Chris BishopBy Chris Bishop|January 5, 2021|6 Minutes|In AfCFTA

AfCFTA

Now Is The Time For Africa To Unite And Prosper!

The establishment of the African Continental Free Trade Area was signed in Kigali, Rwanda, by 44 heads of state on March 21, 2018. The broad objective of the AfCFTA is to create a single continental market for goods and services, with free movement of business persons and investments, paving the way for accelerating the establishment of the Continental Customs Union. The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.

The African continent must create long term goals of “Made in Africa 2063”, increasing continental production of core materials to 50 percent by 2050 and 75 percent by 2063.

To help achieve independence from foreign suppliers, the initiative can encourage increased production in high-tech products, automotive, agriculture, electronics and services, leading to breakthroughs in other areas of manufacturing technologies.

Prioritising Implementation of the African Continental Free Trade Area Agreement must be done while assessing country readiness and the implications for capacity building is extremely timely and appropriate, as that will demonstrate the implementation capabilities for the African continent.

Africa is excited because AfCFTA will increase the economic growth of most economies. Choosing to challenge the status quo is an uphill battle, and there are bound to be failures, barriers, and setbacks along the way, we must remain Strategic Optimists as the future is bright for Africa. Trade is the lifeblood of economies everywhere and the exchange in goods and services are the basis of every economy. African entrepreneurs must assist the continent in creating large corporates to compete globally, that will improve the GDP per person in most economies.

Africa hosts 30% of the world’s mineral reserves and accounts for more than 20 percent of global annual production of five key minerals namely; 80% of the world’s platinum, 77% of cobalt, 51 % of manganese, 46 percent of diamonds, 39 percent chromium and 22 percent of gold. Africa also possesses 60 percent of world’s arable land, 13 percent of the global population and is the most youthful continent with about 60 percent of its population under the age of 25 as well as abundant energy potentials.

Africa’s imports are worth approximately $549 billion, which is three percent of the world’s total imports in 2018. The top 5 leading importers were South Africa (17%), Egypt (14.8%), Morocco (9.3%), Algeria (8.6%), and Nigeria (6.6%). While the five leading exporters to Africa were China (17%), France (5.4%), USA (5.1%), Germany (4.7%) and India (4.6%).

Finding sustainable solutions to the complex problems and opportunities facing us today will require the collective creativity, talents, knowledge, and hard work of many people across the continent and including African talents at European and American markets. Innovation is for every nation and/or continent. Africa must unite and formalise central institutions in different spheres.

We must focus on economic recovery Post COVID-19 and leaders and entrepreneurs must unveil novel strategies to turnaround our economies.

Antswisa Transaction Advisory estimates that Africa could suffer GDP losses in 2020 of about $200 billion from the COVID–19 economic complexities. While we remain optimistic about the future, 2021 will see losses similar to 2020, as the projected recovery would take longer and sometimes an L-shaped economic recovery, depending on the institutional viability and health systems strengths.

The most affected economies are those with poor healthcare systems, those that rely heavily on tourism, international trade, and commodity exports, and those with high debt burdens and high dependence on volatile international financial flows.

Rebuilding human capital for Implementing the AfCFTA agreement is the most common priority for Africa. The AfCFTA can require an additional staff component of about 270 human capital, actuarial allocation from all 54 States.

Africa has capacity to nourish 40% of the 9.8 billion people by 2050 through sustainable practices on agricultural production. The world’s consumption of raw materials is set to nearly double by 2060 as the global economy expands and living standards rise, placing twice the pressure on the environment than we are seeing today.

African billionaires will come from agri-processing and material processing.  African economies need foresight to negotiate and better manage the Transfer Pricing Guidelines for Multinational Enterprises to our benefits.

As the African economy matures, the AfCFTA must be implemented as a platform to transition the continent from efficiency driven economies to sophistication driven, that will require a unique approach on accountability and governance principles; political stability and peace and unity. The long-term view point, made in Africa 2063, must create African Industrialists for production and distribution.

Miyelani Mkhabela is a Founding Director and Chief Executive of Antswisa Transaction Advisory.