The AU Commissioner for Trade and Industry, Albert Muchanga, was recently hosted by the Association of Ghana Industries (AGI) and explained in depth the vision of creating a single African market.
Some interesting facts were laid bare at the encounter, and among these are that while intra-continental trade among European Union members is reckoned at some 70 percent, North American intra-trade amounts to 54 percent and in Asia it accounts for 51 percent of trade, the African continent boasts only 16 percent intra-continental trade.
A key objective to creating an African single market is to achieve 90 percent tariff liberalisation to facilitate increased volumes of trade in goods.
Commissioner Muchanga told the AGI that the African private sector will be a key driver of the AfCFT since the AU will rely on the investments and entrepreneurial spirit of the African private sector to make AfCFTA deliver tangible benefits to Africans through employment creation and supply of quality goods and services.
He outlined that tariff liberalisation will open new opportunities for value addition and the African private sector can manufacture for the African market and beyond. Secondly, Africa’s growing middle-class of 350 million people is expected to rise to 600 million by 2030 – and we are aware that in a market economy, the middle-class is a source of dynamic consumption which in turn stimulates higher levels of investment and economic growth.
The African private sector currently accounts for 12 percent of investments in Africa, while the Asian private sector accounts for 33 percent. Some potential benefits for businesses is the large size of 1.27 billion consumers offers larger sales volumes when producing to the scale of the market offering opportunities to expand investments.
There will be opportunities for value addition by producing final or intermediate goods and increased productivity offered by competition through trade. There are several others – but suffice to say, these incentives and many more make it imperative for member-states to work toward ratification of this instrument which seeks to create a continental free trade area.
The benefits far outweigh the challenges and taking a bold step now will ensure a better, brighter future for the teeming mass of Africans. We are glad to learn that Ghana has already ratified two AfCFTA instruments. After all, we were pioneers of the African project.