The promotion of trade between African countries is critical if the continent is to change the distorted trade relationship that exists between African countries and the rest of the world, says President Cyril Ramaphosa.

The President was speaking at the opening of the Intra-African Trade Fair (IATF) in Durban, KwaZulu-Natal, on Monday.

The week-long event hosted by the South African government, in conjunction with African Export-Import Bank (Afreximbank), provides a platform for linking international buyers, sellers and investors, as well as allowing participants and visitors to profile and share market information and investment opportunities in support of intra-African trade and the economic integration of the continent.

President Ramaphosa said Africa can no longer have a situation where it exports raw materials, only to import finished goods made with those materials.

“We can longer have a situation where the resources of Africa provide employment and add value in other economies, while so many of our people live in poverty and conditions of underdevelopment.

“By promoting trade between African countries, we are strengthening the continent’s industrial base and ensuring that we produce goods for ourselves and each other,” the President said.

President Ramaphosa said the COVID-19 pandemic exposed the frailty of African economies and more importantly, it sent a powerful message to the continent about the dangers of over-reliance on external sources to meet its growing demand for food, medicines and other essential supplies.

“It clearly demonstrated that Africa needs to produce its own food and medicines, to strengthen continental supply chains, and to invest in infrastructure and capacitate African institutions,” he said.

To illustrate the extent of the challenge, the United Nations Economic Commission for Africa estimates that Africa imports about 94% of its pharmaceutical and medicinal needs from outside the continent at an annual cost of US $16 billion.

Accelerating economic growth across Africa

The African Continental Free Trade Area (AfCFTA) has the potential to accelerate economic growth across the continent and create opportunities for entrepreneurs, small and medium enterprises, as well as large corporations to flourish.

President Ramaphosa said the AfCFTA will provide new export opportunities for ‘Made in Africa’ products and enable member countries to trade with each other without tariffs or other hindrances.

“All of this will help the continent to absorb the 10 to 12 million African youth looking to enter the job market annually. The AfCFTA should therefore be underpinned by strong and ambitious rules of origin, requiring a very high level of value-add here on our continent.

“We need, as Africans, to resist the temptation to simply become transhipment centres, adding only limited industrial value in Africa,” he said.

The AfCFTA, the President said, will unlock more value and give effect to the dream of African development if it promotes complementary trade between countries.

“It is about using the combination of the continent’s raw materials and industrial capacity, finance, services and infrastructure to produce quality finished goods to local and global markets. It is about creating a market large enough to attract investors from across the world to set up their production facilities on the continent,” President Ramaphosa said.

He called on leaders to unite and leverage platforms such as the Intra-African Trade Fair to mobilise all African governments, together with social partners, to work tirelessly to address youth unemployment.

He said half of Africa’s people are women, and they are the dominant actors in the informal sectors of Africa’s economic landscape.

“Despite this, women only generate about a third of the continent’s combined GDP. It is important that the Intra-African Trade Fair gives special attention to African women in business, recognising their great potential as drivers of economic change across the continent.”

The President urged the continent to find ways of attracting more investment into economies, and encourage African businesses to invest in each other’s countries.

“This requires that we improve the ease of doing business in our countries and provide protection for investors through strong and independent legal systems that will ensure the sanctity of contract, and fair and expeditious legal processes,” he said.

The Statesman said the hour of action is now, and countries must work with speed to resolve any outstanding issues around the AfCFTA, and take the necessary steps towards domestication.

He reiterated that South Africa stands ready to work closely with all African countries to forge more balanced, equitable and fair trade relations among African nations.

Source: South African Government News Agency