We’re glad to say Brandhill Africa™ – publishers of this news portal – had the honour to attend the AfCFTA Business Forum which was held in Cape Town from 16 to 18 April 2023, capably represented by our Associate Editor (Business), Makatisha Motsepe-Mphulwane – see her interview with the leadership of the SA BRICS Business Council on the sidelines of the forum in this edition.
Indeed Africa is a continent rich in resources, diverse cultures, and dynamic people. However, despite its potential, it has long struggled to achieve economic growth and development. One of the key factors hindering Africa’s economic progress has been the fragmentation of its markets. With 54 independent countries and Western Sahara still illegally occupied by Morocco, each with its own regulatory frameworks and trade barriers, doing business across borders in Africa has been a challenge. However, with the creation of the African Continental Free Trade Area (AfCFTA), a single market for goods and services in Africa, there is renewed hope for the continent’s economic future.
The AfCFTA was launched on January 1, 2021, after years of negotiations between African countries. The agreement aims to create a single market for goods and services, with free movement of people and capital, across 55 countries with a combined population of 1.3 billion and a combined GDP of $3.4 trillion. The AfCFTA represents a historic opportunity for African countries to boost intra-African trade, attract foreign investment, and create jobs.
The AfCFTA Business Forum, was a significant event that brought together key stakeholders from the private sector, government, and civil society to discuss the potential benefits of the AfCFTA and the role of business in driving its implementation. The forum provided a platform for stakeholders to exchange ideas, share best practices, and identify opportunities for collaboration.
One of the key outcomes of the forum was the establishment of the AfCFTA Business Forum, a private sector-led body that aims to support the implementation of the AfCFTA and promote private sector engagement in the process. The Business Council is composed of representatives from various sectors, including manufacturing, agriculture, finance, and services, and it is expected to play a key role in driving the implementation of the AfCFTA.
The forum also resulted in the development of a set of recommendations for businesses and governments to support the implementation of the AfCFTA. These recommendations included the need to invest in infrastructure, promote SME development, and increase digitalization, among others.
While the AfCFTA Business Forum was a significant event, it is important to assess its success in terms of its impact on the implementation of the AfCFTA. One way to measure the success of the forum is to look at the progress that has been made since its conclusion.
Since the forum, there have been a number of positive developments in the implementation of the AfCFTA. In January 2021, the AfCFTA officially entered into force, signalling a major milestone in the process. As of September 2021, 54 out of the 55 African Union member states have signed the agreement, with 47 ratifications.
In addition, several countries have already begun implementing the AfCFTA, including the establishment of the African Continental Free Trade Area Secretariat, which is responsible for overseeing the implementation of the agreement.
The AfCFTA Business Council has also been actively engaged in supporting the implementation of the AfCFTA. The Council has held several meetings and workshops, and it has launched a number of initiatives to support private sector engagement in the process. For example, the Council has launched an online platform to connect businesses across Africa and provide them with access to information and resources.
However, despite these positive developments, there are still challenges that need to be addressed in the implementation of the AfCFTA. For example, there is a need to address the issue of non-tariff barriers, which can hinder trade across borders. There is also a need to address infrastructure deficits, particularly in terms of transportation and energy.
While the AfCFTA Business Forum was a significant event that provided a platform for stakeholders to exchange ideas and identify opportunities for collaboration, its success should be assessed in terms of its impact on the implementation of the AfCFTA. While there have been positive developments since the conclusion of the forum, there are still challenges that need to be addressed in order to fully unlock the potential of the AfCFTA.
Indeed the success of the AfCFTA depends on the active participation of businesses, both large and small, in advancing the agreement. In this narrative, I will explore the role of business in advancing the AfCFTA and the key steps that businesses can take to support its implementation.
Invest in Infrastructure
Infrastructure is a critical enabler of economic growth, and businesses can play a significant role in investing in infrastructure to improve connectivity and facilitate trade between countries. According to the African Development Bank, Africa’s infrastructure deficit is estimated to be around $130-170 billion per year, and this is a significant barrier to economic growth.
Businesses can invest in infrastructure such as roads, ports, and telecommunications to reduce the costs of doing business and increase efficiency. For example, a business operating in West Africa could invest in the construction of a new road that connects a manufacturing plant to a port, reducing transportation costs and improving access to export markets. Similarly, a business operating in East Africa could invest in the construction of a new telecommunications network, improving connectivity and access to digital markets.
In addition to direct investment, businesses can also play a role in advocating for public-private partnerships (PPPs) that can help to finance infrastructure projects. PPPs involve collaboration between government and private sector partners to deliver infrastructure projects, and they can be a powerful tool for mobilising resources and sharing risks.
Support SMEs
Small and medium-sized enterprises (SMEs) are the backbone of many African economies, and they will play a critical role in the success of the AfCFTA. SMEs account for the majority of businesses in Africa and are a significant source of employment and income. However, many SMEs face significant barriers to growth, including limited access to finance, skills shortages, and a lack of market access.
Larger businesses can support SMEs by providing mentorship, training, and access to finance and markets. For example, a large multinational corporation could provide technical support to an SME in the form of business advice, skills training, or access to new markets. Similarly, a large bank could provide financing to SMEs to help them to grow and expand.
In addition to direct support, larger businesses can also play a role in advocating for policy changes that will support the growth of SMEs. For example, they can advocate for the creation of SME-friendly regulatory frameworks and the development of financial products that are tailored to the needs of SMEs.
Embrace Digitalisation
The AfCFTA will require businesses to adapt to new ways of doing business, including digitalisation. Digitalisation refers to the use of technology to transform business processes and operations. Digitalisation can help to increase efficiency, reduce costs, and improve access to markets.
Businesses can invest in technology and innovation to improve their operations and take advantage of new opportunities. For example, a business operating in the retail sector could invest in e-commerce platforms, allowing it to sell its products online and reach new customers across borders. Similarly, a business operating in the financial sector could invest in digital payment systems, reducing the costs and risks associated with cross-border transactions.
In addition to investing in technology, businesses can also play a role in promoting digital literacy and skills development. Digital literacy refers to the ability to use digital technology effectively, and it is essential for businesses to take full advantage of the opportunities presented by the AfCFTA. Businesses can provide training and education programs to their employees, helping them to develop the skills and knowledge needed to thrive in a digital economy.
Advocate for Policy Changes
Businesses can play a critical role in advocating for policy changes that will support the implementation of the AfCFTA. Policy changes could include the reduction of trade barriers, harmonisation of regulations, and the implementation of trade facilitation measures.
For example, businesses could advocate for the removal of non-tariff barriers such as cumbersome customs procedures or regulatory requirements that hinder trade. They could also advocate for the harmonisation of regulations across different countries, making it easier for businesses to operate across borders. Trade facilitation measures, such as the implementation of electronic customs systems, can also help to reduce the costs and time associated with cross-border trade.
Businesses can engage with governments and other stakeholders to promote policy changes that will support the implementation of the AfCFTA. This could involve participating in policy dialogues, providing evidence-based research, or sharing best practices.
Engage in Cross-Border Trade
Finally, businesses can actively engage in cross-border trade by exploring new markets, building relationships with other businesses, and identifying opportunities for collaboration. The AfCFTA creates new opportunities for businesses to expand their operations across borders and tap into new markets.
Businesses can participate in trade missions and business delegations to explore new opportunities and build relationships with potential partners. They can also leverage digital platforms to connect with other businesses across borders and identify new markets for their products and services.
In addition to traditional trade, businesses can also explore new models of collaboration, such as value chain integration. Value chain integration involves businesses working together to create a seamless flow of goods and services across borders. This can help to reduce costs and increase efficiency, benefiting all partners in the value chain.
In assessing the success of a forum, several factors can be considered. One of the key factors is the level of participation and engagement of stakeholders. A successful forum should attract a diverse range of participants, including representatives from the private sector, government, civil society, academia, and international organisations. The level of engagement of these stakeholders, including their willingness to share ideas and best practices and to collaborate on initiatives, can also be a key indicator of success.
Another factor to consider is the outcomes of the forum. Successful forums should result in concrete outcomes, such as the establishment of partnerships, initiatives, or working groups that can support the implementation of the forum’s objectives. The outcomes should also be measurable, with clear indicators and timelines for implementation.
The impact of the forum is another important factor to consider. Successful forums should have a positive impact on the implementation of the objectives that were discussed. This impact could be measured through indicators such as increased investment, job creation, or trade volumes. Additionally, successful forums should lead to sustained engagement and follow-up activities to ensure that the momentum generated during the event is maintained.
Overall, the success of a forum depends on several factors, including the level of participation and engagement of stakeholders, the outcomes of the event, and the impact it has on achieving the objectives discussed. While there are no guarantees of success, careful planning, effective communication, and strong follow-up activities can increase the likelihood of a successful outcome.
In conclusion, businesses have a critical role to play in advancing the AfCFTA. By investing in infrastructure, supporting SMEs, embracing digitalisation, advocating for policy changes, and engaging in cross-border trade, businesses can help to unlock the full potential of this historic agreement and drive economic growth and development in Africa.
The AfCFTA represents a unique opportunity for businesses to access new markets, reduce costs, and increase efficiency. However, success will depend on the active participation of businesses across the continent. By working together, businesses can help to create a more prosperous and inclusive future for Africa.
We wish all our Muslim readers a blessed Eid Mubarak and a happy weekend to all.
Saul Molobi (FCIM)
Publisher, Group Chairman & CEO
Brandhill Africa™
Tel: +27 11 759 4297
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