The Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat, Wamkele Mene, has said that Africa must use its vast natural resources for the benefit of its countries and people in order to foster the development of the continent.
He believes Africa’s natural resources must be used to strengthen intra-Africa trade and economic integration, to diversify economies and industrialise, to build continental, regional and country infrastructure and to invest in education, health, science and innovation.
Mr Mene noted that the development must be inclusive, and must “ensure people’s participation in their own development.”
Referring to studies by the Mo Ibrahim Foundation, he indicated that two in every three Africans rely on subsistence farming for food and basic livelihoods while nearly half (600 million people) still do not have access to electricity.
“With an average GDP per capita of $2,000 (compared to the global average of $10,500) and a population set to rise from 1.3 billion to 4 billion in just 80 years, Africa’s economy needs to be 16 times bigger than it is today to elevate the quality of life of its citizens to match the global average,” he said.
“Additionally, climate shocks threaten to derail Africa’s development gains. Estimates show that adapting to climate change could cost the continent $50 billion yearly by 2050. Furthermore, losses to GDP could be in excess of 20 percent in extreme-temperature scenarios,” he added.
The AfCFTA boss said this when he delivered the keynote address on the occasion of the 8th Annual London School of Economics (LSE) Africa Summit in the UK over the weekend.
Mr Mene noted that the continent is reshaping her small and fragmented markets to create one integrated market with large economies of scale and scope through the AfCFTA.
“As promising and hopeful as these projections are, as Africans we shall have to take concrete steps to ensure that these promising projections do become a reality. Among other actions, we have to expedite the implementation of trade facilitation measures that are foreseen in the AfCFTA Agreement in areas such as soft infrastructure at our borders,” he said.
He stated that AfCFTA covers other trade-related problems that are important to foreign direct investment strategies and operations, such as trade in services, competition policy, intellectual property rights, investment, dispute settlement, and digital commerce, in addition to goods trade.
According to him, the completion of all of these protocols will make a significant contribution to Africa’s economic integration.
“With these additional protocols, we are further transforming the continent by removing physical and commercial barriers that have hitherto hindered trade among our countries. The continent is, therefore, poised to develop a harmonised market space which will in turn promote the development of regional value chains that will be linked competitively to global value chains,” he said.
“We need to dismantle this colonial legacy of exporting primary products, our raw natural resources, if we are to achieve the aspirations of Agenda 2063,” he added.
Mr Mene noted that his outfit recognises the pivotal role of the private sector to deliver on its mandate, and has, therefore, launched an inclusive private sector strategy that identifies the main barriers to trade and production on the continent.
“The strategy focuses on four initial priority sectors or value chains, namely agro-processing, automotive, pharmaceuticals, and transportation and logistics, based on the potential for import substitution and existing production capabilities on the continent,” he explained.
“For each value chain, the Secretariat has considered the feasibility of addressing barriers to trade and production in the short-term, and the potential to drive economic growth, employment, inclusivity, for example, for women, youth, and SMEs, and sustainability,” he further said.
“The Secretariat has further designed interventions in these value-chains with the potential to add over US$11 billion annually in production and over US$5 billion annually in intra-Africa trade – more than double the current contribution of these value-chains to intra-Africa trade. This increase in production and trade could create over 700,000 jobs, 55% of which will be for women and youth,” he continued.
Additionally, Mr Mene said that beyond trade integration, closing the infrastructural gaps in the continent is another priority area to be considered.
“In most dimensions of infrastructure performance, Sub-Saharan Africa ranks at the bottom of all developing regions, hence the strategic emphasis on infrastructure,” he said.
“Also, for intra-Africa trade to really flourish, we need to be interconnected. And for Africa to be interconnected, it is critical to look at how we commute, cross-border railways, air routes, water routes, and roads,” he said.
“We need to look at all those infrastructures to speed up implementation of the African Continental Free Trade Area, as many of Africa’s development challenges require cross-border solutions,” Mr Mene added.