It’s been a long time in the making but what an incredibly positive way to usher in 2021, with Africa officially trading under the African Continental Free Trade Area (AfCFTA).
Originally published in the ESI Africa weekly newsletter on 13/01/2021
The news filled me with a sense of finally making progress. The euphoric hopefulness prompted me to respond to a question posed by Adedoyin Adele-Fadipe, CEO of Central Electric & Utilities Ltd in Nigeria on LinkedIn. She asked: “What does being African mean to you? What do you see?”
My response spoke of a feeling of belonging and witnessing young entrepreneurs’ determination who will be behind the rise of African prosperity in this century. I hope that the AfCFTA will support the brave Africans taking significant risks in their endeavours to prosper.
According to Jean-Guy Afrika, the Chief Regional Funds Coordinator at the African Development Bank Group, the pace of ratification by the African Union (AU) has been unprecedented in its history, marking it an outstanding achievement. Out of the 55 AU member states, 54 signed and 34 have ratified the agreement.
Before we can report, “all systems go” for AfCFTA, there is much work ahead.
As examples, Afrika draws attention to the outstanding negotiations on trade in goods and services that need to be finalised and converted into national customs measures and procedures. Trade documents such as Certificate of Origin need to be distributed to hundreds of AfCFTA border points.
Countries will need to develop and implement clear national AfCFTA trade strategies. Monitoring mechanisms will need to be enhanced to quickly address issues affecting implementation, especially Non-Tariff Barriers (NTBs) to trade.
“The start of trade under AfCFTA sends an important signal. Africa’s trading landscape will never be the same. Full operationalisation and reaping the benefits of the AfCFTA will, however, require much patience, determination and sustained political commitment. Much will also depend on how fast we move on parallel but equally important development agendas such as state building, peace and security, regional infrastructure and industrialisation,” he said in a post on LinkedIn.
Adele-Fadipe shares my sentiment that this decade belongs to the African Entrepreneur. “From all corners, across all sectors, with different sizes of enterprises, all manners of collaboration and forms of innovation and a closer march towards ‘free’ enterprise in a market of billions – [the] majority [of whom are] youth and fired up and ‘desperate’.”
However, the utility CEO does question the impact of AfCFTA on the quality of goods and service performance, standardisation, corporate governance, and accountability as tools for competition and access to funds.
“Most exciting is the opportunity to edge further away from Government spending as a means of economic mobility. Hopefully, shifting the focus of Governments to the seriousness of competitive regulatory and market stabilising frameworks as a means of entrepreneur attraction. The old will definitely have to give way…what a decade!” she concluded.
There is so much possibility but risk too. As such, I will address this topic further in the coming months and during a webinar.
In parting, allow me to quote Nelson Mandela who 21 years ago during a ceremony at his former prison cell on Robben Island, said: “We close the century with most people still languishing in poverty, subjected to hunger, preventable disease, illiteracy and insufficient shelter.”
Sadly, this continues to be a reality for too many people across Africa, but I believe the AfCFTA is a step in the right direction to making the impact Mandela had in mind.