Pan-African trade deal a catalyst for sustainable growth
· Challenges remain to bring down barriers and soften borders
· Essential to involve whole of society and deliver jobs for young
Cape Town, South Africa, 6 September 2019 – Africa has a recipe for sustainable growth, following this year’s agreement on a ground-breaking trade deal that promises to soften borders across the continent, the Co-Chairs of the World Economic Forum on Africa told participants in the closing session today.
While big challenges remain to translate the promise of the Africa Continental Free Trade Area (AfCFTA) into jobs and economic growth on the ground, there is a palpable sense of hope that the components for success are now in place.
“I like to think of this CFTA as the most delicious African dish that can be produced,” said Arancha Gonzalez Laya, Executive Director of the International Trade Centre. “The ingredients have been assembled, the cooks are in the kitchen. The guests are impatiently waiting for this dish to be served.”
The “dish” is vital for the 200 million young Africans aged 15-24 who need to see the continent move up a gear to a higher level of economic growth if they are to secure jobs and contribute to their countries’ prosperity as the workers of the future.
Sipho Pityana, Chairman of AngloGold Ashanti, said the free trade deal is a “catalyst”. However, it is now up to political and business leaders to implement the removal of trade barriers and ensure sufficient investment in infrastructure and logistics to truly accelerate cross-border trade flows.
“We need to soften our borders to enable easy movement,” Pityana said. “We need leadership that is capable and has the determination to act collaboratively.”
For investors, this is a critical moment – and also a testing time for the claim made by South African President Cyril Ramaphosa at the meeting that this will be “Africa’s century”.
“From a business point of view, I view Africa as a large-scale start-up, just as East Asia was in the early 1990s,” said Alex Liu, Managing Partner and Chairman of A.T. Kearney. He argued that the continent could leapfrog ahead in certain areas, just as it has already done in mobile payments.
Including the whole of society will be crucial to delivering sustainable success, given the rapid pace of change in the workplace and the disruptive effects of new technologies with the arrival of the Fourth Industrial Revolution. Africa’s left-behind youth and discriminated-against women have already made clear they are not prepared to tolerate the status quo.
“If we don’t bring society with us then we will end up with similar tensions that the first and the second and the third industrial revolutions had,” Farrar said.
That also requires long-term thinking and a multistakeholder approach from business. Ellen Agler, Chief Executive Officer of the END Fund, a philanthropic initiative tackling neglected tropical diseases, said it is clear that successful companies have to chase more than profit.
“It’s amazing how many times I engage with the pharma sector and they say: ‘We keep the best people because of our programmes on engaging in neglected diseases’ – but that’s one of the things that helps with retention, helps with talent acquisition.”
André Hoffmann, Vice-Chairman of Roche, said Africa’s extraordinary natural heritage also needs to be cherished and is an opportunity for development. “Nature is not something that stops you from developing but it is an opportunity. In fact it is a $1 trillion opportunity for investment,” he said.
