Members of Africa’s private sector are upbeat that the signing of the Continental Free African Trade Area agreement could present an opportunity for growth.
They say that it will address a series of challenges which have for long held them back from growth as well as increased their cost of operations.
Most argue that at the moment the continent has not taken advantage of its population due fragmentation.
Zimbabwean business magnate Strive Masiyiwa – whose company Econet has footprint in 29 countries said that though Africa has a population of 1.2 billion, few if any enterprises have been able to take advantage of that.
“We are 1.2 billion people but we do not have a market of 1.2 billion people. We do not see the opportunity of that market size. This is reflected by the level of intra-Africa trade at less than 17 per cent when other regions are at over 68 per cent. We are fragmented making it hard to make a business case,” he said.
Other benefits experts cite are that businesses will be more competitive as they will have access to a wider pool of inputs including skills.
Others say that this could see an uptake of African products into the continental market as opposed to currently when a majority of products are foreign sourced.
Tonye Cole, the Co-founder and Group Executive Director Sahara Group, Nigeria, said it could see African enterprises more including in national development in their respective countries.
The implementation of the agreement will also provide the private sector a better opportunity to play their role in national development processes through job creation and production.
Vera Songwe, the Executive Secretary of the United Nations Economic Commission in Africa, said that the agreement will create many new trade opportunities in industrial products, rather than the commodities on which Africa’s economies have become too dependent.
“We are witnessing a substantial change in paradigm on the continent, Africa can produce, which means that Africa can employ its youth and young women,” she said.
Songwe said that going forward, the continent is likely to see African businesses benefit from economies of scale, and create supply chains that will allow the continent to reduce its import bills, especially for industrial inputs.
The success of the agreement could also increase the involvement of the private sector going forward in formulation and negotiation of trade deals as opposed to when they were only informed on the agreements.
The African Continental Free Trade Area is expected to create a single market between the 55 African countries and a population of 1.2 billion making it the world’s largest free trade agreement.