- April 24, 2023
- Posted by: AITRC 2
- Categories: News, Blog
I had the honour of representing Africa International Trade and Commerce Research as one of the delegates at the African Continental Free Trade Area (AfCFTA) Business Forum 2023, (#AfCFTABF2023) held in Cape Town, South Africa, from 16th to 19th April, 2023. The forum was a platform for insightful discussions that took place at the plenary and breakout panel sessions, for the Africa and global business community, government, development partners and friends of Africa focusing on the economic potential of the “One African Market,” challenges, and opportunities for trade and investments within the AfCFTA Agreement.
The forum commenced with a High-level panel consisting of pan-African and global business leaders, who engaged in discussions about how to increase intra-Africa trade to accelerate economic growth through industrialization and job creation. There were also discussions on the policy tools required to establish or enhance Africa’s manufacturing and industrial capacity, and to promote value-addition in priority value chains such as agriculture, pharmaceuticals, textile and clothing, and mining, among others.
One key area of focus was the demand for finished products (excluding vaccines), which amounts to approximately $18 billion annually in Africa. Majority of this demand is currently met through imports totaling around $11 billion, accounting for about 61% of the demand. Demand met by trade from Africa is less than 3%, and even less for vaccines at less than 0.1%. This presents a significant opportunity to meet the demand through local production, thereby increasing the security of medicines supply on the continent, particularly for diseases that are more prevalent in Africa compared to the rest of the world, such as HIV/AIDS, tuberculosis, malaria, diarrhoea, and respiratory diseases.
While vaccine manufacturing in Africa is currently in its early stages, demand is projected to more than double in volume over the next decade, from approximately 1 billion doses today to over 2.7 billion doses in 2040. By value, excluding future demand for COVID-19 vaccines and other new vaccines yet to be developed, the public market for vaccines in Africa is expected to reach an estimated $3 billion to $6 billion by 2040.
Several barriers to increasing production and intra-African trade were identified, including lack of markets at scale, lack of competitiveness compared to other regions, lack of harmonization of standards and regulations across the continent, and insufficient transport and logistics. The forum aimed to address these barriers and advance possible solutions to scale production locally and reduce imports.
Agriculture is a crucial sector for economic development in most African countries, as it contributes more than 60% of employment for the population and more than a third of total GDP. However, Africa mainly exports traditional agricultural products such as cocoa, coffee, cotton, tea, and spices outside the continent, while importing food products like cereals, vegetable oils, dairy, fish, and meat products to meet its food security requirements. The forum aimed to bring together key stakeholders to discuss opportunities for agricultural trade in the context of AfCFTA, provide solutions to barriers in agricultural value chain development for trade and market access, and create a platform for learning, information sharing, and building networks and partnerships to jointly address agro-processing solutions for AfCFTA implementation.
The AfCFTA Hub, a unified electronic gateway connecting e-government portals, business and consumer apps, and supranational platforms into one continental digital ecosystem, was also a topic of discussion. The aim of the AfCFTA Hub is to simplify AfCFTA compliance and benefits for SMEs and startups, level the playing field in e-commerce and e-logistics, lower the costs of cross-sector and cross-border transactions, and increase trust across public and private channels and networks. The ultimate goal is to deliver prosperity to every corner of the continent.
The forum also highlighted the unique challenges faced by women in intra-African trade and explored ways to empower and include them in the AfCFTA. Under the HER African Continent Free Trade Area (HERAfCFTA), which represents a forward-thinking approach to trade capacity-building, specifically aimed at empowering women within the framework of the AfCFTA. This innovative platform seeks to foster partnerships to drive tangible initiatives to ensure women derive maximum benefits from the AfCFTA. UNDP, the AfCFTA Secretariat, and other key partners will collaborate to advance efforts that promote the success of women in the AfCFTA.
Summary and action points:
The African Continental Free Trade Area (AfCFTA) Business Forum 2023 was held in Cape Town, South Africa, from 16th to 19th April. Discussions at the forum focused on the economic potential of the AfCFTA, challenges, and opportunities for trade and investments. Key topics included increasing intra-Africa trade for economic growth, establishing and growing Africa’s manufacturing and industrial capacity, addressing barriers to agricultural trade, and leveraging the AfCFTA Hub for digital connectivity and economic prosperity. The forum also highlighted the unique challenges and opportunities for women in trade and the HER African Continental Free Trade Area (HERAfCFTA) Agreement as a platform for mobilizing partnerships to empower women under the AfCFTA.
My Recommendations/ Action Points
Increase local production to meet demand: Africa has a significant opportunity to meet its demand for finished products, including vaccines, through local production rather than relying heavily on imports. Governments, businesses, and stakeholders should collaborate to promote and support local manufacturing and value-addition in priority value chains such as agriculture, pharmaceuticals, textile and clothing, and mining.
Address barriers to trade and market access: Discussions should focus on identifying and addressing barriers to trade and market access, such as lack of competitiveness, harmonization of standards and regulations, and transport and logistics challenges. Governments and private sector players should work together to develop policy tools, infrastructure, and mechanisms to facilitate intra-African trade and enable businesses to compete effectively in regional and global markets.
Leverage digital connectivity for economic prosperity: The AfCFTA Hub, as a unified electronic gateway, presents an opportunity to simplify AfCFTA compliance, lower transaction costs, and promote e-commerce and e-logistics. Governments, businesses, and stakeholders should explore collaboration opportunities to leverage the benefits of the AfCFTA Hub Network and enhance digital connectivity to drive economic prosperity, particularly for SMEs and startups.
Empower women in trade: Women play a crucial role in trade in Africa, but often face unique challenges. Efforts should be made to empower women by addressing gender-specific barriers, promoting gender-inclusive policies and initiatives, and providing capacity-building opportunities. The HERAfCFTA Agreement and partnerships among UNDP, AfCFTA Secretariat, and other key stakeholders can be leveraged to advance concrete initiatives that secure women’s benefits in the AfCFTA and move them from the margins to center stage.
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Sand Mba Kalu
Executive Director
Africa International Trade & Commerce Research
T: +2349058603907 E: mail@africainternationaltrade.com
