How Free Trade And Technology Is Impacting Africa’s Development

When the Africa Continental Free Trade Area is implemented this year, it will create a single market for goods and services for the first time in the continent’s history.

The agreement will cover a geographic area with a combined GDP of $3.2-trillion and a population of 1.2 billion people.

It has the potential to drastically accelerate economic growth and exceed the African Development Bank’s current estimates for GDP growth from $1.7-trillion in 2010 to more than $15-trillion by 2060.

This has the potential to shift Africa from being an aid-dependent continent to becoming an investment-dependent continent.

It has the potential to drastically accelerate economic growth and exceed the African Development Bank’s current estimates for GDP growth from $1.7-trillion in 2010 to more than $15-trillion by 2060.

This has the potential to shift Africa from being an aid-dependent continent to becoming an investment-dependent continent.

Legacy infrastructure also poses a challenge, especially in terms of the effective movement of goods between countries that will form part of AfCFTA.

Supply chains are the circulatory system of the global economy, but Africa’s legacy of underdevelopment has left its road, rail and ports infrastructure lacking.

According to the African Development Bank, the continent’s infrastructure needs an amount of $130-billion to $170-billion per year. In 2016, only $62-billion was secured for infrastructure investment.

Ports infrastructure struggles to keep pace with global standards. While 90% of African imports and exports are driven by sea, PwC estimates that, of the 72% of global container throughput in developing nations, only 1% travels via African ports.

Effective export trade from AfCFTA to other regions will require a rapid upgrade of the continent’s main trade ports.

The World Bank’s recent note of appreciation regarding the progress with the Dar es Salaam Maritime Gateway Project in Tanzania is a positive sign. The port, which is set to become Africa’s biggest, is expected to start operating in early 2020.

The African Integrated High-Speed Railway Network project, which forms part of the African Union’s Agenda 2063, aims to repair or construct 12 000km of missing linkages to create a rail system that can support AfCFTA by linking all corners of the continent via a fast and reliable rail network. At least 20% of the pilot phase of this project is due for completion by 2023.

Integrating talent and trade

It is of course not only Africa’s manufactured goods and agricultural output that should more easily flow across the continent when the AfCFTA is implemented.

It is critical that its talent – a youthful population that is expected to more than double by 2055 according to UN estimates – can move freely to access work and apply their skills to solving the continent’s most pressing challenges.

However, many countries still hinder free movement through cumbersome visa requirements. The Africa Visa Openness Report 2017, published by the African Development Bank, McKinsey & Company, and the World Economic Forum Global Agenda Council on Africa, found that Africans need visas to travel to more than half of the other countries on the continent, with only 22% requiring no visa.

While the reasons behind the stringent visa regimes are understandable – revenue generation, control over illegal immigration, monitoring migration during pandemics – it is time the continent consider establishing visa-free regional blocs similar to the Schengen area in Europe.

Equipping the continent’s talent with the correct skills for the digital age is no mean feat. Africa’s education system has not kept pace with the demands of the global digital economy.

Skills shortages have the potential to derail efforts to build a globally competitive digital workforce. Africa’s economic growth cannot be sustained without access to the correct 21st-century skills.

The past few years have seen an acceleration in public-private partnerships driving youth skills development initiatives, with millions of youth trained in basic coding skills.

By fostering greater regional and continental integration, efforts to equip Africa’s youthful population with appropriate and future-fit skills could be expanded.

And by bringing in the private sector, who can lend training, technology and skills development support, in-country and pan-African initiatives aimed at up-skilling Africa’s youth can be accelerated as we enter the Fourth Industrial Revolution.

Ramaphosa is right: Africa is on the rise and on the move. We are entering a new era of free movement, collaboration, and mutual success among all 50 African countries that will form part of AfCFTA. The question is: how do we, as technology providers, businesspeople, citizens, and policymakers, contribute to its success and build a bright future for all who call Africa home?

From: https://www.busiweek.com/how-free-trade-and-technology-is-impacting-africas-development/

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