The African Continental Free Trade Area is making great strides as it launches the Private Sector Action Plan together with the World Economic Forum. The project is made up of over 140 global companies. The Private Sector Action Plan arrives at a time when the African Continental Free Trade Secretariat faces harsh funding challenges for the successful implementation of the project. In other words, positioning the trade project into the new world economic order is crucial for its survival and long-standing success.
The plan focuses on five economic value chains: agriculture and agro-processing, transport and logistics, pharmaceuticals, and automotive.
First, the report indicates that the agriculture value chain remains one of the greatest economic development sectors in Africa. Agriculture and agro-processing: Intra-African trade in agriculture is expected to increase by 574% by 2030, if tariffs are eliminated under the AfCFTA.
Second, to fully unlock the opportunities presented by the African Continental Free Trade Area, the transport and logistics sectors need to transform and develop. Transport and logistics: The AfCFTA is projected to increase intra-African trade demand by 28%, with demand for almost 2 million trucks, 100,000 rail wagons, 250 aircraft, and more than 100 vessels by 2030.
Third, the pharmaceutical sector and the entire medical industry, is to be advanced and developed across the African continent.
Finally, there is an urgent need to accelerate the development of the automotive industry, which represents an enormous market since the implementation of the African Continental Free Trade Area. The long-term goal here is to help the African continent become a leader in the delivery and trade of electric vehicles (EVs).
The automotive industry on the continent is taking off due to the AfCFTA, with the potential for more countries to become involved in the automotive value chain. The AfCFTA and global trends are opening new opportunities, especially to move more value-added activities to the continent and for the continent to become a leader in the production of electric vehicles (EVs). To ensure that local value addition is at the forefront, the Forum is working with its partners to reach a goal of manufacturing 4-5 million vehicles by 2035 and increasing manufacturing plants across the continent.
Author The Author
Jean Narcisse Djaha, Ph.D., is the Founding President and Chairman of the African Council on Foreign Relations. He is guided by Romans 8:30” And those he predestined, he also called; those he called, he also justified; those he justified, he also glorified”.
References
Agarwal, P. et al., The African Continental Free Trade Area and the Automotive Value Chain, Overseas Development Institute, 14 July 2022: https://odi.org/en/publications/the-afcfta-and-the-automotive-value-chain/
AfCFTA Secretariat, AfCFTA Private Sector Engagement Strategy, 2022–2032, November 2021.
United Nations Economic Commission for Africa (UNECA) and Konrad Adenauer Stiftung (KAS Office Ethiopia/AU), Policy Brief: Private sector as the backbone of the AfCTA implementation, https://www.kas.de/documents/13332971/17139048/Policy+brief+-+Private+sector+as+%20 the+backbone+of+the+AfCFTA+implementation.pdf/09f35ba4-326f-a283-bf48- 5ee3965a1661?t=1655293939245
