Why the AfCFTA must remain a top priority

July 8, 2020

Changes induced by the pandemic are great opportunities for the rest of the world to invest in Africa’s productive sectors and be part of its structural transformation. Photo: UNDP Benin

New York – 2019 was a year for the books.  Africa’s continental free trade area (AfCFTA) came alive in that colorful ceremony of Heads of State in Niamey – Niger.  We had grown accustomed to the projections – that intra-African trade – standing at about 18 per cent - will double by 2040.  We knew the projections were an understatement – for their focus on trade in goods alone – in a formal sector sense – amidst a highly informal African marketplace – with thriving but un-captured trade at borderlands, and a vibrant services sector.

And so we started to look at bringing the promise to life – focusing on enabling environments and productive capacities for women and youth.  We, like others, were exuberant about Africa’s promise – to be taken further by the machinery of boosted intra-African trade.

Make no mistake – COVID 19 has set this back – not just from the perspective of the pace of unfinished business in negotiations on rules of origin – proving technically complex amidst established rules of procedure – but also from the still-to-be exchanged offers for preferential treatment that will be the basis for new trading arrangements.

Yet COVID 19 presses more urgency on the need to fast track the start of trading of the AfCFTA.   We knew about Africa’s place in global supply chains – but no one was ready for the stark iteration COVID 19 has exposed.  Entire economies have shuttered - as demand for commodities freezes.  On the other side of the equation – the imports – Africa has been stranded – for its largely nonexistent production sites of medical equipment.  COVID 19 has laid bare Africa’s net consumption role in global trade – a fact previously known based on terms of trade data - but again, put in sharp focus amidst COVID 19.  If the logic of what has happened to food and to PPE is sound – then assumptions of negative effects to African industries that rely on capital goods inputs for production (evidenced in zero rated tariffs in many Regional Economic Communities) are valid.

Disruptions in global supply chains have exposed a deeper systemic problem – of production value chains structured around extraction – and not industrialization, making more urgent the need for diversification and structural transformation in Africa.

And this is not just economic orthodoxy.  It is about creating and keeping jobs within Africa.  It is about harnessing Africa’s resources (that are the base for many of the world’s most prosperous industries) for Africa’s growth – creating jobs and promoting inclusive growth in Africa.

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

So, what has changed?

COVID 19 has demonstrated Africa’s ingenuity – from production of facemasks across literally all of Africa, to ventilators in Kenya – to testing kits in Senegal and Cote d’Ivoire, to robots in Rwanda – not to mention gowns and other PPE.  These inventions were literally crowded out in the pre – COVID 19 environment.

The power of a mindset and a narrative can change a reality.  COVID 19 allows us to embrace that 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.

For the development professional, the challenge is how to nurture this trend – 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.  This can be done through investments in quality assurance so that safety and technical standards can be met to protect consumers at home and in export markets.  Speaking to innovators is essential in understanding how to leapfrog their footprint.  Investing in agriculture is urgent too – revisiting models that understand and build on existing production patterns – so that there is food sufficiency across Africa.

And these are great opportunities for the rest of the world too: to invest in Africa’s productive sectors and be part of its structural transformation.

The resilience displayed amidst broken global supply chains and export bans from countries with capacity – has forced Africa to innovate – and to produce.  We must read and write about these realities.  But more so, we must recognize and lift them up – targeting them for programme support – and ensuring that they become part of Africa’s development 2.0.

The AfCFTA can take us there – by starting trading sooner – rather than later.

This op-ed was originally published on IPSNews