Opening up Africa’s borders will make business soar
The first shipment traded under the Africa Continental Free Trade Area (AfCFTA) act departed from Ghana in January 2021. The ship bound for Guinea and South Africa symbolized a new era: the rapid implementation of a free trade agreement to create a more inclusive and prosperous future for Africa. So said Jean-Guy Afrika, the acting director of the African Development Bank, who was a guest speaker at the US Business in Africa Awards launch.
This sentiment was echoed by Todd Haskell, the Charge d’ Affaires at the US Mission to South Africa, who was also a speaker at the Awards launch. Haskell explained that when he first arrived in Africa, based in the DRC, he noticed how small the markets on the continent were, and yet there are 55 African Union member states, comprising 1,3-billion people, and trade worth USD 4,3 trillion. AfCFTA now opens the market up, significantly cuts trade costs, and truly makes Africa the next global trade and investment frontier.
Dr Hippolyte Fofack, Chief Economist/Director, Research and International Cooperation, Afeximbank and a member of the organizing committee posited that removing tariff barriers on 90 percent of goods and services is a starting point not a destination. A significant amount of work needs to be done to allow the seamless flow of goods and trading among Africans. The EU for example, boasts 61% of its trade among member nations. Currently, only 16 percent of trade flows emanate from deals between African businesses.
Michael Sudarkasa, co-chair of the organizing committee, added that this is a challenge for overall growth on the continent with significant wealth flowing out of the continent and African businesses paying more for finished materials and imported products. Indeed, Africans should ensure that goods are beneficiated at the same quality.