitalising infrastructure and connectivity
- Scaling up digital transformation and inclusive innovation
“The African Continental Free Trade Area holds immense potential for the social and economic development of Africa. Renewing the rules of trading will facilitate better co-operation to boost growth, reduce poverty and broaden economic inclusion,” said Børge Brende, President of the World Economic Forum.
The report from Regional Action Group for Africa offers detailed insights and recommendations on how to advance public-private collaboration on regional integration, with a view of deepening and strengthening regional value chains.
“It is perhaps the most ambitious free trade project since the creation of the World Trade Organisation itself. Actively promoting trade liberalisation to encourage new areas of growth is a pragmatic response to the reduction in global trade due to the Covid-19 pandemic, and will position Africa as an enhanced destination for investment from multinationals,” said Martyn Davies, Managing Director of Emerging Markets at Deloitte Africa.
“Although the continent can do little to counter the global forces inclining towards deglobalisation, it can embrace a self-supportive regionalism through enhanced intra-African trade.”
Insufficient and inert inter-linkages between African economies have exacerbated the impact of the Covid-19 pandemic on the continent’s supply chains.
However, from local production of essential products to improving port and customs efficiencies, the response to the pandemic shows how meaningful impact is created through collaborative efforts.
Successfully implemented, current efforts by the AU will stimulate trade as well as deepen and create new regional value chains in Africa.
The report places emphasis on the automotive sector as a case study as advances in the industry have the potential to set the tone and pace for other sectors to mobilise and create stronger integrated regional value chains.
As Africa builds its automotive industry, it should focus on development that promotes innovation and drives adoptions that will be sustainable for the growth and development of the sector.
BUSINESS REPORT ONLINE