The AfCFTA will not change existing commercial and economic realities on a large scale, but its implementation could lead to the recovery efforts of the COVID-19 crisis – Solomon Quaynor, VP African Development Bank
Industry experts meeting this week for a virtual discussion focused on restoring, reloading and restarting local integration in Africa in the wake of the COVID-19 pandemic stressed the importance of retailers being at the heart of any initiative.
The joint webinar, hosted by the African Development Bank and Korea Customs Service (KCS) on Tuesday, looked at service sectors, e-commerce, digital platforms and value chain development as critical factors in accelerating trade and investment in Africa against the backdrop of the global pandemic. The webinar was presented in three sessions, led by Stephen Karangizi, Director of African Legal Support Facility; Dr Stephen Karingi, Director at UNECA Regional Integration and Trade Division and Acha Leke, Senior Partner at McKinsey
History has shown the success of countries and businesses seizing new opportunities during times of crisis, said Sukhwan Roh, commissioner of the Korean Customs Service. “The COVID-19 pandemic has completely changed the health and livelihoods of individuals around the world in less than a year,” he said. “Korea wants to share all the achievements in improving the system using new technologies with African countries.”
The workshop audience heard how regional integration is increasingly central to the continent’s future economic prospects and to attract foreign direct investment. The African Continental Free Trade Agreement (AfCFTA), already ratified by thirty countries, is expected to enter into force on 1 January 2021. The treaty will unite all 55 members of the African Union and a market of more than 1.2 billion create. people, including a growing middle class, and a combined gross domestic product (GDP) of more than $ 3.4 billion
COVID-19 has deepened existing trade trends on the continent and yet offers important growth opportunities and amazing stories of innovation, emphasizing the importance of protecting Africa’s place in local value chains, said Anabel Gonzalez, Senior Fellow, Peterson Institute for International Economics, with the need to ‘put small-scale traders at the heart of the effort’. She called on governments to strengthen national agencies to provide support to retailers.
“AfCFTA is creating a new trade and integration reality … integrating unequal partners across the continent,” said Trudi Hartzenberg, executive director of the Trade Law Center (TRALAC). Trade facilitation enjoys specific focus within the AfCFTA, with digital, e-payments and e-commerce in particular, she added, referring to a 2020 WTO report highlighting education and health care as fundamental to industrialization.
The African Development Bank has provided strong support to the AfCFTA from the outset and financed the establishment of its secretariat, as well as supporting member states with technical assistance to comply with a range of AfCFTA regulations, the Bank’s Vice President, Infrastructure, privately said. Sector & Industrialization, Solomon Quaynor in his introductory remarks read by Abdu Mukhtar, Banking Director, Industrial and Commercial Development Division.
Nevertheless, Quaynor warned, recovery efforts after the crisis are likely to be slow. “The AfCFTA will not change existing commercial and economic realities on a large scale. Through strategic measures and the right investments, policy frameworks and political support, trade within Africa will be improved.”
African countries innovate to improve local value chains
Presentations provide examples from Ghana and Zambia of strategies that the private sector can use to exploit the AfCFTA within the context of the pandemic.
Ghana previously imported most of its personal protective equipment or personal protective equipment, but since the pandemic, the government has galvanized 14 local clothing firms to manufacture PBT. According to Ghana’s Deputy Minister of Trade, Robert Ahomka Lindsay, these businesses now produce 1,000 articles daily. The development created 10,000 jobs.
“Traditional value chains have been challenged … it has made us realize that we can not rely on the value chains,” Lindsay said.
Some of the sectors worst affected in Africa, such as tourism, aviation and education, have shown resilience in the food industry, which used e-commerce for marketing during the pandemic, Kenneth Baghamunda, Dir. General, Customs and Trade, East African Community Secretariat. Zambia’s success with borderless cashless payment solutions and other innovations since COVID-19 was another example of favorable results.
“We need to look at what value chains need to be developed and we need to link our policies to the right institutional framework,” he said.
Amba Mpoke-Bigg, African Development Bank, Department of Communications and External Relations, African Development Bank, Email: email@example.com