Business Post Contributor
By Professor Maurice Okoli
Over the past few years, African Union, the continental organization, has made intra-African trade its newest flagship and has created the Intra-African Trade Fair (IATF), which provides a unique and valuable platform for potential investors to support the continent’s transformation through industrialisation and export development, for businesses to access adequate trade and market information, and operate in an integrated single African market of over 1.4 billion people with a combined gross domestic product of over $3.5 trillion under the African Continental Free Trade Area (AfCFTA).
Organized by the African Export-Import Bank (Afreximbank), in collaboration with the African Union and the Secretariat of the African Continental Free Trade Area (AfCFTA), it was the historic third edition of the IATF, held in Cairo, Egypt from November 9-15, 2023. Under the theme The AfCFTA Marketplace, it brought together high-powered government officials, ministers, representatives of central banks, regulatory bodies and agencies, legislative authorities, commercial banks, law firms, entrepreneurs, and exporters from across Africa and beyond.
The importance of the Intra-African Trade Fair (IATF2023) was given as follows:-
(i) Promoting intra-African trade: The IATF plays a crucial role in boosting trade among African countries. Intra-African trade is generally lower compared to other regions, and the fair aims to address this by creating a conducive environment for African businesses to trade with each other.
(ii) Market Access: It provides African businesses with access to a larger market within the continent. This enables companies to expand their customer base and increase sales, ultimately contributing to economic growth.
(iii) Facilitating Networking: The fair brings together a diverse range of businesses, government officials, investors, and trade experts. This facilitates networking and partnerships that can lead to collaborations and business growth.
(iv) Showcasing African Products and Services: African businesses have the opportunity to showcase their products and services to a wider audience. This not only helps in building brand recognition but also highlights the quality and diversity of goods and services produced on the continent.
(v) Attracting Investment: The IATF attracts domestic and foreign investors interested in African markets. This can lead to increased foreign direct investment (FDI), which can fuel economic development and job creation.
In addition to establishing business-to-business and business-to-government exchange platforms for business deals and advisory services. The conference ran alongside the exhibition and featured high-profile speakers and panellists addressing topical issues relating to trade, trade finance, payments, trade facilitation, trade-enabling infrastructure, trade standards, industrialization, regional value chains and investment.
It marks one more significant step forward towards achieving economic independence which seemingly eluded the continent since 1963, the year the African organization was established and later transformed into what is popularly referred to as the African Union (AU). As stipulated by the explicit guidelines, the AU oversees and monitors the entire aspects of multifaceted development across Africa.
The AU is a sought-after platform for establishing mutually beneficial contacts and promoting bilateral relations for regional economic blocs, and dynamically developed regions such as Asia-Pacific, the United States and Canada to Latin America and Europe.
With the geopolitical changes and emerging multipolar political and economic order, Africa has become the main focal point in the world. In a practical context, Africa forms one of the current global transformations at the intersection of the past and the future. At the same time, Africa has already recognized its past of the adverse impact of resource exploitation primarily due to former leaders’ weak policies. Now it has the opportunity to make a tectonic shift and get engaged in a more equitable integrated, multipolar world.
With vigour, Africa can continue pursuing an independent continental policy to improve its economic status, and further strengthen its sovereignty with an increasing number of states in the Global South, and most probably in the East. Of course, it requires some unity in diversity in order to achieve this sustainable economic sovereignty.
The AU’s involvement in the IATF 2023 highlights its commitment to promoting economic cooperation and integration among African nations. By actively coordinating the trade fair, the AU aims to showcase Africa’s potential as a hub for intra-African trade and attract investments from both within and outside the continent.
The AU’s involvement in the IATF 2023 also signifies its recognition of the importance of regional economic integration in boosting Africa’s overall trade performance and fostering sustainable development across the continent. It can leverage its influence to facilitate discussions and negotiations on key trade, industry and tourism issues.
The vision for continental trade points to the creation of the powerful African Continental Free Trade Area (AfCFTA) in January 2021. Its primary purpose is to form a single market with a common umbrella – a borderless market allowing the free movement of goods, services and people. It is attracting external partners despite the persistent challenges and stumbling roadblocks (hurdles), the most tractable being the political disunity, divergent policies, ethnic conflicts deep-seated corruption and lack of good all-inclusive governance.
That, however, high optimism still exists. Most of the African countries are rallying around the historic decision, and frequently express the determination to join platforms, to develop targeted interactions within the framework of pan-Africanism. Several summits and conferences have been held to dialogue strategic partnerships relating to aspects of the continental economy.
Acknowledging the fact that attaining economic sovereignty includes thorough discussions on prospects for investment cooperation, industrial development, adopting new scientific technologies for modernizing agriculture and, of course, tourism and recreation for the 1.4 billion population in Africa.
In search for those aforementioned above necessitates the establishment of the Intra-African Trade Fair (IATF) and the African Continental Free Trade Area (AfCFTA). In one phrase – it remotely aims at strengthening the continental industrial base and promoting the value supply chains across Africa. At this moment, it is necessary to remember that global tensions are causing unprecedented fragmentation of trade, noting an uptick in unilateral trade restrictions and a growing trend towards consolidation of relationships within the processes of reconfiguration.
Therefore, the main challenging objective is how best to guide and better equip the private industrial and economic sectors with value chain integration strategies within the context of the AfCFTA. So we have to put emphasis on exploring the priority challenges confronting businesses and to identify targeted interventions that will support these businesses on their trading journeys in the AfCFTA.
Chief Olusegun Obasanjo, former President of Nigeria and Chairman of the IATF2023 Advisory Council, underscored the fact that intra-African trade holds the key to unlocking Africa’s true potential and fuelling economic growth, fostering industrialization and creating job opportunities for the people of the continent. “It is through this spirit of cooperation and collaboration that we will unlock the untapped potential of our continent,” he said, adding that the trade fair signified the commitment of Africa and its diaspora nations to economic integration and to their collective determination to create a prosperous future.
President Obasanjo further called on African leaders, policymakers, and representatives to foster an environment conducive to trade by eliminating unnecessary bureaucracy, harmonising regulations and investing in necessary infrastructure. IATF2023 was a stepping stone towards a future where African nations traded freely, breaking down barriers and opening doors of opportunities for all.
President and Chairman of the Board of Directors of Afreximbank, Professor Benedict Oramah, referred to the IATF as collective efforts for the stimulation of African countries’ economies and an attempt undertaken towards holistic economic recovery backed by political support. “It offers a comprehensive solution – it is not just a trade fair, but to make intra-African trade a reality, it is necessary to review border procedures, improve transport infrastructure and make effective the airline routes. The realization of the intra-African trade requires effective and regular electricity distribution and broadband connectivity, especially in industrialized and urbanized major African cities.
Kanayo Awani, Executive Vice President of the Intra-African Trade Bank at the African Export-Import Bank (Afreximbank), during special creative session held as an integral part of the third Intra-African Trade Fair (IATF2023) held in Cairo, Egypt, has underlined the catchwords such as multifaceted approach, encountering competitiveness, collaborating with business through co-financing agreements, promoting transparent financial practices and financial commitment as necessary factors for boasting sustainable entrepreneurial ventures.
For trade and investment, African countries could make use of factoring in order to take advantage of the opportunities for expanding the continent’s regional value chains, to tap into the opportunities available in the continent, especially in the context of intra-regional trade. Despite these numerous promising prospects, the economic sector grapples with challenges such as limited access to financing and business trademark infringements due to weak legal frameworks and enforcement mechanisms, according to Kanayo Awani’s explanation.
In a related discussion, Albert M. Muchanga, Commissioner for Trade and Industry of the African Union Commission, recognized the private sector and creative sector’s rapid growth and its substantial contribution to inclusive growth and sustainable development in African economies. Muchanga, however, urged African nations to translate creative potential into tangible projects, emphasizing the importance of investing in and protecting international intellectual property rights.
South African President Cyril Ramaphosa declared that South Africa was ready to work with other African countries to drive more balanced, equitable and fair trade relations for the benefit of the continent. “This Trade Fair is about building bridges. It is about connecting countries. It is about connecting people as well. Now Africa is taking concrete steps to write its own economic success story and this Intra-African Trade Fair is part of that story. Africa is opening up new fields of opportunity,” Ramaphosa asserted.
President Ramaphosa also wanted to see more made-in-Africa labels, as “this is critical if we are to change the distorted trade relationship that exists between African countries and the rest of the world. We can no longer have a situation where Africa exports raw materials and imports finished goods with those materials. By promoting trade in Africa, we strengthen our industrial base and produce goods for ourselves and each other.”
He stressed the need to “use 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. And about creating a market large enough to attract investors from across the world to set up their production facilities on the continent,” Ramaphosa said.
Most of the speakers noted the African Continental Free Trade Area (AfCFTA) must make the effort to ensure that Africa becomes a marketplace where no country is left behind, create jobs and enhance revenues for all parties. On the public sector side, governments must support local entrepreneurs to build scale, and therefore improve productivity. The implementation of initiatives most often poses difficulties and the challenges are surmountable if both public and private sectors collaborate with a common interest and a clear vision.
Looking back at its historical establishment, the AfCFTA agreement entered into force on May 30, 2019, after the treaty was ratified by 22 countries – the minimum number required by the treaty. It has the potential to generate a range of benefits through supporting trade creation, structural transformation, productive employment and poverty reduction. The AfCFTA opens up more opportunities for both local African and foreign investors from around the world. The official start of trading on January 1, 2021, signalled the commencement of Africa’s journey to market integration.
The African Union session provided a forum for exchange on what should be Africa’s immediate trade and investment priorities, to enhance Africa’s share of global trade, FDI, and ultimately the continent’s contribution to global GDP. The overall objective is to ensure that Africa strengthens its position internally from a trade and investment standpoint, which will give the continent the leverage for a strong position during its engagement at the G20. The dialogue examined how those priorities can advance intra-African trade as well as Africa’s share of global trade.
United Nations Development Programme and African Union Commission session provided a platform to drive a multi-sectoral dialogue on amplifying investment in digital infrastructure, to contribute and explore strategies that can lead to the growth of African unicorns, which in turn will create employment opportunities and drive economic growth across the continent, as well as to empower the African tech ecosystem to reach its full potential by going from 20 unicorns to 200 by 2030 and 2000 by 2063. By fostering collaboration, providing insights, and identifying actionable strategies, that discussion contributed to building a vibrant and sustainable tech ecosystem in Africa, driving economic growth, job creation, and technological innovation across the continent.
As the latest developments show, African countries have ratified the African Union protocols, making visa-free movement of people, and ultimately the introduction of the African passport that would facilitate free movement of persons in Africa. The future challenging task ahead – Africa will be able to compete globally, hence African countries must just integrate the market, something that has been evaded Africa since 1963, when forefathers hatched African Unity and established the OAU.
As a continuation of that vision, the African Union spearheads Africa’s development and integration in close collaboration with African Union member states, the regional economic communities and African citizens. The AU vision is to accelerate progress towards an integrated, prosperous and inclusive Africa, at peace with itself, playing a dynamic role in the continental and global arena, effectively driven by an accountable, efficient and responsive Commission.
The final resonating message is to leverage IATF’s combined initiatives and progress with the AfCFTA over the subsequent years. The first edition of IATF was held in Cairo under the auspices of Egyptian President Abdel Fattah El-Sisi. The Intra-African Trade Fair ended with a collective commitment to ensure economic stimulation, triggered by the business events, translates into the strengthening of the African Continental Free Trade Area (AfCFTA) and in achieving the aspirations of the African Union Agenda 2063.
Professor Maurice Okoli is a fellow at the Institute for African Studies and the Institute of World Economy and International Relations, Russian Academy of Sciences. He is also a fellow at the North-Eastern Federal University of Russia. He is an expert at the Roscongress Foundation and the Valdai Discussion Club.
As an academic researcher and economist with a keen interest in current geopolitical changes and the emerging world order, Maurice Okoli frequently contributes articles for publication in reputable media portals on different aspects of the interconnection between developing and developed countries, particularly in Asia, Africa and Europe. With comments and suggestions, he can be reached via email: markolconsult (at) gmail (dot) com
