A case for Smart African Continental Free Trade Area

When the sun sets on Kigali today, March 21, 2018, it will signal a new dawn for Africa. A new chapter in our continent’s history that will be remembered by future generations as the onset of Africa’s economic liberation struggle.

When the sun sets on Kigali today, March 21, 2018, it will signal a new dawn for Africa. A new chapter in our continent’s history that will be remembered by future generations as the onset of Africa’s economic liberation struggle.

The imminent signing of the African Continental Free Trade Area was described by President Paul Kagame and many other speakers at the African Continental Free Trade Area (CFTA) Business Forum yesterday, as the best thing that has happened to Africa in the last five decades. In his closing line, however, President Kagame decried the slow pace at which we, Africans, are embracing the tremendous opportunities that are associated with Africa’s integration.

He said that we seem to enjoy problems while solutions are also around. The purpose of this piece is to call on Africa, to embrace one such solution that will solve the “speed” problem – Digital. The internet (of people and things), big data analytics, artificial intelligence, Blockchain, autonomous cars, drones, robotics, 3D printing, biotechnology, quantum computing, etc have the potential of transforming governments and businesses at an exponential rate. Provided that we embrace the digital revolution instead of pushing back, the CFTA won’t be a dream to be realised by the next generation as it was often said. We can deliver it and enjoy its fruits while we are still with this generation of leaders that has taken up the challenge left by Africa’s forefathers who won the political liberation during the 60ies.

As I sat in the Business Forum, I could hear very loudly 4 Pillars (or 4Ps) that are going to be critical to achieve the CFTA vision:

–  Purpose – to achieve Africa’s economic independence and live with the world in healthy interdependence.

–  People – starting with Heads of State and Government, and other leaders who make policies to members of our communities, youth and women who CFTA is designed for.

–  Partnership – between governments, the private sector, academia, civil society and communities, especially women and our very innovative and creative youth.

–  Profits – option for business and trade rather than aid or charity to meet Africa’s development challenges and tap into her limitless opportunities.

But one important P – Platforms was not emphasised enough. I submit that five categories of continental digital platforms need to be put in place for us to accelerate the CFTA journey.

1) Digital infrastructure: A lot of investment has already honed into building submarine and terrestrial optic fiberbackbones, 3G and 4G networks, satellite, digital TV migration, data centers, traffic exchange, etc. While Africa has the world’s largest digital divide with 43 per cent mobile penetration and 26 per cent internet penetration (GSMA, 2016), it is also the world’s fastest growing telecom market and it’s a matter of time before these divides are closed. Smart Africa estimates that Africa loses US$3.5 billion every year through routing our voice calls through Europe. A lot more is lost to roaming charges among African countries. The revenue loss is compounded by security and privacy risks that affect Africa’s sovereignty. Smart Africa (www.smartafrica.org) has started tackling those challenges by championing the One Africa Network initiative to remove roaming and the Africa Regional Platform for Traffic Exchange and Financial Settlement Platform project (ARTEF) to keep Africa’s traffic in Africa. The private sector has loudly expressed that the money to roll out the missing infrastructure and interconnect those that we already have is not the issue. The problem has been the fragmented market, policy and regulatory environment in which they do business. The CFTA is the answer.

2) Content – a case for a Pan-African content exchange platform: Africa needs to build information, education, and entertainment platforms, able to give the continent a strong voice to tell her own story and express her culture. If we don’t do it, others will continue to do it on and on their own terms. In partnership with African Union of Broadcasting, Smart Africa will soon embark on building a continental content exchange platform that will be a significant contribution to meet the challenge.

3) Digital financial platforms – a case for a Pan-African digital currency: Africa has led innovation in mobile financial inclusion globally. However, with a lower penetration of smart phones, Asia, with its massive Chinese and Indian markets, have since taken the lead. Today, Blockchain and the lack of legacy payment infrastructure present a new opportunity to lead with a pan-African digital currency. If we don’t do it someone else from anywhere in the world will do it and our generation Z, the largest workforce in the world by 2034, will adopt it without asking their governments’ or parents’ permission. No one came here to ask our opinion on whether WhatsApp or Facebook or Twitter was good for us. They just created these tools and all our youth and on them. It goes without saying that those who own those platforms are the ones who understand best where we are, what we think and eat, what we watch and buy. They are even able to predict events before they happen, let alone to foment them. If we don’t create this currency someone will create it and we will again be at their mercy. A cashless continent is within our reach; we just need to defy the traditional wisdom that you can either move fast but alone and slow but together to reach far. With digital, we can do both, as often said by President Kagame.

4) Digital trading and trade facilitation platforms: Many countries have built great trading and trade facilitation platforms which unfortunately work in silos and are notoriously costly and difficult to integrate. For example, electronic single window and cargo-tracking platforms in East Africa have boosted trade by reducing the time and cost of moving and clearing goods across borders. But what we need now is an integrated continental e-single window and continental trading platforms. If we don’t do it fast, an Alibaba or Amazon won’t take long to come by and suddenly take over and hold more data on what Africa imports, exports, eats, reads, learns, plays and watches and, therefore, what Africa pays for. Africa needs to define quality standards for goods “made in Africa” and /or implement mutual recognition of standards and rules of origin. All this can be done transparently and efficiently online and on your smartphone. For the first time, Africa’s trade can be paperless.

5) Digital identity platforms: Whether its travel, banking, trade or healthcare services across borders, identity is a key requirement. We won’t build a fully integrated digital market if market participants can’t be securely and efficiently identified. Efforts to build a continental digital identification scheme have met concerns about highly sensitive and classified information. The reality however is that a lot of personal and private citizen data is already out there on hostile platforms who don’t care about African’s privacy. Today, those platforms are the only ones that hold continental-wide ID data about Africans, while each country holds on their citizen data bases in silos, with little commercial value at scale. The Sustainable Development Goals Center for Africa is championing this cause and deserves all our support.

There will be other types of platforms to valorise Africa’s natural and human capital. Smart Africa is uniquely positioned to lead the implementation of those platforms, in partnership with Governments and the Private Sector and turn our CFTA into a Smart CFTA.

In the follow up piece, I will discuss the 10Ts (Connect, Educate, Promote, Demostrate, Protect, Invest, Innovate, Collaborate, Regulate, and Quit) that constitute a roadmap on how to realise the vision of a Smart CFTA.

The writer is the Special Advisor of Smart Africa and Former Minister for Youth and ICT of Rwanda.

The views expressed in this article are of the author.

 

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