Africa Must Transit to A Manufacturing Hub to Make AfCFTA Effective

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Monday, September 13, 2021 / 10:50 AM / Ottoabasi basiekong for WebTV / Header Image Credit: WebTV

 

The Africa Continental Free Trade Agreement (AfCFTA) will only succeed if the continent transits to a manufacturing hub.


Mr. Charles Robertson, the Chief Global Economist, Renaissance Capital, highlighted this while examining "Prospects for  Growth and Stability in Sub-Saharan Africa Beyond 2021".


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He argued that without manufacturing activities, the AFCFTA will only be helpful to the African region in terms of investments but cannot serve as a gamechanger for the economies.

 

Robertson believed the Free Trade Zones in Africa would benefit when there were manufactured goods to trade with, boosting trade and improving the region's competitiveness.

 

According to him, African exports need value addition to be competitive beyond the raw materials, which has been the case for over four decades.

 

"Africa should explore public-private partnership models and investment opportunities that can transform critical sectors like the electricity sector, to drive a productive economy", Robertson added.

 

Speaking further, he said African economies must prioritize cheap currencies in the short term, electricity in the medium term, and addressing low fertility rates in the long term.


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Arguing further, the economist noted that Sub-Saharan Africa has a rising population, constraining scarce resources and poor infrastructure.

 

He stressed the need for robust reforms and an enabling environment to attract private capital, which can do a lot in tackling the continent's massive infrastructure deficit.

 

On the recent military coup in Guinea, which mirrors a pattern of political instability in Mali and Chad, he acknowledged that low-income countries are vulnerable to crisis.

 

He also added that the Sahel region in Africa was prone to sociopolitical disruption with low literacy levels below 40%, which remains a continental concern.


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