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Let’s use AfCFTA to reap from pandemic

Wednesday July 15 2020
ngatia

African heads of states pose for a photo on March 21, 2018 before the signing the agreement establishing the African Continental Free Trade Area. PHOTO | FILE | NATION MEDIA GROUP

By RICHARD NGATIA

With the growing inter-regional trade co-operation within and across continents, innumerable opportunities to deepen economic and commercial ties between and amongst middle-income and advanced economies have been opened up.

As the African Growth and Opportunity Act (Agoa) lapses in 2025, the need to prepare well in advance for a transition to complement the African Continental Free Trade Area (AfCFTA), to which Kenya is a signatory, cannot be gainsaid.

Although commencement and operationalisation of AfCFTA has been delayed from July 1 due to the threat posed by Covid-19, all efforts should be made to use post-pandemic period as best implementation phase.

In these unprecedented times, every country is experiencing increased slowdown in all sectors with a reciprocal decline of imports and exports in a largely interdependent global economy informing trickle-down effects in all production and value addition chains.

No doubt, many African countries have started realising a substantial decline in a number of areas — notably; food supply, textile, horticulture, tourism and hospitality industries, to mention a few.

The pandemic poses a risk to the implementation and vision of the AfCFTA. But the reverse could also be true if market integration by African leaders with the support of the private sector and business organisations could turn this into an opportunity with stronger collaboration and specific policies are mooted for post-Covid-19 pandemic.

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POST-COVID-19 RECOVERY

This would be important in restarting businesses beyond the pandemic in order to contribute to the post Covid-19 recovery.

Inevitably, common joint policies should and must be mooted before the continental population gets to a worse situation. This can be achieved through mutual cooperation and collaboration, particularly in the post-Covid-19 pandemic period.

And the most viable game changer is taking advantage of the AfCFTA. In Kenya, just like many other parts of the world, the public and private sectors have been negatively affected by the pandemic, resulting in massive job losses, inability to meet basic needs, including food and rent, and many others unable to sustain their social life.

Undeniably so, in the recent past, the private sector has witnessed a shift in production in the various value chains that the local businesses are involved in. For instance, just as one of the opportunities, many textile firms have seen a change from the making of garments to face masks and personal protective equipment to meet the local health needs. The business community ought to identify opportunities to promote intra-Africa trade in the various sectors and that can work best through the AfCFTA framework.

INTRA-AFRICA TRADE

Integration for Africa is the only way to reposition the continent as a ready market through intra-Africa trade. This means further trade liberalisation, removal of trade barriers and better trade practices amongst all African countries.

The business community is ready and willing to support respective governments and political leadership to realise this. Effectively, the respective governments and business associations will have their policies aligned create mutually supportive synergy.

Indeed, no country is self-sufficient, making cooperation and collaboration an unevitable factor at a time the world has become a global village.

The inevitable high market integration at this age of globalisation is bound to present unlimited investment opportunities, technology transfer, foreign direct investments (FDIs) flow of labour and capital, just to mention a few.

Additionally, the trade sector would certainly register increased number of directly and indirectly employed people through exports and imports.

CREATE ENTREPRENEURIAL COMMUNITY

Accordingly, we must shift our focus to creating a wide entrepreneurial community by strengthening human resource capacity in the region, improve the investor programmes — that is, market size, trade facilitation and progressive regulatory framework, sound infrastructure and supply of talented human capital among others.

AfCFTA will eliminate tariffs, help to address behind-the-border barriers that would otherwise impede the flow of goods and services and encourage investments and improve the rules affecting trade.

There is a need for structured consultations with the private sector, at respective country levels, to improve coordination with government agencies to increase its readiness.


Mr Ngatia is the president of the Kenya National Chamber of Commerce and Industry (KNCCI) and chairman of the Great Lakes Region (GLR)       Private Sector Forum (PSF).

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