In May, the Africa Continental Free Trade Area (AfCFTA) officially entered into force. Fifty four countries signed on, and the process was notable for the speed and cooperative manner in which the African countries worked together to make this happen. If things go as planned, then the big idea to come out of this will be the creation of one of the world’s largest single markets. That’s currently around $4 trillion in spending and investment across the associated countries and a potential consumer base of around 1.2 billion people, projected to reach 1.7 billion people with an annual spend of around $6 trillion by 2030. In an optimised AfCFTA environment, a best case scenario, we could see an acceleration of industrialization, with large scale increases in production to meet local demand, but also to grow manufacturing exports. Add tourism, agriculture, perhaps some techno and info based services, and we there could be some serious opportunities for investors, big business, and entrepreneurs.
The general objectives of AfCFTA are to:
- Create a single market for goods, services.
- Deepen the economic integration of the African continent
- Create a liberalized market for goods and services through successive rounds of negotiations;
- Contribute to the movement of capital and natural persons
- Facilitate investments
- Lay the foundation for the establishment of a Continental Customs Union
- Promote and attain sustainable and inclusive socioeconomic development, gender equality and structural transformation
- Resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes.
It is clear though, that the way in which these objectives will be fulfilled is still in development, and subject to discussion, negotiation and phased implementation over time. While this has it’s uncertainties, it also offers an important opportunity for stakeholders to engage. Some of these engagements could include
- Utilise in-house expertise to review texts and offer additions and amendments to encourage best practices
- Use organizational structures to facilitate engagement
- Collaborate with other stakeholders to identify issues and lobby governments and negotiators to take cognizance.
- Share information on challenges and successes
- Look into possible Public Private partnerships
- Set up think tanks to facilitate ideas and strategies to develop capability.
In other words, an opportunity has come for businesses that have an interest in Africa: We can and should input into the process of delivering an optimal implementation of AfCFTA. We ignore the opportunity at our peril.
By Kevin Abraham
[Nod: AfCFTA Business guide, Brookings, and various]