The African Continental Free Trade Area (AfCFTA) is a flagship project of Agenda 2063 of the African Union — Africa’s own development vision. It was approved by the 18th ordinary Session of Assembly of Heads of State and Government, held in Addis Ababa, Ethiopia in January 2012 which adopted the decision to establish a Continental Free Trade Area. This initiative whose immediate implementation would provide quick wins, impact on socioeconomic development and enhance confidence and the commitment of Africans as the owners and drivers of Agenda 2063.
The AfCFTA aims at accelerating intra-African trade and boosting Africa’s trading position in the global market by strengthening Africa’s common voice and policy space in global trade negotiations As of December, 3rd 2020, 36 countries have ratified the AfCFTA agreement. Trading began on 1st January 2021.
55 members will bring together all 55 member states of the African Union covering a market of than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than US$3.4 trillion. The AFCFTA is anticipated to be the world’s largest free trade area since the formation of the World Trade Organisation.
Objectives of the AFCFTA
The general objectives of the AfCFTA are to:
- Create a single market for goods, services, facilitated by movement of persons in order to deepen the economic integration of the African continent and in accordance with the Pan African Vision of “An integrated, prosperous and peaceful Africa” enshrined in Agenda 2063;
- Create a liberalised market for goods and services through successive rounds of negotiations;
- Contribute to the movement of capital and natural persons and facilitate investments building on the initiatives and developments in the State Parties and RECs;
- Lay the foundation for the establishment of a Continental Customs Union at a later stage;
- Promote and attain sustainable and inclusive socio-economic development, gender equality and structural transformation of the State Parties;
- Enhance the competitiveness of the economies of State Parties within the continent and the global market;
- Promote industrial development through diversification and regional value chain development, agricultural development and food security; and
- Resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes.
According to the Economic Commission for Africa (UNECA), the AFCFTA has the potential to boost intra-African trade by 52.3%. This will be made possible by eliminating import duties, and to double this trade, should non-tariff barriers be reduced.
GGDA’s role is to:
- Develop and implement AFCFTA Gauteng Roadmap that will assist Gauteng companies to increase trade with the rest of the continent, expand operations into the rest of the continent
- Implement the regional approach which focuses on countries that are investor friendly will facilitate access to the surrounding countries that are part of the respective regional blocks
- Identify infrastructure opportunities and link them up with GP companies
- Provide selling platforms for GP companies to reach far and wide into the rest of the sub-Saharan continent. These include virtual platforms such as the export portal which has already been implemented in 2020
- Provide Business to business linkages
- Facilitate export support through unblocking of red tapes
- Create an enabling environment for companies to participate in global value chain participation
- Assist companies to be competitive by implementing strategies that will strengthen the role played by GP companies
- Train GP companies to be export ready
The role played by GGDA is key in enhancing regional value chains, growing intra-Africa trade and ultimately increasing trade activities in Gauteng Province.
The Department of Trade, Industry, and Competition (the DTIC) in partnership with Gauteng Growth Development Agency (GGDA), and Constitution Hill hosted Gauteng businesses intending to enter the export industry. The weeklong training took place in February 2021 at Constitution Hill where attendees were introduced to the Global Exporter Passport Programme (GEPP). The GEPP is run by the Department of Trade and industry (the DTIC) to provide training to small, medium, and large enterprises that wish to expand their market reach outside of our borders. The programme is a key component of the National Exporter Development Programme (NEDP), which is a pillar of the Integrated National Export Strategy (INES). It aims to prepare companies to be export-ready and sustainable in export markets.
The training involves frequent export-readiness assessments of participants to ensure the provision of appropriate interventions. The actual training is done in four phases, which include both formal and informal workshops. At the end of the intensive training, SMMEs were able to understand the export cycle, processes, and logistics; develop an export marketing plan; understand specific export markets that they would like to participate in and understand the current issues in the export industry and how to navigate them. One of the companies who received training stated that “the training exceeded their expectations and helped broaden their knowledge where export requirement and regulations are concerned.” They also appreciated the fact that the training included some marketing traits that they can adopt in the export strategies.
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