Roberto CoelhoBy Roberto Coelho|December 7, 2021|6 Minutes|In AfCFTA


"The power of the United States of Africa."

New Year’s Eve 1945, after six devastating years of World War II and two atomic bombs, follows an ever-threatening USSR and agrowing United States. Europe, however, is physically and mentally shattered, European leaders are fearful of a third world war.

With a desire to ensure this never happens again, Winston Churchill calls for a “United States of Europe” and the seeds for the European Union are planted.

As I write this, 2021 is ending, New Year’s Eve is coming up and Africa faces similar problems to those of post war Europe.

After a devastating pandemic, economies are crumbling with more than 100 million Africans forced below the poverty line. Local SMEs have not had the privilege of government bail outs, those businesses with insufficient liquidity were forced to close their doors.

Facing this environment, The African Union Chair and South African President Cyril Ramaphosa, echoes the sentiments of Churchill, to create a globally competitive and united Africa.

One of the key levers for ensuring future African success is the African Continental Free Trade Area (AfCFTA).

“The AfCFTAaspires to connect all the regions of Africa to deepen economic integration and to boost Intra-African trade and investment,” says Ramaphosa

AfCFTA holds unique business opportunities for local citizens and international investors as the continent rebounds from the worst recession in 25 years.

“While Africa, has been severely impacted by the Covid-19 pandemic, it is well placed now, then ever before, to rebound better and stronger and achieve the transformation desired for the Africa we want,” as said by the Secretary General of the African Continental Free Trade Area, Wamkele Mene.

The successful implementation of AfCFTA is a pre-requisite for continental success.

But before implementation, one must fully understand its importance on the continent.

To gain an understanding we must alternate between future predictions and past facts.

Firstly, the UN predicts by 2050, a quarter of the world population (2.5 billion people) will be based in Africa, making up the youngest global population. Thus, Africa will be the world’s fastest-urbanizing population.

With this, should come economic growth, a reduction in poverty and an overall better society.

However, if Africa is continuously dependent on international resources it will be impossible for these economies to utilize their youthful populations and reach their full potential.

Hence, under this light the positives of AfCFTA shine. To ensure the growing population is both economically satisfied and utilized, independence from global resources is required.

Independence begins by increasing the current African intercontinental trade from the low base of 3%. The AfCFTA goal,  based on trade within the European Union, is 70% between member states.

If African countries are able to work together, South Africa, for example, can reduce its reliance on the EU as its most important trading partner (24% of exports).

“Countries across the continent are taking policy actions to create adopting macroeconomic policies essential for a stable macroeconomic environment” says Mene.

If these macroeconomic policies are successfully implemented, the continent will become competitive on a global scale. Confidence within nations will grow, more entrepreneurs will take risks and success will follow. As is often said, Africa may be the future China.

“Today, the case for investing in Africa is stronger than ever” as preached by Mene.

If we can leverage this attractiveness successfully, Africa’s growth will be exponential.

“Africa will remain a competitive investment destination for decades to come because of its continental integration, improving relative risk profiles, and demography,” said Mene.

If continental integration is opening the door to international investors, the key is AfCFTA.

President Haikande Hichilema of Zambia links the success of the African Free Trade Area on two aspects. The trust among member states, and most importantly the benefits filtering down to grass roots level.

Trust will be earned if all countries benefit from AfCFTA and not only a select few.

African leaders must learn from the European Union, to not be guilty of making the same mistakes over again.

It is public knowledge that in the midst of the pandemic Germany, Austria, The Netherlands and Belgium were hesitant to provide extra funding to Italy and other western nations.

If South Africa, Nigeria, and Egypt were to do the same, an unequal Africa would result. The goal is to create an inclusive Africa not a divided one.

Furthermore, often internal politics dictate the timeline of AfCFTA developments. This must not be allowed to happen as corners will be cut to meet these arbitrary deadlines.

There must be a conservative effort by leaders of African nations to ensure AfCFTAis kept independent from internal politics, however unlikely this may seem.

President Ramaphosa has an important part to play as the leader of the AU to ensure trust between nations.