Priority must be given to investments in women and youth in all facets of the AfCFTA implementation arrangements
The African Continental Free Trade Area (AfCFTA) has huge potential to harness the power of women and youth to realize its true potential.
The African Union's (AU) timely efforts to accelerate the implementation of the AfCFTA is a unique opportunity for the continent to refocus its energy on critical youth and women empowerment interventions. Effective implementation of agreed upon policy instruments by AU member states will transform the continent.
There is no doubt that this landmark continental trade agreement, if driven by women and youth -- among the most valuable assets of the continent -- will be the primary enabler for unlocking Africa's immense potential.
Priority must be given to investments in women and youth in all facets of the AfCFTA implementation arrangements.
Africa has the world's youngest population, with over 400 million young people aged 15 to 35 years. To spur Africa's economic progress and advance SDGs, the critical mass of youth and women remains the main anchor of the AfCFTA, which is the "Agenda 2063," the continent's development blueprint.
This massive single continental market is expected to increase intra-African trade by 52.3 per cent, deepen continental integration, increase productivity, create more jobs, and avail substantial gender-balanced opportunities by including women and youth in Africa's trade liberalization.
The World Bank estimates that the AfCFTA will increase Africa's income by $450 billion by 2035 and increase intra-African exports by more than 81 per cent.
According to the UN Economic Commission for Africa, this single market trade agreement will enable the African economy to reach the $29 trillion mark by 2050. Africa has a unique opportunity to lift millions of people out of poverty by empowering women and youth to change the continent's business environment.
Currently, trade and most of the African economy, is not gender-neutral; it remains biased in favour of men due to social inequalities and a disempowering patriarchal culture that subordinates women. As a result of these gender constraints, women are more likely than men to engage in informal trade.
Youth, meanwhile, face difficulties in accessing formal employment and decent jobs, forcing them into entrepreneurship and small businesses in the informal sector.
However, as with the youth, unlocking the potential of cross-border trade is strategically essential to women's empowerment. In Rwanda, for example, 74 per cent of those engaged in cross-border trade are women, and 90 per cent rely on cross-border trade as their sole source of income.
According to the UN Economic Commission for Africa, this single market trade agreement will enable the African economy to reach the $29 trillion mark by 2050. Africa has a unique opportunity to lift millions of people out of poverty by empowering women and youth to change the continent's business environment..
While intra-African trade can serve as a catalyst to promote gender equity by improving the financial inclusion of women and youth on the continent, their respective integration into trade policies has been suboptimal.
This poses the risk of this critical trade agreement shifting from being a development instrument to being a primary cause of poverty and inequality, resulting in the continued exploitation of women and youth as sources of low-wage labour, inequitable market prices, and low wages. The AfCFTA should be insulated by incorporating inclusion to avoid disempowerment and marginalization of vulnerable groups.
The AfCFTA Secretariat is implementing all the required protocols to boost the core customs unions and free trade agreements to cover the full range of trade opportunities on the continent, advancing the participation of women and youth in cross-border trade.
The AfCFTA will address the excessively high trade costs and steep tariff barriers in many countries that limit the potential of women and youth in the business sector, ultimately stifling economic growth and undermining the continent's overall development.
In addition, opportunities to obtain accessible and market-driven credit and finance for formal and informal women- and youth-led enterprises are often limited. This is due to an assortment of reasons: low levels of financial literacy, inaccessible and difficult-to-understand financial information, collateral constraints, lack of variety in financial products, punitive interest rates with limited financing options, and unfavourable loan application procedures.
This is heartening, considering the prominent role women and youth play in Africa's socio-economic space through the informal sectors that use small and medium-sized enterprises (SMEs) as "special purpose vehicles" for their economic engagement.
A practical and robust solution for the continent rests on increasing access to lifelong learning and financing support, while instituting user-friendly tax products that meet Africa's current and future needs.
What must be done
- For women and youth-led businesses to thrive and participate effectively in intra-African trade, it is essential to improve financial literacy and access to capital.
- Africa must deploy financial awareness and knowledge to these businesses and, more importantly, attract the innovative financing solutions that go with it.
- Current efforts by African governments to reform their respective institutional frameworks and regulatory environments by removing all barriers that hinder women's and youths' access to digital financial literacy, information and monetary investments are welcome.
- Inclusion of this critical and economically active demographic group will increase the momentum to achieve Africa's transformational development framework, "Agenda 2063", which envisions a prosperous Africa whose development is driven by the people.
Currently, trade and most of the African economy is not gender-neutral; it remains biased in favour of men due to social inequalities and a disempowering patriarchal culture that subordinates women. As a result of these gender constraints, women are more likely than men to engage in informal trade.
- In addition, the AfCFTA needs to be strengthened by lessons from other pan-continental initiatives championed by the AU that stimulate regional economic integration and enhance social development while empowering women and youth. These include the African Youth Charter, the AU Roadmap for Harnessing the Demographic Dividend, and the Sahel Women Empowerment and Demographic Dividend (SWEDD) initiative.
Lessons learned from these three initiatives are both a buffer and a stimulus for AfCFTA. Their impacts should be given greater impetus, with a focus on harnessing the benefits of the demographic dividend on the continent, currently estimated to be worth more than $1 trillion per year, as well as the link between development, peace, and security, including the fragility and crises associated with unmet social demands.
- These well-intentioned African initiatives complement the significant role of youth and women in trade in propelling the continent's social, economic, and political progress.
- AfCFTA's governance structures must be professionally protected, and its framework compartmentalized to promote inclusion and participation.
- To be effective, the AfCFTA must be lean and efficient by undertaking strategic tasks rather than doing everything itself. Drawing on innovative instruments such as the Global Fund to Fight HIV/AIDS, Tuberculosis and Malaria, innovative approaches can be created to manage specific tasks, freeing the AfCFTA Secretariat to carry out urgent and necessary tasks. Learning from past continental initiatives is essential to harness the vitality and creativity of African women and youth, which will strengthen AfCFTA as a people-centered local initiative.
- Transforming the continent's youth and women into Africa's demographic dividend will involve substantial investments in education, bridging the digital divide, and access to financial support and increased opportunities. The twofold synergy of youth and women is transformative.
- Rethinking the continental financial architecture to integrate youth and women as drivers of cross-border trade while stimulating and reinvigorating access and inclusion should be a priority for the future.
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The AfCFTA is one of the most innovative, dynamic, and advanced trade agreements on harnessing the power of women and youth. The willingness to give special momentum to free trade in 2023 is evidence of a strong commitment by African leaders who now need robust operational instruments to be deployed professionally to realise the expected transformation of people's lives in our lifetime.
The year 2023 is a pivotal year for the AfCFTA, as it not only means accelerating the necessary infrastructure and putting in place functional systems, but it also offers the continent an exceptional opportunity to fully activate the existing policy instruments that envision placing women and youth at the center of the African agenda.
However, Africa will not take full advantage of the AfCFTA if it remains the epicenter of humanitarian action.
Unfortunately, today more than ever our continent has been faced with multiple humanitarian crises including climate change, food insecurity, disease outbreaks, poverty, inflation, conflict and worsening health inequity. Our collective action is required to fast-track the operationalization of the AU Humanitarian Agency and create a much more favorable environment.
Above all, implementation is critical for these home-grown powerful solutions and policies that will transform Africa and help achieve the 'Africa We Want': an integrated, prosperous, and peaceful Africa.
While the AU Commission is determined to move the agenda forward, let's not underestimate the vital role of the Member States themselves and the strategic roles that partners such as the UN can play in focusing even more on implementation support of agreed-upon continental interventions at country and regional levels.
Mr. Mabingue Ngom is the Senior Advisor to the Executive Director of UNFPA and Director of UNFPA Representation Office to the African Union and the UN Economic Commission for Africa (ECA).
