BUSINESS REPORTER
The AfCFTA Secretariat has launched an engagement plan targeting the private sector as it seeks to build regional value chains key for the success of Africa’s single market, secretary general Wamkele Mene has said.
There has been low contribution of regional value chains on the continent, accounting for 2.7% of Africa’s total value chain participation in 2019, compared to 26.4% in Latin America and the Caribbean and 42.9% in developing Asia, according to the a recent report, Africa’s Development Dynamics.
The African Continental Free Trade Area (AfCFTA), which came into force in January 2021, is touted as Africa’s Marshall Plan and will lift 100m Africans out of poverty and contribute US$450bn to Africa’s GDP by 2035, according to a report by the World Bank.
In his opening remarks at the TICAD8 side event on Monday, Mene said the AfCFTA Private Sector Engagement plan will initially focus on four priority value chains—agro-processing, automotive, pharmaceuticals, and transportation and logistics, based on the potential for import substitution and existing production capabilities on the continent.
“These four initial priority value chains are the quick wins that we are prioritising for the implementation of the AfCFTA to be successful and reduce Africa’s over-dependence on imports and stimulate intra-Africa trade and investments,” Mene said.
Sectors identified for future value chains include horticulture, textiles, financial services, telecommunications, and Information technology, he said.
“Since these initiatives map out concrete regional value chains available under the AfCFTA, they are expected to lead to a plethora of opportunities and guide investors’ thinking and actions in the future,” Mene said, adding that tapping into African value chains holds significant potential for investors.
“At the same time, strengthening regional value chains will foster sustainable growth in the continent,” he said.
Africa’s single market will be pivoted on regional economic communities (REC), which Mene said have made steady progress on Africa’s integration agenda.
Some RECs have made good progress in infrastructure, others have advanced either trade liberalisation and facilitation, or the free movement of people, and peace and security, respectively, he said.
“The ambition of the AfCFTA is, therefore, to build on the accomplishments of Africa’s RECs and further deepen economic integration in the continent as the foundation for a resilient and prosperous future. Ultimately, the African Union strives to integrate all eight recognised RECs into a self-reliant African Continental Free Trade Area,” Mene said.
The AfCFTA is the biggest trading bloc in the world with a population of over 1.3bn and combined GDP of $3.4 trillion.
All but one of the 55 African countries have signed the AfCTA agreement and 43 have deposited instruments of ratification.
