ECA estimates that by 2045 intra-African, trade in agri-food, industry, and services sectors will increase by nearly 35% compared to a situation without the AfCFTA

The private sector is recognized as an indispensable stakeholder in the African Continental Free Trade Agreement (AfCFTA), especially given its ability to catalyze sustainable economic development and job creation.

“Africa’s private sector accounts for 80 percent of total production, two-thirds of investment, and three-quarters of credit, and employs 90 percent of the working-age population,” said Stephen Karingi, Director of Regional Integration and Trade at the Economic Commission for Africa (ECA). 

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Speaking during the opening of a three-day Africa Prosperity Dialogues on 26 January in Ghana, Mr Karingi called on captains of trade and industry to “own and drive the implementation of the AfCFTA by supporting their governments but also by holding them to account.”

ECA estimates that by 2045 intra-African trade in agri-food, industry, and services sectors will increase by nearly 35% compared to a situation without the AfCFTA. But governments must implement the Agreement “fully and effectively” for such impressive projections to come true, and the private sector must also seize the opportunities of a large single market created by the AfCFTA.

The role of the private sector was also echoed by the chairperson of the African Prosperity Network, Gabby Otchere-Darko, who stated “we (the private sector) should make the fulfillment of the promises of the AfCTA  “our agenda.”

The event was officially opened by Ghana’s Vice President, Mahamudu Bawumia, who pointed out that “we have everything we need to transform Africa into a global powerhouse of the future,” adding  “the AfCFTA has set the stage for Africa’s industrialization.”

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UN Assistant Secretary-General and Director of UNDP’s Regional Bureau for Africa, Ahunna Eziakonwa, said “it is through the AfCTA that we will industrialize” and create rather than “export African jobs”

“An Africa that produces its people’s needs is not just the Africa we want, it is the Africa we need,” Ms Eziakonwa said.

Mr Karingin noted, however, that the African private sector of which 90 percent are small and medium enterprises face challenges in conducting cross-border trade due to non-tariff barriers such as complex customs procedures, lack of access to finance, high costs of transportation and logistics, and lack of access to information, among others.

He cited inadequate infrastructure connectivity, rudimentary productive capacity, and risky or expensive payment systems as some of the barriers to trade, adding “the cost of doing business across African borders remains high, leading to the regrettable situation where African products are uncompetitive in African markets. “

Africa’s weak productive capacity and consequent excessive reliance on imports for essential products expose the continent to external shocks such as the COVID-19 pandemic and the Russia-Ukraine war.

“When Covid struck, African countries were confronted with a lack of access to basic medical supplies because Africa imports over 90 percent of its supplies. When the Russia-Ukraine crisis dawned, several African countries faced a crisis of food security because wheat and corn exports from Russia and Ukraine were suspended,” Mr. Karingi said.

The AfCFTA is expected to integrate and consolidate Africa into a single USD 2.7 trillion market by eliminating many of the barriers to trade present across the Continent. It provides the platform for Africa to diversify its economy and achieve resilience to natural and manmade shocks, including climate change.

Wamkele Mene, Secretary General of the AfCFTA Secretariat, posited that the ambition to integrate Africa dates back to the founding of the Organisation for African Unity (now the African Union). But the challenge now, he noted, is to “transform such ambition into action,” citing vaccine manufacturing in some African countries as one of the ways in which the continent is moving from ambition to action under the AfCFTA.

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The maiden Africa Prosperity Dialogues is organized by the Africa Prosperity Network in collaboration with the ECA, the AfCFTA Secretariat, and the Government of Ghana.

Mr Karingi reassured participants that “ECA has been there from the beginning; ECA will be there to the end. Africa is ready to turn the promises of the AfCFTA to reality, and ECA will be there all the way.”

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

The first intra-African trade transaction through blockchain technology worth $270 million has just been successfully completed between Morocco and Ethiopia, according to the Office Chérifien des Phosphates (OCP), one of the world’s leading phosphates fertilizer suppliers. 

The first of its kind in Africa, the transaction involving the export of fertilizers from Morocco to Ethiopia was carried out thanks to the collaboration between Dltledgers, a company specializing in the digitization of trade and the Bank of Commerce and Development of East and Southern Africa (TDB).

“Dltledgers made available its technology allowing the transaction to be carried out digitally and the import-export process to be concluded in less than 2 hours against” paper “transactions which are rather finalized in 3 weeks or more because of the processes time-consuming transfer of physical documents via the traditional banking system,” a statement released by Dltledgers reads, in part.

Here Is What You Need To Know

• For its part, TDB is responsible for providing the necessary funds to allow Ethiopia to import the fertilizers it needs to increase its agricultural production in the face of growing demand from its population, the second largest on the continent. African.

• In the coming months, the OCP says it wants to increase its total trade transactions with Ethiopia to $400 million.

“This initiative is part of the Group’s digitalization strategy aimed at contributing in particular to reducing the trade finance gap in Africa and stimulating intra-African trade, in particular in the fertilizer sector, through the inclusion of digital,” indicates the Moroccan group.

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• In Ethiopia, OCP is working with state-owned Chemical Industries Corporation (CIC) to build a fertilizer production complex in Dire Dawa with a production capacity of 2.5 million tonnes per year. 

• Ethiopia currently imports half of its fertilizers from Morocco, and agriculture plays a vital role in the country’s economy. 

• It represents 31% of the country’s GDP and 66% of its labor market.

• The OCP Group thus becomes the first African company to execute an intra-African commercial transaction using blockchain technology in the African agricultural sector.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

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