IATF 2021: Experts Say African Economies Need Strong Industrial Value Chains For AfCFTA

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The Secretary General of the AfCFTA Secretariat, Wamkele Mene, has indicated the need for African countries to focus on growing their manufacturing sectors to boost the contribution of regional value chains to intra-Africa trade.

“We need to start with the manufacturing sector and develop an industrial base and we can graduate from there; at the same time, we can pursue services sector development strategy as we implement the AfCFTA,” he said at a high-level forum at the just-ended Intra Africa Trade Fair in Durban, South Africa.

Mr. Wamkele Mene who was speaking at a forum on ensuring value chain development under the AfCFTA, also called for clearer plans by African governments towards industrialization and deliberate campaign for the consumption of goods produced in Africa.

“Once we start developing our own productive and manufacturing capacities as a continent, we will have to follow that through with a campaign to encourage African consumers to buy Made in Africa,” he added.

The AfCFTA Secretary General cautioned that if the continent indeed wants to see the AfCFTA effectively implemented, it should be owned be private businesses and not governments, trade diplomats and negotiators.

He further indicated: “If we don’t want this to succeed, we will leave it only to government and trade negotiators who know little about running a business. That’s why we’ll create the platform for African private sector engagement to ensure that they are part and parcel of the AfCFTA implementation process.”

During a panel discussion on the subject of ensuring value chain development under the AfCFTA, Dave Coffey, CEO of African Association of Automotive Manufacturers indicated that the continent has a weak industrial base and suggested some practical measures to help the automotive sector in line with intra-Africa trade.

“One of the challenges of Africa is that it has a weak manufacturing base; I’ve seen at firsthand. So, we need to bring in existing components manufacturers to partner on the ground and develop local capability”.

What’s very important is that there is huge opportunity in this single market is that it’s going to facilitate the scaling of our competitive manufacturing and trade,” he said.

Dave made a call to have direct policy on the importation of used vehicles on the continent considering that about 85percent of vehicles that are sold in Africa are used.

“We are a dumping ground for the developed world at the moment and that needs to stop. Importers of these used cars are in fear that they will lose their business model but that’s not the case.

There is an absolute place for used vehicles but the source of used vehicles will be substituted to vehicles assembled in Africa. So, within the free trade area, we need to harmonize the right standards; we need vehicles that come from the fleet assembled in Africa to be maintained at the right intervals, to return the residual values so that they can attract affordable finance,” he added.

Dr. Amany Asfour, Interim Chair of the Africa Business Council called for increased awareness and targeted financial and policy support for Africa’s private sector, especially small businesses, women and youth.

She said: “What does the single market mean to the people of Africa and does it impact our daily lives, in terms of creating more jobs, improving trade in value added goods from the continent?

We need to create awareness about the AfCFTA for all our categories from large corporates and cross-border women traders, the young entrepreneurs and the big chambers of commerce.”

She also called for all governments to set aside about 40percent of its procurements for the private sector, including small sized businesses, women and youth.

“If AfCFTA will succeed, it demands all of us coming together to have an affirmative action for our government procurement. Financial inclusion is very important; we need specialised and targeted financial products geared towards the private sector, especially SMEs, women and youth,” she indicated.

Nana Osei Bonsu, Chief Executive of Private Enterprises Federation (PEF), bemoaned what he called disjointed government policies on the continent particularly in West Africa.

“The difficulties we have is a plethora of policies across board; there are a variety of policies that are disjointed, stumbling blocks and barriers to trade that affect businesses engaged in cross-border trading,” he argued.

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