The Africa Continental Free Trade Agreement (AfCFTA) can help to break an historical pattern that Africa does not produce what it consumes; and does not consume what it produces, said Trade, Industry and Competition Minister Ebrahim Patel.
Speaking at the opening of the first live the AfCFTA Business Forum in Cape Town on Sunday, Patel said AfCTFA could address the legacy of colonialism that left Africa with small, divided nation-states and with fragmented markets that had contributed to weak economic performance.
The AfCFTA is aimed at increasing trade between African countries, with goods genuinely made on the African continent, and avoiding the neo-colonial history of Africans selling goods largely made elsewhere in the world, he said.
The agreement, launched in July, 2019 would progressively eliminate tariffs and liberalise intra-Africa trade, among other stimulus measures, making it easier for African businesses to benefit from the growing African market which stands at some 1.3 billion consumers. The conference is being attended by more than 1 200 private and public sector delegates to create awareness of the opportunities presented by the agreement.
African Union Commission deputy chairperson Dr Monique Nsanzabaganwa said it was now up to the private sector.
She said, “A number of instruments have been put before you to start trading under the AfCFTA. These include the AfCFTA e-Tariff Book; Rules of Origin Manual; African Trade Observatory; the Intra-African Trade Fair; the AfCFTA Adjustment Fund; the AfCFTA Automotive Fund; the Pan-African Payments and Settlement System (PAPSS); the AfCFTA Guided Trade Initiative, MANSA; the African Business Council; and the AfCFTA Dispute Settlement Mechanism, among others.
“All these instruments and tools are designed to ensure legitimate transactions thrive,” Nsanzabaganwa said.
She said the AU Commission was working with member states to ensure there was sufficient evidence-based information on regional value chains, market intelligence, resilient health infrastructure, food security,and peace.
“More importantly, we need strong collaboration on green industrialisation. While the continent contributes less than 2% to carbon emissions, it is equally important that it should not regress from this best practice as we industrialise,” she said.
Patel said Africa had 17% of the world’s population, yet captured only 3% of world trade and generates less than 3|% of the world’s gross domestic product.
It produces less than 2% of the world’s manufacturing output and less than 1% of the world’s steel and car production.
“And trade can play a role, for throughout history, trade has been the engine that connected humanity and linked communities. Trade exposed our ancestors to new ideas, new ways of doing things, and to new products,” he said.
“We can change that. It requires action by all of us. On Thursday, SA hosted its 5th annual Investment Conference at which Cyril President Ramaphosa announced that R1.5 trillion in new investment has been mobilised into the South African economy over the past five years,” said Patel.
This included investment in building Africa’s first anaesthetic plant and that firm’s facility that produced Covid-19 vaccines, investment to build new solar-powered energy units and new mines in the Northern Cape.
It included investment in food production and new call centres; expansion of steel manufacturing and tourism facilities; investment in new vehicles, like the Toyota hybrid vehicle, the Corolla Cross or the Isuzu D-Max and Ford Ranger vehicles.
There was also investment in digital infrastructure, from fibre-optic cables to cellphone mast-towers to the Equinao undersea cable that, among others, connects West Africa and South Africa.
“This then is both our challenge and also our opportunity summed up: namely, to industrialise our continent to manufacture more; to grow more and trade more with each other,” he said.
Nsanzabaganwa said In recent months, there had been “incessant requests” for business partnerships from the US, EU, India, China, and South America and the opportunities for business alliances “need to be grabbed”.
“We continue to value our relationship with the US and with China, Europe, Asia, the Middle East and Latin America. Our focus now, however, is on building African capacities, African industries, African economies,” Patel said.
BUSINESS REPORT