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Intra-African trade key to shaping common agenda

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Picture: GCIS Africa Day was celebrated at the Cradle of Humankind in Krugersdorp on Thursday. As Africans, we need to reinvigorate a sense of unity, common purpose and economic independence, says the writer.

By Naledi Pandor

As we mark Africa Day and 60 years of the AU, we celebrate the enormous promise and potential of this diverse and dynamic Continent. At this critical juncture in our Continent’s history, we have a lot to be proud of as Africans. With a burgeoning and vibrant youth population who are tech savvy and full of entrepreneurial ideas and innovation, we are confident that Africa is the future and the prospects on the horizon are bright.

South Africa plays a significant role in shaping the African agenda and has been actively involved in peacekeeping and conflict resolution. We have played a leading role in advocating for the interests of African countries in the UN, G20 and BRICS, and we also host many AU agencies such as the Pan-African Parliament and the New Partnership for Africa’s Development.

We are cognisant, however, that there is much work to be done to transform our Continent into a prosperous and peaceful home for our people. We are faced with multiple challenges, from climate change to unresolved conflict, and food insecurity. The war in Ukraine is creating a perfect storm for developing countries, especially in Africa. Soaring food, energy and fertiliser costs are making it difficult for people across the Continent.

To achieve our objectives, we must come together and implement Agenda 2063. As President Kwame Nkrumah of Ghana said in his address at the founding of the Organisation of African Unity in 1963: “We must unite now or perish… We recognise that our economic independence resides in our African union. Unite we must.”

At the time, Nkrumah was very much aware that all stock exchanges in the world were, (and are), preoccupied with Africa’s gold, diamonds, uranium, platinum, copper and iron ore. His lament in those early years was that “we have been too busy nursing our separate states to understand fully the basic need of our union, rooted in common purpose, common planning and common endeavour”.

We need to reinvigorate that sense of common purpose, especially when it comes to accelerating the implementation of the African Continental Free Trade Area (AfCFTA), which is the theme of the AU this year. We have made a great strides in charting a roadmap for advancing intra-African trade, and developing industrial hubs and infrastructure networks that will facilitate trade.

This is the year to focus on implementation and to turn our plans into tangible reality for the benefit of Africans from the Cape to Cairo. The Free Trade Area is a flagship project of Agenda 2063, aimed at creating a single African market for goods and services facilitated by the free movement of persons, capital, and investment to deepen economic integration.

The Free Trade Area aims to promote and attain sustainable and inclusive socio-economic development, gender equality, industrialisation, agricultural development, food security and structural transformation. Achieving the goals will make us more competitive in the global economy and self-reliant. The AfCFTA is the world’s largest free trade area, bringing together the 55 countries of the AU, and eight Regional Economic Communities.

The goal is to create a single Continental market with a population of about 1.3 billion people and a combined GDP of approximately $3.4 trillion (R67 trillion). As part of its mandate, the AfCFTA is to eliminate trade barriers and boost intra-Africa trade, and advance trade in value-added production across all service sectors of the African economy.

The AfCFTA will contribute to establishing regional value chains, enabling investment and job creation. Countries representing the five regions of the Continent – Egypt, Ghana, Kenya, Cameroon, Mauritius, Rwanda, Tanzania and Tunisia – participated in the AfCFTA’s Guided Trade Initiative this year, which is to facilitate trade among interested state parties that have met the minimum requirements for trade under the agreement.

The initiative supports matchmaking businesses and products for export and import between countries. The products earmarked to trade under the initiative include items like batteries, tea, coffee, processed meat products, sugar, pasta, ceramic tiles, and dried fruits, in line with the focus on value chain development. There have been exciting developments in connecting businesses and products for export and import.

The first AfCFTA Certificate of Origin for Rwanda was issued to Igire Coffee for coffee products destined for Ghana. Kenya also exported its first goods – exide batteries – to Ghana. The Initiative requires state parties to issue AfCFTA trading documents, including certificates of origin, importer and exporter declaration forms, and ensure that their customs laws and systems are aligned with the AfCFTA requirements.

We look forward to many other African countries joining this intra-African trade initiative. The Guided Trade Initiative will also focus on Trade in Services in the priority areas of tourism, transport, business services, communication, financial services, and transport.

The ultimate objective is to ensure that the Free Trade Area is operational, and the gains from the initiative are improved implementation in order to achieve increased inter-regional and intra-Africa trade that would yield economic development for the betterment of the Continent at large. For the Continent to reduce its vulnerability to external shocks and improve trade and economic performance, regional value chains are being developed under the AfCFTA Private Sector Engagement Strategy.

This will offer African countries an opportunity to use regional advantages to boost competitiveness, diversify product supply and export products with higher value-addition. The strategy focuses on four initial priority sectors or value chains – agro-processing, automotives, pharmaceuticals, and transport and logistics, based on the potential for import substitution and production capabilities on the Continent.

An initiative that will be particularly useful is the development of a comprehensive strategy for automotive manufacturing in Africa, which would lead to the development of an advanced automotive value chain on the Continent. We applaud the establishment of the Automotive Fund for any investment that seeks to pursue local content development in the automotive value chain. We must never lose sight of our enormous potential as a Continent. It is now for us to work expeditiously to implement the many plans put in place so that we can realise our full potential.

Dr Naledi Pandor Minister of International Relations and Co-operation