07 Dec 2023

The African Continental Free Trade Area (AfCFTA) aspiration of a single market of goods and services on the continent is an exciting development that could transform the economic trajectory of the continent.

The continent has a wealth of mineral resources and human capital, but intra-African trade and industrial exports to the rest of the world remained low, which provides room for large scale economic growth potential.

These were the views expressed by Mr Keletsositse Olebile, the Chief Executive Officer (CEO), of the Botswana Investment and Trade Centre (BITC), during a debate on the Faces of An Integrated African Market.

He called for gradual, carefully managed integration, leveraging on the experience of the European Union, where certain criteria were set on some key economic fundamentals for member states, which led to better convergence in the long term.

Mr Olebile said Botswana had ensured that it has its own macroeconomic fundamentals to ensure national stability, and rules such as not permitting national debt to exceed a certain percentage of gross domestic product (GDP).

Another panelist, Mr Admassu Tadesse, the Group President and Managing Director of the Trade abd Development Bank Group, said the banking and telecommunications sectors have displayed how business could be conducted across the continent.

He cited South Africa as a continental industrial powerhouse with large multinational corporations that are domiciled there with a footprint across other countries in Africa.

Mr Tadesse said there were companies from other parts of Africa, such as Kenya in East Africa, which had also proved that successful trans-national business by African companies was feasible.

He said having a single currency would give greater certainty on intra-African trade, citing the example of the Rand Monetary Area, where the currencies of Namibia, Lesotho and Eswatini are pegged to the South African rand, a cross border traders do not have to worry about exchange rates.

But Mr Tadesse stressed that this had to be a gradual process that should start in the five regions of the continent, using innovative methods of merging currencies or taking advantage of existing stable currencies.

Ms Phyllis Wakiaga from Kenya, the Senior Advisor- Global Lead, Industry and Commerce at the Tony Blair Institute said there was a need for an African Industrial Policy for a structural change of the Trade dynamics.

She said this would have to factor in the value addition to raw materials, taking advantage of the demographic dividend of a youthful energetic population and developing energy transition through production methods that do not harm the environment.

Ms Wakiaga said the move towards the fourth industrial revolution also offered Africa an opportunity to be innovative and have global re-balancing to ensure Africa is no longer heavily reliant on the developed states of the Global North.

She said Africa needs to take advantage of its large natural resource endowment to boost energy efficiency, and take advantage of climate financing to boost a green economy. Ends