Freight trains are seen at Nairobi station of Mombasa-Nairobi Standard Gauge Railway (SGR) in Nairobi, capital of Kenya, Nov 17, 2021. [Photo/Xinhua]
Despite teething problems that have troubled the African Continental Free Trade Area, or AfCFTA, since its official launch in Jan 2021, the business community and experts have expressed confidence that momentum for the initiative is building.
Speaking at the BRICS Business Forum in Johannesburg, South Africa on Tuesday, leaders called for accelerated implementation and advancement of the AfCFTA to boost economic growth across the continent and enhance trade relations with the BRICS countries.
Patrice Motsepe, the founder and chair of JSE-listed Rainbow Minerals, said the commitment was already in place, and that what is needed now is a sense of urgency to ensure that both tariff and non-tariff trade barriers are significantly reduced and eliminated.
“We do business in about 35 countries in Africa, on the financial services side. We have huge investments in India and other parts of the world, but Africa, for us, is the most exciting area to do business. There might be challenges, but it’s still the most exciting and the most attractive,” he said.
Despite the challenges affecting the continent, such as political instability in some African countries, Motsepe said the business community has more confidence than ever.
He said this confidence is based on fact, as seven of the world’s fastest-growing economies are in Africa, the amount of intra-African trade is increasing significantly and the partnership between Africa and the BRICS countries continues to grow.
Motsepe suggested there was a need for enhanced partnership and discussions between African governments and the private sector.
“Part of the purpose for the discussion is for the private sector to indicate to the government what sort of impediments and barriers there are to the free trade of goods and services in Africa,” he said.
Wamkele Mene, the secretary-general of the AfCFTA Secretariat, said the African market, which consists of 1.3 billion people and a combined GDP of $3.4 trillion, has the potential to make the continent competitive globally.
He said 47 countries have ratified their instruments of the AfCFTA agreement and have agreed to significantly reduce barriers to intra-Africa trade.
Mene said all the protocols have been concluded apart from two that are expected to be concluded by the end of the year.
He said that trade ministers are currently introducing tools designed to turn the agreement into a commercially meaningful arrangement.
“One of the biggest constraints to trade in Africa and one of the barriers to SMEs and young entrepreneurs is the cost of trade, so we want to move beyond trade agreements and introduce tools that will enable the trade to happen,” he said.
“One of the tools is the AfCFTA Adjustment Fund. We have mobilized over a billion dollars through Afreximbank to enable SMEs and young entrepreneurs to trade.”
Mene assured the business community that opportunities arising from the BRICS summit will not be exclusively for South Africa, but will extend to the entire continent.
Stavros Nicolaou, senior executive director of Aspen Pharmacare, said Africa presents a vast market of $3.4 trillion, which is expected to grow to $16-17 trillion by 2050.
He added that the African population is expected to grow from1.3 billion to 2.5 billion by 2050, and will primarily consist of young, tech-savvy consumers.
Onkar Kanwar, the chairman and managing director of Apollo Tyres Ltd, noted Africa’s large youth population, and emphasized the importance of improving their skills.
He expressed need for Africa to invest in its people, leverage opportunities for them to be economically active and entrepreneurial, noting that such a move would have a direct impact on the vibrancy and buoyancy of its economies.
Kanwar added that Africa, with its considerable expanses of arable land, has the potential to increase its agricultural productivity and achieve food security.