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...

Malawi’s leading commercial banker, Stock Exchange listed FDH Bank impressed the international stage and left an indelible mark at this year’s Intra-African Trade Fair (IATF) in Durban, South Africa. FDH Plc, which is the only Malawian bank to have participated at the 2021, mounted a business stand at one of the continent’s biggest business trade fairs to showcase its business packages. Chippi Saka, a Malawian based in South Africa and working as a trade and market officer in the department of economic integration at the African Union Development Agency (AUDA) formerly NEPAD. NEPAD said he has been impressed by FDH bank’s level of excellence and commitment to quality banking services. Speaking in an interview with Nyasa Times from his base in one of the busiest cities on the African continent, Johannesburg, Saka who is also a qualified accountant, said: “FDH Bank is a very serious and forward-thinking bank and I am impressed with their professional demeanour at Africa Intra-African Trade Fair. “I have in the past four days been visiting the Malawi stand at the Intra-African Trade Fair. FDH bank is amazingly impressive – It is the most ‘impressive’ bank and the only bank from my land of birth showcasing their products and services.” Saka said FDH Bank is ticking all the right boxes in its quest to becoming an international bank adding that all its services are people-centred. Said Saka: “FDH Bank is meeting people’s needs. FDH is selling itself vigorously to world stage. FDH is repositioning. FDH is...

  With the African Continental Free Trade Area (AfCFTA) poised to generate potential gains of up to $450 billion according to the World Bank, the International Trade Centre (ITC) and the Organization of Women in International Trade (OWIT) in Nairobi, in collaboration with OWIT Nigeria and OWIT Zimbabwe, are partnering to support African women entrepreneurs to participate in intra-regional trade. Speaking during the Africa Women Trade Conference organized by the two organizations on November 25 and 26, Aissatou Diallo, ITC Senior Coordinator for the AfCFTA and Least Developed Countries, said that trade under the AfCFTA would drive larger gains in earnings for businesswomen. Themed ‘Empowering Women in Intra-Africa Trade’, the conference encourages women entrepreneurs to trade cross continentally, taking advantage of the AfCFTA’s enormous potential for trade within the regional and continental markets. The conference further focuses on Africa’s investment opportunities while creating an opportunity for women entrepreneurs and business leaders to meet with investors. Supported by ITC’s One Trade Africa programme, the two-day hybrid event, with 200 participants on-site and 1,000 joining virtually, brings together traders, government agencies, financial institutions, investors, small businesses and local eco-system partners. Experts attending the conference say it is critical to establish what the AfCFTA means for women in terms of their participation in cross-border trade, value chains and public procurement from the onset. They also underscore women and youth are key stakeholders in continental economic development, as Africa’s informal sector accounts for 85% of the continent’s total economic activity; and while women account for 90% of the labour force in the informal...

  The Board and Council of TradeMark Africa (TMA) have today announced that Frank Matsaert, Chief Executive Officer (CEO), will step down as TMA’s CEO on 1st July 2022, after 12 years at the helm of the institution. A search for a new Chief Executive Officer has started. The Board and Frank have planned adequate time for this process to be completed, ensuring the next CEO is recruited and settles well before Frank’s departure. Frank established TMA in 2010 with a budget of US$60 million and had by close of 2020, mobilised over US$1.1 billion from TMA’s 11 donors for TMA’s successful programme.  Frank has led the organisation since its start in implementing an innovative and impactful aid-for-trade programme across 12 countries in Eastern, the Horn and Southern Africa. Over that time TMA has become a leading aid for trade agency globally.  Under his visionary leadership, the organisation has forged partnerships with partner Governments and trade agencies, Regional Economic Communities especially the EAC, the AFCFTA Secretariat, international trade organisations such as the WTO, multilateral agencies including the African Development Bank (AfDB), Trade Development Bank, the World Customs Organisation, UNCTAD and ITC, and the private sector The organisation aims to further expand its operations to support implementation of the AFCFTA over the coming years with its unique blend of trade facilitation partnerships supported by strong funding support from its growing donor base, commercial partners, and international foundations. Additionally, the organisation has secured a new funding envelope for West and Southern Africa...

Dar es Salaam. Members of the business community yesterday warned that the benefits of the African Continental Free Trade Area (AfCFTA) will not materialise unless some pending trade barriers were addressed. The impediments to trade include lack of harmonisation of standards, failure to sign the implementation of the Single African Air Transport Market (Saatm) and the export of raw commodities. The list also includes visa and work permit requirements, multiple testing agencies, unnecessary roadblocks and random checks along transport corridors/roads and high cost of cross-border trade that may represent barriers to Micro, Small and Medium Enterprises (MSMEs). The East African Business Council (EABC) trade and policy advisor, Mr Adrian Njau, said for AfCFTA to be successful, countries must address more non-tariff barriers and build regional value chains. “Only 13.6 percent of the product standards have been harmonised. This is a potential source of NTBs for cross-border trade in the continent,” he stated at the private sector’s meeting. The AfCFTA - whose trading started officially on January 1 this year - aims to bring continent-wide free trade to 1.3 billion people in a $3.4 trillion economic bloc that is Africa. Mr Njau said to create an internal market for African products, African markets must begin to manufacture value-added goods and deepen their regional value chains. The Tanzania Private Sector Foundation (TPSF) executive director Francis Nanai said the AfCFTA objectives will remain elusive if local businesses were unable to take full advantage of the opportunities in terms of trade and investment. As it...

To set Africa firmly on the path towards economic and social transformation, private sector engagement is crucial. The African Union, has throughout the years worked closely with the private sector to define the great contribution and significant role the private sector plays in driving the economic development Agenda of the continent. The private sector in Africa accounts for over 80 per cent of total production, two thirds of total investment, and three fourths of lending within the economy. The sector also provides jobs for about 90 per cent of the employed working-age population. Further, Small Medium Enterprise (SMEs) are the backbone of the African private sector accounting for over 90% of businesses in Africa and translating to 63% of employment in low-income countries while contributing to over 50% of the Gross Domestic Product (GDP) according to the UN Economic Commission for Africa. Although trends in intra-African trade point toward progress, trade within Africa remains very low in proportion to total global trade, highlighting the need for enhanced intra-African trade. The tides however look promising with the launch of trading under the African Continental Free Trade Area (AFCFTA). The AFCFTA is expected to increase intra-African Trade by over 50 per cent, and will boost the continent’s GDP by more than $40 billion, and its exports by more than $55 billion. To promote private sector engagement, the African Union has implemented programmes that seek to form strategic partnerships with the private sector through Public-Private Partnership (PPP) engagements, including developing strategic partnerships with...

Rand Merchant Bank (RMB) recently released its list of top sectors to invest in Africa. This targets investors eyeing real assets or looking to expand businesses that rely on physical infrastructure. This year’s approach included tenets of the operating environment, fiscal scores and development plans, all of which are key to attracting investments amid Covid-19. Egypt While Egypt’s economy was hard hit by the pandemic, it was also one of the first to bounce back towards growth. The country has made itself a beacon for overseas investors, compelled by favourable incentives and a large and dynamic domestic market. Investors have been attracted to Egypt’s intoxicating mix of rapid gross domestic product (GDP) growth, a strategic geographical position, a skilled labor force and, crucially, a large domestic market. Morocco The economy of Morocco continues to benefit from political stability. A special fund to combat Covid-19 was established in 2020, representing 2.7 per cent of GDP. Two-thirds of the funds were to be provided by private sources and one third by the government. Morocco’s attractiveness as the continent’s fifth-largest business market. Morocco’s rapid technological growth has also been encouraged by various government initiatives including the country’s location which also provides an opportunity for many western countries to utilize it as an opportunity to gain an investment foothold in the rest of Africa. South Africa The country offers a strong manufacturing and retail base that continues to support southern African regional economies with goods and services. South Africa has a world-class business infrastructure,...