Why Accelerating Implementation of AfCFTA Must Remain a Top Priority

By Ahunna Eziakonwa Reprint | | Print |

Ahunna Eziakonwa is Assistant Secretary General, Assistant Administrator and Director of the UNDP Regional Bureau for Africa – where she oversees development programmes across 46 countries in Sub Saharan Africa.

Economic activity in Benin. Credit: @UNDPBenin

UNITED NATIONS, Jul 2 2020 (IPS) - 1 July 2020 was supposed to be the official date to start trading under the African Continental Free Trade Area (AfCFTA). It was a much-anticipated follow up to the 2019 African Union Summit, that launched the operational phase of the AfCFTA in a colorful ceremony in Niamey – Niger.

The world was watching as Africa purposely marched on in its drive for integration.

We had grown accustomed to the projections – that intra-African trade – standing at about 18 per cent (in 2019) – will double by 2040.

We knew the projections were an understatement – for their focus on trade in goods alone – amidst a highly informal African marketplace, of thriving but un-captured trade at borderlands, and a vibrant services sector.

And so, we started to look at bringing the promise to life. At UNDP, based on consultations with key stakeholders, thanks to our presence on the ground in 54 African countries, we focused on enabling environments and productive capacities for women and youth as a central piece of our Renewed Strategic Offer in Africa – shaping a signature initiative on women and youth in the AfCFTA.

We, like others, were exuberant about Africa’s promise that was expected to be leapfrogged by the machinery of boosted intra-African trade.

COVID 19 has set this back – not the promise, but the start of trading. This, for many reasons, not least the unfinished negotiation business on rules of origin and the still-to-be exchanged offers for preferential treatment that will be the basis for new trading arrangements.

We have seen demand for Africa’s commodity exports plummet, and their prices tumble. We have seen global and regional supply chains break – causing fear for food insecurity and critically needed medical supplies.

Ahunna Eziakonwa. Credit: UNDP

But it is precisely COVID 19 that must impress on us the sense of urgency to accelerate implementation of the AfCFTA. Africa’s place in global value chains requires critical upgrade – from the export of raw materials and low-processed goods, to higher value – added products.

COVID 19 has shown that production value chains structured around extraction must now give way to approaches that privilege diversified industrialization on the continent, to promote structural transformation in Africa.

And this is not just economic orthodoxy. It is central to development policy – that Africa’s resources (that are the raw materials for many of the world’s most prosperous industries) can and must form the basis for an industrial drive within Africa, crowding in Africans: women and youth – into decent jobs, thereby promoting inclusive growth and sustainable development in Africa.

No nation has broken the poverty trap without creating jobs in productive sectors. Africa’s productive sectors – agriculture, industry, services, and the digital economy, should be supported to create products for local, regional, and global markets.

So, what has changed?

COVID 19 has demonstrated Africa’s ingenuity and surfaced the footprints of the productive capacity we long sought. Necessity has birthed innovation – from Ghana’s hand sanitizers, to Rwanda’s facemasks – and similar production all across Africa, to ventilators in Kenya, to testing kits in Senegal and Cote d’Ivoire.

These inventions were literally unimaginable in the pre – COVID 19 environment.

The power of a mindset and a narrative can change a reality. COVID 19 allows us to embrace the reality that ingenuity is distributed in equal measure. If there is a silver lining out of COVID 19’s stormy clouds, it is that Africa can – industrialize.

There is an important role for trade policy in ensuring that such mindset shifts take place, and that new stories of jobs for women and youth in trade, gain momentum.

For the development professional, the challenge is how to nurture this footprint – to ensure that it was not just a passing phase. The goal must be to support scaling up of what is evidence of a proven concept (which has a ready market in the new-normal COVID 19 economy). This can be done in at least six ways:

• • Creating capacity to meet regulatory safety and technical standards, to ensure that products can access local, regional, and global markets.

• • Investments in renewable energy to power Africa’s industrial base.

• • Availing financing to oil the machinery of production in Africa.

• • Adopting incentivizing tax structures, including holidays, that provide room for SMEs and non-formal economy players to grow.

• • Establishing centres of learning and excellence where skills can be honed to produce at high standards.

• Using government procurement to provide markets to the products of women and youth.

The overarching architecture of enabling environments is the business of governments. Investing in measures to facilitate trade within and at borders will need to become a top priority of Africa’s strategies to resuscitate economies from the development reversal occasioned by COVID 19.

Speaking to innovators and producers about the support they need to get ahead, is essential in zoning in on how their footprint can be scaled, so that models used for capacity building respond to those specific needs, even where it calls for getting off the beaten track.

Investing in agriculture, services and the digital economy is inescapable, as the pandemic has laid bare the risks of not doing so.

Amidst broken global supply chains and export bans, Africa has been forced to fill the gap. Scientists, research institutions, women entrepreneurs and young people have stepped up to the plate to provide homegrown solutions that are working well in context.

And while questions remain as to whether these are firmly rooted green shoots of recovery, the answer lies in what African governments do in responding to this footprint.

Investing in the new wave of African entrepreneurs scores on the twin objective of resuscitating incomes and livelihoods, while preparing the body of products that would find markets in the AfCFTA.

We must read and write about these innovations. Even more, we must recognize and lift them up – targeting them for programme support – and ensuring that they become part of Africa’s development 2.0 model.

While COVID 19 has led to a postponement of the start of trading under the AfCFTA, we must continue to advocate for an early commencement of stronger intra-African trade. For therein lies an important part of attaining Africa’s development promise.