The Chairman of the Board of Directors and Advisory Board at the Africa Private Sector Summit, Professor Kingsley Moghalu, said that the complete implementation of the African Continental Free Trade Area (AfCFTA) will uplift 30 million Africans, including Nigerians, out of poverty by 2035.
Moghalu disclosed this while speaking yesterday at the AfCFTA Joint Private Sector Session during the 2023 Afreximbank Intra-African Trade Fair in Cairo, Egypt.
“As of August 2023, 47 out of 54 African countries have ratified the treaty. When fully implemented, the AfCFTA will boost intra-African trade by 52%, lift 30 million people out of poverty, and increase the continent’s GDP by USD 450 billion by 2035,” he said.
He said that the expected substantial progress from the influence of AfCFTA is well-founded, considering that Africa conducts significantly less trade within its borders compared to other continents.
“It is no accident that these continents are the wealthiest in the world: 70% of Europe’s trade is within Europe. 59% of Asia’s, and 30% of North America’s trade is intra-regional. In contrast, only 16% of Africa’s global trade is within Africa,” he added.
Moghalu stressed that AfCFTA targets are unattainable without the active participation of the private sector.
Despite governments signing and ratifying the AfCFTA, it is companies and business enterprises engaging in trade across Africa, rather than governments, that play a more significant role.
“This means that the African private sector must be strengthened to leverage the provisions and protocols of the AfCFTA to expand intra-African trade to create prosperity.
“Two critical conditions must be met. The first is an understanding across all stakeholder groups of the balance between the state and the markets in wealth creation. While it ultimately is the private sector that will directly unlock prosperity for Africa, and Africans are broadly enterprising people, the truth is that without effective governments, governance, and public policy, they can’t. Every prosperous country has a competent, effective state as a backdrop,” he said.
Moghalu stressed the importance of embracing the Private Sector Bill of Rights (PSBoR) as a complementary tool alongside the Regional Economic Communities (RECs) and AfCFTA to shape the envisioned future for Africa.
According to him, the PSBoR is crucial for fostering economic growth, addressing poverty, and positioning Africa as a flourishing business hub.
In outlining, the interconnection of the PSBoR with the RECs and AfCFTA, Moghalu emphasized that adopting it would enhance thriving businesses, boost tax revenues for governments, and sustain capital markets.
“We will seek adoption by national parliaments and/or the Executive branches of government. We are walking a similar path as that which led to the successful adoption of the AfCFTA.
“The specific rights identified in the Private Sector Bill of Rights come from the protocols of the RECs and AfCFTA. The PSBoR is intended as an essential companion instrument to the AfCFTA treaty, one that domesticates the continental trade agreement inside national governments, private sector governing and coordinating entities, and in the operations of the African marketplace in reality.
“I believe that the Private Sector Bill of Rights when adopted by African countries and alongside the RECs and AfCFTA, addresses a fundamental conundrum that has confronted post-colonial Africa for decades.
“Why have market-oriented economies created broad-based wealth in Europe, North America, and increasingly in Asia but poverty remains high in the vast majority of African countries? Breaking this jinx is the goal of the AfCFTA and the African Union’s vision 2063 – The Africa We Want,” he said.
He linked the high poverty in the continent to the comparatively low level of intra-African trade.
“The PSBoR guarantees, amongst other rights, the right to favorable credit terms to support short, medium,m and long-term investment projects as well as trade credit supported by the Africa Trade Insurance. It also guarantees the right to benefit from scientific progress (innovation) and the right to local content in intellectual property,” he said.
Kanyi Daily recalls that Kingsley Moghalu said that for the Nigerian naira to regain its strength, the nation needs to transition into an export-driven economy.
