Eight African Countries to Start Trading Under the African Continental Free Trade Area

by: Horn Observer Contributor | 23 August 2022 20:59

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Eight African Countries to Start Trading Under the African Continental Free Trade Area

By Kestér Kenn Klomegâh In pursuit of accelerating large-scale trade and business development, a number of African countries have been chosen to begin exchanging goods and services under the the the new African Continental Free Trad

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By Kestér Kenn Klomegâh In pursuit of accelerating large-scale trade and business development, a number of African countries have been chosen to begin exchanging goods and services under the the the new African Continental Free Trade Area (AfCFTA). The continental free trade is planned to operate within the framework of the African Union Agenda 2063.

The AfCFTA makes trade between African countries easier by providing new export opportunities for African countries' products and services to trade with each other without tariffs or other hindrances, and thus driving an improved access to the biggest market space and ultimately lead to sustainable economic growth.

Now the continental trading is about to operate as a platform for creating and strengthening ties between business communities, it highlights the readiness of the business environment and its priority potential development for the Africa.

Under the agreement with partners and shareholders, the African Continental Free Trade Area (AfCFTA) has chosen about eight African countries including Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia that will soon start trading. The move is part of efforts to diversify and increase export among African countries through Export Trading Companies (ETCs) while achieving the continent's industrialization drive and make it economically self-reliant.

Herbert Krapa, Deputy Minister of Trade and Industry (MoTI), said at a seminar to sensitize African countries on the role of ETCs in easing intra-African trade under the AfCFTA in Accra, Ghana, that the Secretariat had launched the AfCFTA Initiative on Guided Trade to translate all the progress on paper into action to make the continent's industrial revolution and its ability for self-reliance attainable.

"In the coming weeks, the dream of our forebears will be off the ground. Trading goods and services from Harare in Bamako or Kigali, or exporting processed cocoa from Accra to the entire northern African region should no longer be a nightmare if we make the appropriate investments into ETCs," Krapa said.

The Deputy Minister explained that ETCs would make Africa leave no one behind in the regional value chain particularly small and medium-sized enterprises (SMEs), young entrepreneurs, startups, light manufacturers as well as big industries. These value-chain players will be providing export and import services, warehousing, transportation, finance, insurance, risk management and market intelligence, around which the free trade area will thrive.

He, therefore, encouraged governments and private sector players to have the right policy, finance, institutional framework, productive capacity and infrastructure to enjoy the benefits that AfCFTA provided. With the current developments in the global economy, African countries - government institutions, exporters, financing firms, manufacturers, SMEs, and everyone else in the export ecosystem - have to pursue industrialization and be self-reliant. The planned industrial revolution must be realized at all costs across Africa.

Dr Gainmore Zanamwe, Senior Manager of Trade Facilitation, Afreximbank, said the lack of access to market intelligence was impeding growth of ETCs in Africa, and contributing to inability of member states to know what other countries were producing and needed. That though ETCs were ineffective in many African countries, they were critical in helping the growth of smallholder farmers and traders through the aggregation and bulk purchase of goods produced.

Dr Zanamwe highlighted the benefits of industrialization, noting that it helped in adding value to raw materials produced to increase revenue and job creation and called for the enabling environment to make ETCs thrive in Africa.

"By promoting trade in Africa, we strengthen our own industrial base and produce goods for ourselves and for each other," South African President Cyril Ramaphosa said in a speeche when South Africa last hosted a weeklong Intra-African Trade Fair (IATF), which provides a unique and valuable platform for businesses to access an integrated African market of over 1.2 billion people with a GDP of over $2.5 trillion.

He pointed at the need of using the combination of the continent's raw materials and industrial capacity, finance, services and infrastructure to produce quality finished goods to local and global markets, and about creating a market large enough to attract investors from across the world to set up their production facilities on the continent.

Taking his turn at the Intra-African Trade Fair, Nigerian President Muhammadu Buhari pointed out: "Today, Africa starts a collaborative journey towards collective economic prosperity. We cannot achieve this goal by talking alone. The implementation, the difficult journey and the challenges are surmountable if both public and private sectors collaborate. On the public sector side, governments must support local entrepreneurs to build scale, and therefore improve productivity."

He added that "the African Continental Free Trade Area must make the effort to ensure that Africa becomes a marketplace where no country is left behind, create jobs and enhance revenues for all parties."

Those African countries begin trading will therefore showcase the strengths and advantages of the AfCFTA. It is an ideal investment destination for foreign investors in Africa. In practical reality, it aims at creating a continental market for goods and services, with free movement of businesspeople and investments in Africa. The new African Continental Free Trade Area (AfCFTA) provides a unique and valuable access to an integrated African market of over 1.3 billion people.