Africa Day Celebrates Progress And Budding Continental Growth
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On Saturday 25 May we will be celebrating Africa Day, as well as the inauguration of Cyril Ramaphosa as the state president. One of the questions we should be asking is: How can the African community unlock more economic growth through closer cross-border trade ties and cooperation? Consider the fact that intra-African exports made up only 18% of total exports across the continent, compared to around 60% each for intra-Asia and intra-Europe exports.
Exports increasing exponentially
The African Continental Free Trade Area agreement signed by 44 African nations is a promising step towards redressing this picture. By harmonising regulations and tariffs across countries to create a common market, we can one day create a trading bloc that is as powerful and coherent as the European Economic Area.
It is a project that will span decades, but in the interim, there is much we can do to catalyse growth and trade. We Power the Nation – an independent survey commissioned by Sage – shows that South African companies are already driving exports to the rest of the continent. More than half (55%) are already exporting to the Middle East and Africa.
Developing Africa’s internal market
According to the respondents, the top three actions government can take to better support aspirations to increase international trade are:
- Developing opportunities in international markets (37%)
- Providing investment incentives and funding (36%)
- Removal of trade barriers (35%).
Sage believes businesses in other African countries would share these convictions.
Another focus should be for each country to develop its internal market by supporting local businesses, particularly services companies and manufacturers that are helping to diversify economies from Africa’s traditional strengths in commodities and agriculture. Domestic demand is the foundation of a resilient, creative business sector that can grow into an export powerhouse.
Sage call on governments and big business in Africa to support their innovative local businesses – whether these are fintech companies in Nairobi, Nollywood film producers or entrepreneurs investing in clean, renewable energy. Such companies can help African countries become more competitive, create jobs and grow the tax base.
The importance of collaboration
“I am incredibly proud to celebrate Africa Day, which coincides with the inauguration of Cyril Rampahosa as South Africa’s president following the recent election,” says Bensch. “Many African heads of state and SADC representatives will be in attendance, reminding us of the close ties shared by this continent’s nations and the importance of collaborating ever more closely on trade and the economy.
“I have a strong belief in this continent and what it can offer to the rest of the world. With a dynamic, youthful population and a growing internal consumer market, Africa is one of the most exciting places to be right now. I can’t wait to see what’s next for this vibrant continent.”