Established in 2018, the African Continental Free Trade Area (AfCFTA) represents perhaps Africa’s biggest opportunity for the next few decades in its battle against poverty of all forms; energy and infrastructure included. Against the backdrop of the tens of millions of Africans that have been plunged into extreme poverty by the onslaught of the covid-19 Pandemic, a strong case must be made for a speedy implementation of the African Continental Free Trade Area. It is projected that under the AfCFTA, extreme poverty will significantly decline across the continent. West Africa, for instance, would witness the biggest decline in the number of people living in extreme poverty; namely a decline of approximately 12 million people, which is more than a third of the total for all of Africa. But beyond extreme poverty eradication, it’s about time that the true economic might of Africa is realised through intra-African trade. Compared with Asia and Europe with 59% and 68% intra-continental trade, only 17% of exports from African countries are intra-continental (World Economic Forum), due to age-long tariff and non-tariff barriers, which the AfCFTA is essentially established to eliminate. The fact that intra-African trade constitutes only about 2% of global trade means there are significant gains to be realised if the AfCFTA is properly implemented. A continent that controls vast resources and a 1.2 billion-strong consumer market should be an economic no-brainer of a success, especially considering its young burgeoning and vibrant population. The African socio-economic and political construct under the AfCFTA dispensation must...

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum. About the author: Ratnakar Adhikari, Executive Director, Enhanced Integrated Framework (EIF) & Taffere Tesfachew, Acting Managing Director, UN Technology Bank for Least Developed Countries Limited use of technology is inhibiting LDCs’ path towards structural transformation. These countries can implement measures in several areas to build their technological capacity. Innovative approaches to resource mobilization should be explored to fund such transition. Structural transformation is the process of moving resources from low productivity to higher productivity and skill-intensive sectors, thereby setting development and economic catch-up into motion. While many countries have achieved structural transformation in a matter of decades, the least developed countries (LDCs) have been notoriously slow in this respect. One of the factors for this lack of structural transformation is LDCs’ overwhelming dependence on commodities for production and exports. According to the United Nations Conference on Trade and Development’s Commodities and Development Report 2021, over 75% of African LDCs depend on commodity production for over half of their export earnings, though Asian LDCs have a relatively diversified export basket. The report also suggests that it is extremely challenging to move away from the trap of commodity dependence and attain structural transformation. Fortunately, a combination of technology and global integration can help countries on this path. When it comes to technological advancement and its effective use, the LDCs are at the lower end of the ladder. According to the World Intellectual Property Organization (WIPO)’s Global Innovation Index 2021, which monitors the state of technological...

The Democratic Republic of Congo (DRC) has reaffirmed her willingness to join the East African Community. DRC’s Deputy Prime Minister and Minister for Foreign Affairs, Christophe Lutundula Apala Pen’Apala, said that DRC was looking forward to increased trade and investment, and strengthened relations with EAC, adding that her relations with EAC Partner States had largely been at a bilateral level. Pen’Apala said that DRC was keen on cooperating with the EAC for maximum exploitation of both natural and human resources in the region. Pen’Apala expressed hope that this would be the last round of negotiations before DRC is admitted into the EAC. The Minister said that DRC has a big population who are consumers that constitute a big market for the EAC, adding that DRC was also in dire need of investors and was therefore offering incentives for entrepreneurs who would like to invest in the country. Pen’Apala noted that DRC faces security challenges in the eastern part of the country, adding that the country was therefore keen on tackling these challenges together with the EAC. The Minister disclosed that DRC had embarked on a national programme of reconstruction in various sectors including infrastructure, agriculture, energy and environmental conservation. He said that DRC had the world’s second largest natural ecosystem in the Congo Forest and was keen on preserving this system from wanton destruction to mitigate the effects of climate change. Asked whether DRC’s membership to EAC would pose challenges because it already belongs to COMESA and SADC, Pen’Apala said...

Ultimately, though, the only way to defeat poverty and graduate from aid is greatly to increase Foreign Direct Investment (FDI) – of which there is a vast potential reservoir in the world looking for the right destination, writes Peter Fabricius from the Institute for Security Studies (ISS). Ultimately, though, the only way to defeat poverty and graduate from aid is greatly to increase Foreign Direct Investment (FDI) – of which there is a vast potential reservoir in the world looking for the right destination, writes Peter Fabricius from the Institute for Security Studies (ISS). Aid remains among the most important elements of the relationship between the developed world and Africa’s least developed countries (LDCs) in particular. Africa has received more aid than any other region, an accumulated total of more than US$2,4 trillion between 1960 and 2018, according to Jakkie Cilliers in his book The Future of Africa. Yet many observers and analysts believe there has been precious little to show for it. In her 2009 book Dead Aid; Why Aid Makes Things Worse and How There is an Another Way for Africa, the Zambian economist Dambisa Moyo, asked why, despite such large aid, most sub-Saharan countries still “flounder in a seemingly never-ending cycle of corruption, disease, poverty, and aid-dependency.” Her answer was that aid is inherently bad because it creates dependency by removing much of the incentive for African countries to fend for themselves – for example by improving their tax collection systems to earn their own government revenue. It is mostly paid...

Vice President Salous Chilima on Tuesday addressed the 21st Common Market for the Eastern and Southern Africa (Comesa) summit in Egypt with a call for the regional block to move swiftly in adopting digitalisation and developing economic recovery plans following the devastation of the Covid pandemic. Chilima—who during the Sadc Summit in Lilongwe urged member states to embrace digitilisation and e-government—is representing President Lazarus Chakwera at the summit. Advertisement He said there was urgent need for Comesa to develop a robust economic recovery plan in order to build back economies because soon Covid will no longer be an excuse to people. “The Covid pandemic has reversed some of the gains that we had achieved over years in our respective countries. We, as Malawi, also have had our fair share of the negative impact that the pandemic caused on the economy,” he said. Chilima said on regional level, the value of Comesa’s total exports to the world decreased by 27 percent from $123.4 billion in 2019 to $90.3 billion in 2020, while the value of Intra-Comesa total exports declined by 11 percent from $10.9 billion in 2019 to $9.7 billion in 2020. Advertisement “What is more worrying is that the uptake of vaccines in the region is currently less than three percent. Therefore, as a response, we need to develop a robust economic recovery plan. “We need to build back. We need to build resilience. Soon Covid 19 will no longer be an excuse to our people. As a regional group,...

Industrialisation is crucial for Africa’s development and the implementation of the African Continental Free Trade Area (AfCFTA) could provide crucial impetus in the coming years. Major challenges and opportunities for Africa’s transformation model present themselves continuously. African countries have responded to Covid-19 by resorting increasingly to digital solutions but to a lesser extent with greener, fiscal measures. Prospects for African manufacturing at this year’s Africa Industrialisation Day appear brighter than last year when Africa was in the middle of the largest economic crisis for decades. While economic recovery is still slow, appropriate support linked to the implementation of the AfCFTA can boost manufacturing prospects significantly. Progress in Africa’s manufacturing performance In a paper published earlier this year, Carlos Lopes and I argued that discussions around premature deindustrialisation (a decline in the contribution of manufacturing to GDP ahead of its normal development path) were in fact premature in relation to many African countries. Taking recent World Bank World Development Indicators (WDI) data for the subset for sub-Saharan African countries, the share of manufacturing in GDP in 2020 was 12%, the same as it was in 2002, but up from as low as 9.2% in 2010. Despite the downturn in 2020, annual growth in real manufacturing value added was 3.3% over the decade to 2020 (up from 3% in the previous decade), significantly better than the 2.8% (and 1.9% respectively) annual growth for the world as a whole. Some countries have really transformed their industrial sector in recent years. Morocco surpassed South...

The Secretary General of the African Organisation for Standardisation (ARSO), Dr Hermogene Nsengimana, has called on African governments to strengthen their standards regulation agencies to position them as the springboard for economic development. He said standards played a critical role in the competitiveness of businesses and must be prioritised while the continent implemented the African Continental Free Trade Area (AfCFTA) agreement to reap the benefits of the world's biggest trade bloc. Dr Nsengimana made the call at the 65th meeting of the ARSO Council in Accra last Wednesday. The ARSO Council members, who are heads of the standards organisations of member states, have met in Accra to identify a means of facilitating seamless intra-Africa trade through harmonised infrastructure. The meeting is taking place amidst calls to accelerate the harmonisation of standards in the region to achieve the objectives of the AfCFTA. It is being held under the theme: “The beginning of trade among African countries under the AfCFTA Agreement: Boosting intra-African trade within the African single market through ‘One Standard–One Test–One Certificate–Accepted Everywhere”. Harmonisation In order to reap the benefits of the free trade agreement, Dr Nsengimana said the ease of doing business in the region must be deepened by eliminating trade barriers and harmonising standards. “When we talk about one standard, we are talking about harmonisation and we are looking at equal collaboration or mutual recognition arrangement so that we can help our private sector to trade from Ghana to Kenya or South Africa with one standard so that...

The World Trade Organization's (WTO) forthcoming 12th Ministerial Conference (MC12), to be held from 30 November to 3 December, comes at a time when the COVID-19 pandemic has disrupted human and economic activities and heightened the significance of trade-related responses to accompany other global initiatives. Enhancing the participation of developing countries, including Commonwealth least developed countries (LDCs), in the multilateral trading system is indispensable because trade is an essential tool for growth and development. The WTO LDC Group, which includes eleven of the thirteen Commonwealth LDCs, have prepared and advanced proposals on their priorities and expected outcomes at MC12.[1] The below analysis by Colin Zhuawu, Economic Adviser (Multilateral Trade), Trade, Oceans and Natural Resources Directorate of the Commonwealth Secretariat, assesses the priorities of Commonwealth LDCs at MC12 and suggests possible strategies to pursue a favourable outcome. Multilateral Negotiating Issues Agriculture Discussions on Agriculture focus on several disciplines intended to correct trade distortions in agricultural trade, encompassing domestic support, export competition and market access. The discussions provide an opportunity for developing and least developed countries to address their food security needs through a Special Safeguard Mechanism and provision on Public Stockholding (PSH). Reductions in trade distorting domestic support by the world's largest subsidisers is imperative to improve access to markets for farmers in Commonwealth LDCs. Due to the highly complex and technical nature of deliberations on domestic support, a realistic outcome at MC12 would be agreement to initiate a specific work programme post-MC12 on the necessary reductions. However, Commonwealth LDCs might...

With a landmass bigger than India, China, the US and Europe combined, few doubt the scale of the African continent and its resources. However, until recently, only some have seen it as the growth market that it is fast becoming. Africa has grown its economy by five per cent annually over the last decade. With its population steadily growing towards two billion, the continent is projected to have the largest workforce by 2040. Also, with a collective GDP of $2.6 trillion by 2020 and $1.4 trillion of consumer spending, many see the impact of around 500m new middle-class consumers. After witnessing its worst recession in half a century in 2020, Africa’s economy is forecast to grow at a healthy pace of 3.8 per cent in 2021, driven by rising global demand as restrictions are eased, untapped market opportunities, a rebound in commodity prices and a rise in oil prices. While Africa’s vastness and diversity allow for entrepreneurship to flourish across communities, it also poses challenges to creating universal solutions for issues such as poverty and food security, because each country has its unique capacity for innovation. For instance, while Ethiopia, Uganda, Ivory Coast, Egypt, Ghana, Rwanda and Kenya ranked in the top 10 fastest growing economies worldwide in 2020, the continent still holds some of the poorest nations in the world. African economies are not the same in design. We have the oil exporters: Nigeria, Angola, Libya and Algeria; and the more diversified economies found in Egypt, South Africa and Morocco. Then...

Summary All Congo’s raw materials, including the most critical for harnessing clean energy in the era of combating global warming, will suddenly become locally available to the East African countries at their different stages of industrial development. Citizens of space-constrained EAC member states will be able to grow food in the extensive fertile soils of the Congo that are abundantly watered by nature. All seven EAC members can just develop one power dam at Inga Falls to produce all the electricity they will need for all their factories, homes railways and vehicles as the world automakers speed up the outlawing of fuel-burning vehicles. Unless something goes terribly wrong in the next couple of weeks, the Democratic Republic of Congo will start 2022 as a member of the East African Community. The EAC Council of Ministers last week approved DRC’s application after Kinshasa reportedly ticked all the boxes required to qualify for membership. The EAC Summit of six presidents will go through the motions to endorse and then brother Felix Tshisekedi will join their select club as the seventh member. Here are ten points to ponder before you decide to be excited or depressed about this important development. 1. The Common Market of the Community/Customs Union will grow dramatically from 180 million to 270 million people. 2. All Congo’s raw materials, including the most critical for harnessing clean energy in the era of combating global warming, will suddenly become locally available to the East African countries at their different stages of...