By Anwar Zibaoui, General Coordinator of ASCAME. Article translated from Spanish to English, originally posted in La Vanguardia (print, 14/05/2023).
Rich in resources and cultures, Africa has the potential for a bright future if it harnesses the power of trade. The path began in 2021, with the entry into force of the African Continental Free Trade Area (AfCFTA). Since then, African states are cooperating more closely.
Unlocking trade in the region provides opportunities for African people to live sustainably by opening up new markets for their products.
The potential of the single market is considerable and integration is key to development. Africa’s internal trade will increase from 18% to 25% in the next three years. In Europe, 64% of exports are within the EU, in Asia the rate is 59%. The free trade area could transform the continent’s economy and its relationship with the rest of the world. With a current combined GDP of 3.4 trillion euros, the African economy could almost double in size to 6.7 trillion euros by 2030 and reach a staggering 16.12 trillion euros by 2050.
If AfCFTA succeeds in its ambitions, it will create a unique opportunity for people and businesses. By joining forces, Africa becomes the world’s largest exporter of oil, gold, copper, cobalt and other commodities. However, if it continues with its current fragmentation, the continent will continue on its path to become the world’s largest exporter of migrants and the ideal scenario for the rise of terrorism.
Africa must redesign its economic relationship both with its historical partners, Europe and the US, and with new partners in Asia, and look for solid alternatives to the financing that now relies mainly on public aid and international cooperation.
One of the challenges is to attract more international investment and to finance their development.
There are many success and injury stories that can serve as examples. However, companies still view “African risk” in a distorted way. Instead of choosing the best priorities for growth, and valuing it as a geographical expansion, cultural differences are amplified, only failures are cited and problems magnified. Yet the returns on investment in Africa are demonstrably high, even if they take longer.
All over Africa there is talent and interesting proposals. Infrastructure is being developed that will help local economies and enable trade between states. Other companies are exploring how new technologies and improved agricultural techniques can increase yields, connect small farmers to markets and process food to add value. E-commerce has burst onto the scene and by 2025, revenues from e-commerce will double the level of 2021. Equipping people with skills for this new era, and providing connections through technology and trade, is vital to encourage growth.
Africa can become a trading powerhouse. The challenges are many but the expectations are even greater. We are on the brink of a new frontier, it is only a matter of time. However, the key is for African people to believe it too.