The Chairman of the Board of Directors and Advisory Board at the Africa Private Sector Summit, Professor Kingsley Moghalu, has said when fully implemented, the African Continental Free Trade Area, AfCFTA, would bring 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 noted that the envisaged quantum leap from the impact of AfCFTA is not misplaced as Africa trades far less within itself than 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 however, said AfCTA targets simply cannot be achieved without the private sector.
While governments have signed and ratified the AfCFTA, it is companies and business enterprises that trade acrossAfrica, far more than governments.
"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 emphasized the necessity of adopting the Private Sector Bill of Rights (PSBoR) as a complementary instrument alongside the Regional Economic Communities, RECs and AfCFTA to shape the desired future for Africa.
According to him, PSBoR is critical in fostering economic growth, combating poverty, and positioning Africa as a thriving business hub.
In outlining the interconnectedness of the PSBoR with the RECs and AfCFTA, Moghalu stressed that its adoption would contribute to thriving businesses, increased tax revenues for governments, and the sustainability of 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.
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"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 attributed high poverty in the continent to the relatively low level of intra-African trade.
"The PSBoR guarantees, amongst other rights, the right to favourable credit terms to support short, medium 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.
