GGDA IN TUNE WITH THE AFRICAN CONTINENTAL FREE TRADE AGREEMENTGGDA Web Admin
Since the advent of the Covid-19 pandemic, the global economy continues to battle the pandemic’s negative economic consequences, especially in Africa. Thus, the creation of the African Continental Free Trade Agreement (AFCFTA) has been highly welcomed across Africa.
The AFCFTA which seeks to make Africa a more competitive continent is creating the largest free trade area since the formation of the World Trade Organisation.
The pact connects 1.3 billion people across 55 countries on the African continent, with a combined gross domestic product (GDP) valued at US$3.4 trillion. In essence, the agreement enables African countries to diversify their exports, accelerate growth, and attract foreign direct investment (FDI).
The Gauteng Growth and Development Agency (GGDA) is fully embracing the potential opportunities and impact of the AFCFTA on the Gauteng economy and as a result, is developing and implementing the AFCFTA Gauteng Roadmap.
If utilised to its maximum, the AFCFTA has the potential to lift 30 million people out of extreme poverty, boost Africa’s income by $450 billion by 2035, while adding $76 billion to the income of the rest of the world.
The AFCFTA Gauteng Roadmap will assist Gauteng companies to increase trade and expand operations into the rest of the Continent thus contributing to the AFCFTA goals. A case in point on the work that the GGDA has already completed in advancing AFCFTA objectives relates to the expanding Cocoa industry in Ghana.
The Ghana Cocoa industry makes up 21% of the cocoa market share of Western Africa and has created 800 000 jobs for farmers in the country. The west African country exports 10% of its chocolate to Gauteng, and this is expected to grow.
The GGDA facilitated the collaboration between Ghanaian cocoa manufacturers and South African companies that were at the end of the processing chain. The finished product is now being sold by South African manufacturers to the rest of the world. The GGDA continues to play an active role in implementing its regional approach which focuses on countries that are investor-friendly and that facilitate access to the surrounding countries that are part of the respective AFCFTA regional blocks.
The GGDA is also constantly identifying infrastructure opportunities for Gauteng companies that seek to expand their businesses to the rest of the continent and provides training and support to get them export-ready. It is expected that the full implementation of AFCFTA will see the reduction of administrative bottlenecks and simplify customs procedures.
According to the United Nation’s Economic Commission for Africa (UNECA), the AFCFTA has the potential to boost intra-African trade by 52.3% through eliminating import duties. The Agreement will drive $292 billion of the $450 billion in potential income gains. However, critics say that for the AFCFTA to achieve its full potential, significant policy reforms and effective trade facilitation will be of paramount importance. Emphasis on successful implementation of the agreement including careful monitoring of its impacts on all Africans regardless of gender, age, occupation, and income, is said to be key in determining the eventual success of the AFCFTA.
The AFCFTA is not only going to benefit those in business, but it will also improve the lives of ordinary Africans. The AFCFTA’s ambitious but attainable goals align with the UN Sustainable Development Goals (SDGs). These were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.
The AFCFTA secretariat forecasts the eradication of poverty as follows in the region:
• West Africa:12 million people.
• Central Africa would see a decline of 9.3 million.
• Eastern Africa would see a decline of 4.8 million.
• Southern Africa would see a decline of 3.9 million.
Furthermore, countries with the highest poverty rates would see the biggest declines in poverty:
• In Guinea-Bissau, the poverty rate would decline from 37.9 per cent to 27.7 per cent.
• In Mali, the poverty rate would decline from 14.4 per cent to 6.8 per cent.
• In Togo, the poverty rate would decline from 24.1 per cent to 16.9 per cent.
The GGDA is actively involved in improving the Gauteng Province’s ability to attract and retain investments (FDI and DDI) and enhance the export capability, resulting in economic growth that contributes to business success, job creation and poverty reduction in the province.
At a webinar hosted earlier this year and themed “unlocking Africa’s possibilities through the AFCFTA,” the Group Chief Executive Officer of GGDA, Ms Mosa Tshabalala said “Over the last six years, the Gauteng region has exported goods and services to the African region to the value of six trillion Rand. Thus, the GGDA constantly identifies and facilitates trade between South African and African countries. Even small countries are welcomed. We look for opportunities to leverage off each other’s common sectors and needs.”