The Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat, Wamkele Mene, has, since assuming office in March 2020, persistently hammered on the urgent need for effective implementation of the trade pact to stimulate Africa’s recession-threatened economy.
Mene reiterated that theme on 3 December at the virtual launch of the Futures Report: Making the AfCFTA Work for Women and Youth.
Produced by the UN Development Programme (UNDP) and the AfCFTA Secretariat, the 100-page report details challenges and opportunities in intra-African trade, and reflects the views of some of Africa’s leading development experts, policy makers and business leaders, as well as the lived experiences of traders, including women and youth.
The authors tout the report as “a timestamp, capturing ambitions and efforts to begin trading under the terms of the AfCFTA Agreement, scheduled for January 2021.”
The AfCFTA is not just a trade agreement; it is also an instrument for development intended to lift 100 million Africans out of poverty by 2035, Mr. Mene said at the launch.
Appropriately, contributors canvass the involvement of women and young people in the AfCFTA–as participants and as beneficiaries.
“The AfCFTA is an opportunity to tap the talents of young Africans and women to ensure inclusive benefits,” noted Mene.
Edem Adzogenu, co-Chair of AfroChampions, a platform that promotes African companies, warns in his contribution: “The AfCFTA is one of the greatest achievements of 21st century Africa, but it will fail unless it is inclusive–in design and implementation.”
The case for women and youth as key stakeholders in Africa’s economic development is easy to make: Africa’s informal sector accounts for 85% of the continent’s total economic activity; and while women account for 90% of the labour force in the informal sector, they constitute 70% of informal traders.
Also, 60% of Africa’s population is under the age of 25, making Africa the world’s youngest continent.
While a main goal of AfCFTA is a dramatic increase in intra-African trade, Ahunna Eziakonwa, Assistant Secretary-General and Director of UNDP’s Regional Bureau for Africa, described the current intra-trade level of 18% “an indictment.”
One of the consequences of such low-level intra-African trade is a loss of good-paying jobs, Ms. Eziakonwa emphasized, in her opening statement at the launch.
Women must be deeply engaged in cross-border trade, they must have access to finance, production network, and markets, she maintained. The UNDP, Ms. Eziakonwa added, was working to help women access virtual markets and participate in e-commerce.
Godwin Benson, CEO of Tuteria, an online learning platform in Nigeria, is one of the young entrepreneurs who contributed to the report.
Benson explains his limited success in expanding his business into other markets on the continent and provides a to-do list to improve trade in services across borders.
First is the need to understand the “needs and nuances of other African markets” so that products and services are better tailored to consumers in various countries, he writes.
Second is the need to engage in strategic partnerships to facilitate access to foreign markets.
Third, he proposes a seamless, cross-border payment system. “It should be easy for customers in Egypt or Rwanda to pay a business in Nigeria… Without seamless intra-African payments, businesses like Tuteria, especially those run by young entrepreneurs, may not be able to trade across the continent.”
Lastly, Mr. Benson recommends, “It should be easy and affordable for a Kenyan business to register and commence operations in Nigeria, and vice versa. It would be preferable if this process could be completed online.”
The Coordinator of the African Trade Policy Centre at the UN Economic Commission for Africa, David Luke, writes that the AfCFTA could drive post-pandemic recovery and facilitate “broad-based, inclusive growth, absorbing Africa’s youth in productive activities, and enhancing gender equality.”
Relying on World Bank analysis, Mr. Luke stresses that implementations of the AfCFTA as well as the Trade Facilitation Agreement of the World Trade Organisation “could lead to as much as a 10% increase in wages and contribute to closing the gender wage gap due to larger increases for unskilled workers and women.”
He anticipates that agriculture and agro-food processing will generate good-paying jobs for women who constitute about 50% of the labour force in those sectors. Women will also benefit from jobs created in education, health, and tertiary services.
Luke further offers that while women engaging in informal cross-border trade are vulnerable to harassment and violence, the AfCFTA could mitigate such challenges when informal operations are formalized.
Game-changer for women
Potentially, increases in jobs in manufacturing, agribusiness and others could be a game-changer for millions of African women and youth, concurs Angela Lusigi, UNDP’s Resident Representative in Ghana, in her contribution to the report.
To reap the full benefits of AfCFTA, Ms. Lusigi contends that women traders must have access to information and training opportunities on trade networks and that their voices must be heard in “AfCFTA negotiations, policymaking and decision-making.”
Facilitating cross-border investment, protecting intellectual property rights, collaborating on customs and taxation, and implementing trade facilitation will ensure more equitable and sustainable opportunities, which is critical to the effectiveness of the ongoing liberalization of the services trade.
She adds that leveraging Africa’s rich human assets in the AfCFTA requires reflecting the needs of women and youth in the legal and technical frameworks that are being established.
“Facilitating cross-border investment, protecting intellectual property rights, collaborating on customs and taxation, and implementing trade facilitation” will ensure “more equitable and sustainable opportunities, which is critical to the effectiveness of the ongoing liberalization of the services trade,” Ms. Lusigi posits.
Luke adds that, “The liberalized continental market provided by the AfCFTA presents an opportunity for local production of pharmaceutical products and healthcare supplies at scale.”
He laments the devastating effects of climate change on African economies, currently and in the future, stating that, for example, in a high-warming scenario, Sudan and Tanzania could lose nearly 18.6 per cent of their GDP by 2050.
Still, he maintains that the global shift toward clean energy could “leave Africa stranded with devalued fossil fuel assets… In limiting global warming to 2°C, as much as 26 per cent, 34 per cent and 90 per cent of the gas, oil and coal reserves, respectively, of Africa could be left unused.”
Nevertheless, losses from untapped fossil fuel reserves could be offset by opportunities in the value chains around green minerals.
For example, Mr. Luke writes, “The Democratic Republic of the Congo has 47 per cent of the world’s Cobalt (needed for making batteries) and Namibia and Zimbabwe have 100 per cent of the world’s Caesium reserves and 89% of the world’s Rubidium reserves (both used in mobile-cellular global positioning systems).
“Indeed, 42 of the 63 elements used by low-carbon technologies and in the Industrial Revolution (IR) 4.0 are found in Africa,” underscoring that the continent sits atop a treasure of green opportunities.
“The AfCFTA could be one good way to bring back perspective, positing the prospect of recovery in home-grown solutions by giving exports a boost and, in doing so, empowering all participants in cross-border trade, especially women and youth,” comments Ms. Eziakonwa, in her foreword to the report.
For more information on COVID-19, visit www.un.org/coronavirus12 Service sector. The report also highlights the strangulating effects of COVID-19 on the African economy and accentuates opportunities for sustainable recovery.