Africa Business Council (AFBC) has called for a coordinated effort and actions that improve intra-African trade and effectively implement the African Continental Free Trade Area.
The council was established in line with AU assembly decision to boost intra-African trade and fast-tracking the establishment of African Continental Free Trade Area (AfCFTA).
Africa Business Council President Amany Asfou told ENA that AFCFTA needs crucial actions, business climate, incentives and promotion of African products for the private sector to play an active role in increasing intra-Africa trade.
The private sector needs empowerment, finance, policy, overall infrastructure connectivity, including transport and technological, and public-private partnership to effectively implement AFCFTA and increase intra-African trade volume, which is currently at 16 percent in the continent, he added.
“AfCFTA is the flagship program of Africa, but its implementation really needs all the coordinated efforts because the implementing actor is the private sector. So in order to increase our inter Africa trade, which is currently less than 16 percent among us compared to Europe’s 60 percent, we need crucial action, business climate, incentives and promoting our African products,” Amany said.
According to her, the council has a strategy with three major pillars that will contribute to the effective private sector participation in the successful implementation of the African Continental Free Trade Area.
Strengthening the private sector, policy advocacy and product development are the three pillars of the strategy in place to help effectively implement intra-Africa trade under AfCFTA.
Noting private sector strengthening, including to Small and Medium Enterprises (SMEs), women and youth by building capacity, is necessary to make them competent traders, the president said policy advocacy that mainly focuses on giving legislation space to the private sector in government procurements and the product development are crucial.
“We need legislation for empowering the African private sector. One of the policies we are promoting is about having at least 40 percent of all government procurement across Africa for the African private sector, including SMEs, women and youth. This is how we up scale the SMEs. We should give them space so that they meet the requirement of the procurement.”
Financial inclusion is, on the other hand, needed because for those African SMEs, youth entrepreneurs and innovators not conventional banks but innovative tools and tailored financial products empower and finance them.
Amany also noted that increasing internet access to reach 75 percent of the population could create 44 million jobs and digital technologies like Artificial Intelligence which is estimated to add about 5.6 percent or 1.2 trillion to the African GDP.
“We need investment in infrastructure, energy, roads, aviation, marine and railways so that we have a connected Africa and that the cost of the transfer of products goes down. We also need investment in the digital economy because now even with coffee, we have seen how very important digitalization is.”
In January 2022, Ethiopia sold 11,200 bags of coffee online within a second and earned 72,000 USD, showcasing the importance of digital economy and e-commerce in Africa’s trade.
Africa’s internet economy has the potential to reach 180 billion USD by 2025, accounting for 5.2 percent of the continent’s GDP, it was learned.
Amany further pointed out that businesses in Africa has to strengthen linkages because there is lack of business linkages in the African continent.
The president also underlined the need for public-private partnerships in the process of implementing AfCFTA.