BIZweek n°326 22 jan 2021
BIZweek n°326 22 jan 2021
  • Prix facial : gratuit

  • Parution : n°326 de 22 jan 2021

  • Périodicité : hebdomadaire

  • Editeur : Capital Publications Ltd

  • Format : (260 x 370) mm

  • Nombre de pages : 6

  • Taille du fichier PDF : 4 Mo

  • Dans ce numéro : interview de Carl Chirwa de Bank One.

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VENDREDI 22 JANVIER 2021 BIZWEEK ÉDITION 326 LA TOUR AFRICAN CONTINENTAL FREE TRADE AREA (AFCFTA) CarlChirwa (Bank One)  : « There is still not yet full co-operation and trust between countries » Having been pushed back six months from its initial implementation date, trading under the AfCFTA has commenced on 1 January 2021. All African Union members but one, Eritrea, have signed the deal, and 34 out of 54 signatories have ratified the agreement. « Africa is now trading under new rules, new preferences, because we want to build a single, integrated market on the African continent, » Wamkele Mene, secretary general of the AfCFTA, told a press conference on January 12. However, says CarlChirwa, Head of International Banking at Bank One, some African governments are still reluctant because of the anticipated impacts on their domestic products and people The African Continental Free Trade Area (AfCFTA) single market eliminates tariffs on 90 per cent of goods produced on the continent. It came into effect on January 1 this year. Speaking during a virtual press conference on the earlier this month, Wamkele Mene, secretary general of the AfCFTA, dismissed talks that the AfCF- TA arrangement was being rushed. « I know that in some parts of the world, we get criticism. We are criticised, we are told that we are rushing things, that we’re actually not quite ready. But I want to ask those who hold that view, tell me of a trade agreement where all countries were ready at the same time ? I don’t know it, » he said. According to CarlChirwa, Head of International Banking at Bank One, some African governments may be reluctant to fully support the AfCFTA and liberalise trade with particular countries if that requires politically unpopular decisions or impacts the domestic market for certain goods. He believes that there is still not yet full co-operation and trust between countries and gives the example of rivalry between Kenya and Tanzania. Find their own niche « Tanzania does not want to import goods from Kenya because people believethat once it does, the local market will be overrun by Kenyan products. A similar thing is happening in Nigeria, where it has essentially banned rice imports from neighbouring countries. » Another country that may struggle with embracing trade liberalisation is South Africa. He points to a local political culture that can be unaccepting of other Africans that come to the country for work. « What will have to happen before we see any real inter-African trade is specialisation and value addition locally. Industries will have to pivot from exporting agri-processed or semi-finished goods into actual value-added products, which can be traded across borders, » says CarlChirwa. He explains that each country will have to find its own niche in terms of what it is good at. Ethiopia could specialise in leather and Egypt could focus on cotton, while the southern African countries have a great opportunity in terms of food production, « if they can get it right. » Five to 10 years to see growth Talking to the Global Trade Review on 13 January, CarlChirwa explained thatupgrading logistics infrastructure is « vital » to lowering transport costs. To ship a container from China to Beira, Mozambique costs approximately US$2,000, and to transport that same container from Beira to Malawi, which is 500 kilometers inland, costs US$5,000, he added. « Freeingup airspace and allowing open skies are also really, really key challenges. It can be difficult to fly between capitals sometimes ; if I fly to Côte d’Ivoire from Mauritius, I have to go via Dubai, for example. Businesspeople only do business with people that they know and trust, so to build this they need to be able to visit each other. » While the free trade area requires the elimination of NTBs and an increase in investment to be successful, CarlChirwa told Global Trade Review that it will take five to 10 years for any real growth to be made under the AfCFTA. Future of Sports and Entertainment in an Economically United Africa Economic co-dependency or cooperation between sovereign States is not a new economic strategy. Europe has sought to achievethis at the regional or supranational level through the establishment of the European Union. However, the recent decision of the United Kingdom to leave the EU shows that the goal of integration is not without its challenges. The United States has functioned for so long as a collage of economic co-dependent states that few pay much attention to the analogies with modern supranational regional organizations such as the European Union. However, on closer inspection, it is clear that the same rules of a shared currency, open borders and the full economic integration of the states played a large and important role in the growth, stability and development of the US. Africa has also championed regional economic integration, but never at the level or scale of the AfCFTA and, indeed, not as successfully as in other world regions. African economic communities like ECOWAS, SADC, EAC and others, have failed to substantially integrate their disparate national economies which would have served to protect the region from exploitation by its neighbors to the east and the west. Fixing infrastructure deficit With consumer population projections favouring Africa, and a combined consumer and business spending projection of $6.7 trillion by 2030, the time is now for Africans to look inwards for solutions to the continent’s economic woes. The sports, media and entertainment industry is one space where the continent continues to show promise. African content competes favourably on the radio and streaming networks on a global scale, spurring key investments from media giants like Disney and Netflix. The continent is also a major contributor in the world sports industry particularly in consumption and talent exportation. The discussion must now revolve around the question of how the AfCFTA and intra-African collaboration can be best employed to secure these industries’futures. The answer  : developing local industrialisation, production and distribution infrastructures for the consumption of sports, media and entertainment. This is key to the success of the AfCFTA in these industries. It will be near impossible to unlock the true value of this agreement without Africa first fixing its infrastructure deficit and this is relevant even beyond the sports and entertainment sectors. African countries must aim to localize its production and distribution processes as much as possible to control a larger part of the African market. Too early to gauge In the sports arena, rather than constantly exporting our best talents, local investment in sports like football, for example, can provide the required infrastructure to ensure that African athletes can thrive right here on the continent. This will serve to effectively reduce talent flight, a major challenge in the industry today. It could eventually place African leagues at par with the popular European leagues where so many players of African descent consistently performexcellently. It is still too early to gauge how the AfCFTA willaffect the sports and entertainment industry, since the agreement is still in its early stages of implementation. We are also yet to observe how committed member States are to this intended collaboration. One thing is for sure though ; any initiative that welcomes the free movement of goods and services within Africa and promotes intra-African investments and cooperation on intellectual property rights is a huge step in the right direction for a continent with much to benefit from greater economic integration. [Source  : Centurion Law Group, 15 January 2021] 3

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