It is clear that the COVID-19 pandemic has changed plans across the globe and Africa will certainly be no exception. Now what? many are asking, since their most ambitious project, the launch of the African Continental Free Trade Agreement (AfCFTA), has had to be postponed. The largest free trade area in the world that could be vital for the recovery of the economy of the African continent. A new Africa is still around the corner, as the planned date for the entry into force of the great agreement was July 1st and has had to be postponed due to the coronavirus.
Africa’s great convention
The African Continental Free Trade Agreement (AfCFTA) seeks to create the largest zone without trade barriers in the world. This more ambitious African integration plan had to start on July 1, but the date was postponed due to the covid-19 pandemic, despite the fact that African countries are not among the most affected by this disease.
At the moment 54 of the 55 member states of the African Union have signed the treaty (except Eritrea), which entered into force on May 30. AfCFTA is expected to be the world’s largest free trade area with a market of more than 1.3 billion people and a combined GDP of about $ 3.4 trillion.
Opportunity in the midst of the crisis
The crisis caused by the pandemic gives African nations a unique opportunity to stimulate greater cooperation if the necessary measures are applied in an accelerated manner. For Africa, now is the time to reinvent and reposition itself. Changes in demand are currently taking place in the context of different value chains, in which African companies are involved.
The fact that its traditional intercontinental trade ties, with countries like China, were affected due to the pandemic restrictions, will be key for the development of regional cooperation, according to Thomas Birgen, fund manager of the AZA company, the largest African non-bank forex broker.
One example is the African Medical Supply Platform. This is a digital portal, launched by the African Union, which is going to serve to coordinate the difficult access, acquisition and distribution of the medical material needed by each member of the AU.
The aim is to enable AU States to respond quickly and effectively when the Covid-19 pandemic reaches its peak on the continent.
This experience with the new platform is expected to pave the way for the implementation of the African Continental Free Trade Agreement (AfCFTA).
Agroindustry: Growth with transformation
Another issue to work on is agro-industry, the keys to a real transformation being the following:
– The relocation of low value-added manufacturing.
– Commodity-based industrialization.
Agribusiness, offshoring of low value-added manufacturing, and commodity-based industrialization are the key to a more radical transformation. African countries, as they are endowed with an enormous amount of natural resources, must concentrate their energies on the exploitation and transformation of the country’s wealth rather than trying to diversify so as not to depend on basic products.
Despite criticism of this industrialization model, the experiences of other resource-rich countries such as Argentina, Malaysia and Thailand, Australia, Norway and Scotland show that such model, based on the exploitation and industrialization of its own resources, can lead to economic development. Examples from Africa itself show that such a model can be promising in terms of developing the elements of an ecosystem that promote innovation, added value and quality employment.
Agriculture is also an important vehicle for resource-based industrialization. Agriculture accounts for 65% of Africa’s employment and 75% of its internal trade. In this transformation, the most important agents will be small farmers. Now they need support and innovation.
The transformation of African economies through resource-based industrialization will not be easy. It will demand innovation, skills, a solid knowledge base on the structure of the industry and global value chains. It will also require that African countries pay particular attention to the global trade landscape, including barriers and preferences. Above all, the momentum of intra-African trade remains an imperative for creating the markets necessary for successful industrialization.
For all these reasons, from ADCAM through our project to support women, we achieve an autonomous income that allows them to support their homes and, ultimately, the family economy. In addition, the wealth generated by the work of Masai women reverts throughout the community, causing a very positive impact on the level of gender equality.