WEF: Vibrant private sector critical to AfCFTA success - Kagame

There is no better way of advancing the African Continental Free Trade Area (AfCFTA) imperatives than consolidating the public and private sector partnership, President Paul Kagame has said. The Head of State was speaking on Wednesday, January 17, at a round table on mobilizing global business to support the implementation of the AfCFTA, one of the side events during the World Economic Forum (WEF) in Davos, Switzerland. ALSO READ: It's high time African businesses own AfCFTA – official At the roundtable which attracted global political figures and captains of trade and industry, experts pointed out that if the AfCFTA can be used to boost intra-African trade and encourage the formalization of informal trade between African countries, then it can significantly contribute to Africa’s structural sustainable economic transformation. Currently, 54 of the 55 African countries signed the agreement, with 44 ratifying it. If fully implemented, the trade pact has the potential to contribute to the long-overdue industrialization and economic diversification of African countries. “We are happy that the secretariat of the AfCFTA has come together with the World Economic Forum (WEF) to organize this event,” Kagame said. “The very fact of the action plan means a big contribution from the private sector. We look forward to a strong presence and activity by the private sector.” “It helps change the narrative and we must change the narrative by Africa being too risky a continent. I think a full picture and explanation of the situation will come through this collaboration.” ALSO READ: A year of trading under AfCFTA Through the partnership, Kagame said, several priorities can be identified. He pointed to the likes of automotive, agriculture and agro-processing, pharmaceuticals as well as transport and logistics sectors. “These are very key, they are very important in many ways, but we (world leaders) have to do our part in other areas for example in making sure that Africans move freely across borders.” “Unfortunately, sometimes politics gets in the way of very important things like these, so we have to do our part and make sure that this is not the case.” A win-win approach Once fully realized, Kagame said, the return on investment means that everybody wins. “And we should make sure that we work together for this to happen.” Kagame shared Rwanda's context, noting that the government is “trying to play its part, whether it is in the area of making sure that Africans travel to Rwanda freely, and also working priorities such as on pharmaceuticals, logistics among others.” “We hope to see Africans interacting, Rwandans learning from other countries, citizens coming to Rwanda and sharing experiences, and that will strengthen us as a continent.” 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. The round table was held under the theme “Driving Action Under the African Continental Free Trade Area.” Moderated by WEF President Børge Brende, the forum brought together African leaders including President Nana Akufo-Addo of Ghana, Prime Minister Ahmed Hachani of Tunisia, Deputy Prime Minister Demeke Mekonnen of Ethiopia, AfCFTA Secretary-General Wamkele Mene, as well as various representatives of the private sector. Once fully implemented, the AfCFTA agreement is projected to increase real incomes across the African continent by 7 percent or nearly $450 billion. New plan to extend free trade regime In a related development, the AfCFTA Secretariat vowed to extend the recently promulgated free-trade regime to 31 countries following a successful pilot project in seven countries. The AfCFTA is the world’s largest free trade area bringing together the 55 countries of the African Union and eight Regional Economic Communities to create a single continental market with a population of about 1.3 billion people and a combined gross domestic product of approximately $3.4 trillion. Speaking at the WEF, AfCFTA secretary general Wamkele Mene said they developed the routes and the legal construct that enabled a single market to be effective, through private sector participation. He highlighted the launch of the Pan-African Payments and Settlements System (PAPSS) in 2023, which aims to enable payments to overcome currency convertibility that constraints growth in Africa. “So, this year, we intend to accelerate the implementation of the AfCFTA. Last year we had seven countries that took part in a pilot of trading under the rules of the AfCFTA. This year there will be 31 who will be participating in the guided trading initiative, applying the preferential rules of the AfCFTA for trade,” Mene said. “The products that were traded ranged from processed agricultural products to manufactured goods, to services also. The lessons that we learned were that the private sector across the continent is ready to take advantage of the AfCFTA, and governments have to move much faster.” In 2022, the AfCFTA Secretariat selected Rwanda, Cameroon, Egypt, Ghana, Kenya, Mauritius, and Tanzania to participate in the Initiative on Guided Trade trial, which enabled the selected countries to access certain markets at preferential rates for certain products. ALSO READ: What is the AfCFTA Guided Trade Initiative all about? For example, Rwanda was able to trade telephones, textiles, insecticides, pesticides, processed food, and horticulture products. “This year, the intensified efforts will be on the services sector: tourism sector, banking sector, within the framework of this pilot guided trading initiative that we are implementing,” Mene said.

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WEF: Vibrant private sector critical to AfCFTA success - Kagame