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AfCFTA Drives Optimism Among Africa’s CEOs Despite COVID-19 Uncertainty

December 15, 2021

African CEOS expressed optimism about their business and economic growth over the next 12-18 months. A new survey of African CEOs from 46 countries conducted by PAFTRAC, the Pan-African Private Sector Trade and Investment Committee, found that CEOs were confident that their businesses will grow in the next year. A majority are also optimistic about the economic outlook of their industry. In addition, 87% of respondents believe that there will be in increase in intra-African trade as a result of the African Continental Free Trade Agreement.

The CEOs believe that the global recovery led by greater demand will drive Africa’s economic recovery. Interestingly, their positivity stems more from their faith in international and regional trade strategies and agreements such as enhancement of trading opportunities through AfCFTA, rather than as a result of national economic recovery strategies like ease of lockdown restrictions or better national business climate.

Commenting on the survey, Pat Utomi, Chair of PAFTRAC, said, “The positive sentiment expressed by survey respondents demonstrates the potential of the AfCFTA and the eagerness of Africa’s private sector to take advantage of the market access opportunities it offers. However, access to trade information, trade enabling infrastructure and trade finance emerged as key constraints that need to be addressed to ensure that intra-African trade opportunities are exploited for the benefit of African SME’s.

“One major advantage of AfCFTA is that it can enable aggregation across borders so that African countries can pool products in volumes and quality that make them more competitive in global markets.”

The respondents expressed strong faith in AfCFTA. Over 71% of respondents believe that the AfCFTA will encourage them to invest to grow their business regionally. More than half of respondents (57%) also believe that the AfCFTA will open up new markets to export regionally and provide the necessary frameworks to export more regionally (62%). The four top export destinations in Africa are South Africa (27%), Ghana (25%), Kenya (25%) and Nigeria (19%).

African CEOs said the key challenges they foresee, which will have a negative impact on Africa’s economic recovery prospects, are a lack of access to finance (64%), the ongoing impact of the COVID-19 pandemic on economic opportunities (61%) and a slow down or lack of public sector investment and expenditure (48%).

Though the appetite for regional trade is strong, a majority of respondents placed access to trade finance and access to investment capital as the two biggest constraints when trading regionally.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

New Oxford Business Group Report Shows 72% of African CEOs Think the AfCFTA Will Improve Their Earnings

May 15, 2019

July is on its way and The African Continental Free Trade Area (AfCFTA) is already gaining momentum. Oxford Business Group is not failing to spur the moment. The Group’s latest survey says about 72 % of African CEOs believe the AfCFTA will have a positive impact on intra-regional trade , and by extension their businesses.

A Breakdown of The Survey

Named “Business Barometer 2019: Africa CEO survey,” the survey was conducted on a face-to-face basis with 787 African CEOs .

The survey also revealed that 84% of them have positive expectations of local business conditions in the coming twelve months.

The respondents’ companies are based in eight African countries namely, Morocco, Kenya, Nigeria, Egypt, Ghana, Djibouti, Algeria and Côte d’Ivoire.

78% of them indicated that their firms were planning at least one significant investment in the next twelve months.

38% think that the factor that will most likely affect their economy would be a rise in oil prices.

The second factor is political or security instability in neighboring countries, according to 23% of the respondents.

Interrogated on the most needed skills in their countries, 36% of the respondents revealed that leadership was most needed while research, development and engineering were chosen by 14% as the most needed competence.

The Business Barometer of OBG is according to data collected obtained from companies that fall into the following parameters, among others:

-17% of companies surveyed were based in Morocco
-16% of companies surveyed were based in Nigeria
-15% of companies surveyed were based in Egypt
-13% of companies surveyed were based in Côte d’Ivoire
-13% of companies surveyed were based in Ghana
-12% of companies surveyed were based in Algeria
-11% of companies surveyed were based in Kenya
-5% of companies surveyed were based in Djibouti

Ghana, Egypt Lobby For Continental Free Trade Headquarters

Ghana is one of the six African countries that is bidding for CFTA to be hosted by them.

Aside Ghana, other countries bidding to host CFTA Secretariat are Ethiopia, Eswatini (formerly Swaziland), Madagascar, Kenya, and Senegal.

Ghana’s Information Minister, Mr Kojo Oppong Nkrumah, on behalf of the Ghanaian government, received the 10-man AU delegation led by Ambassador Rosette Nyirinkindi Katungye, an advisor on Regional Integration at the Bureau of the office of the AU Chairperson, shortly after they arrived at the Kotoka International Airport.

Related: More Revealing Facts About the African Free Trade Agreement and Why Nigeria is Out

Mr Nkrumah said Ghana was looking forward to grabbing the opportunity which comes with several benefits, including the creation of jobs.

“In the coming days, Ghanaian officials will take them round on an inspection to show our preparedness. If you have the secretariat in your country, it is a huge deal which will bring many opportunities for the growth of this country,” Mr Nkrumah said.

The Africa Continental Free Trade Area is a planned free trade area outlined in the Continental Free Trade Agreement among 49 of the 55 AU nations.

Ghana’s President Nana Addo Dankwa Akufo-Addo, in March last year, appended his signature to the three legal instruments, namely the agreement establishing the Continental Free Trade Area; the Protocol on Free Movement of Persons and the Kigali Declaration which have brought the CFTA into fruition.

Image result for AfCTA chart — (c) American Shipper

Charles Rapulu Udoh

Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.