IT has become very clear that the global economy will continue to suffer under Covid-19 pressures, following the resurgence of the virus in the final quarter of 2020. Covid-19 continues to take lives and affect business and trade. Prospects for a return to lockdowns are very high, even in economies that have not already taken this action in the past few months.
The world is going through one of its most challenging times since the 1918 influenza pandemic, which tore through economies 100 years ago, killing 50 million people and affecting production.
For those countries with the capacity to inject industrial bailouts into their economies to keep them going as governments confront the scourge their problems are half solved.
But we also have many countries like ours, which were already fighting a blistering meltdown before the pandemic struck.
Here, firm shutdowns were commonplace, precipitated by foreign currency shortages, endemic power blackouts and a dwindling market for goods and services following extensive job cuts occasioned by de-industrialisation. The truth is, no one knows what the future holds for this market, and many have been asking the question: “Where do we go from here?”
But as reported in our main business story today, if the country plays its cards right, part of the problems that our industries have faced may be history from January 1, 2021, when the Africa Continental Free Trade Area (AfCFTA) bloc rolls into life.
It is a bloc of immense potential that cuts across the continent’s 55 economies with a combined 1,3 billion consumers and a combined US$3,2 trillion gross domestic product. The most important thing is that the AfCFTA agreement contains provisions compelling member states to remove tariffs from 90% of goods entering their markets from the region. This is expected to allow free access to commodities, goods and services across the African continent.
We are unlocking opportunities to trade freely as Africa, reducing the distances that our goods travel before landing in other continents, where competitiveness gets compromised.
As Africa, we are saying let’s look into our region for opportunities first, help each other by eliminating trade barriers and improving the profitability of our companies and boost their capacity to feed the region’s 1,3 billion people. It means even countries like Zimbabwe, who carry a pariah status in the West, can at least access a bigger market with less hurdles. It is an immense opportunity.
But it requires the government and the companies to work together to build this closer market while making sure relations with the rest of the world are reviewed to access even more markets.
This is how the world operates today. Nobody, even the greatest powers can go it alone and survive. A few things need to be done before we make it in Africa.
The first is to make sure barriers to foreign direct investment are removed, the cost of doing business is lessened and traditional vagaries like corruption and impunity are addressed. This does not need money, but simple action.