Every May, Africa stands united to commemorate Africa Month, a momentous occasion that pays tribute to the rich tapestry of cultures, the profound heritage, and the triumphant stories woven across the continent.
However, beyond the celebrations, we must relentlessly strive to shape an Africa of unwavering prosperity, one that will ignite pride in the hearts of generations to come. And at the forefront of this mission lies the imperative to ensure the resounding success of the African Continental Free Trade Area (AfCFTA).
This groundbreaking and potentially game-changing pact holds the power to unleash an economic revolution – ushering in unparalleled progress and prosperity. We cannot afford to falter in our dedication to this cause.
A key aspect for reaping the full benefits of the AfCFTA and securing a brighter future lies in moving quickly to ensure a stable and sustainable energy supply.
With a population of about 1.3 billion people and a combined GDP of approximately $3.4 trillion (about R61 trillion), the AfCFTA, phase 1 of which is starting to see incremental implementation despite some key unresolved negotiations on rules of origin and tariff schedules, has the potential to become an unparalleled titan of free trade agreements.
It seeks to gradually eliminate tariffs on 90% of goods and reduce trade barriers. The global trade body, the UN Conference of Trade and Development, estimates that the agreement could boost intra-African trade by about 33% and cut the continent’s trade deficit by 51%.
According to a World Bank report, the AfCFTA could raise the incomes of African countries by 7%, or $450 billion, by 2035, reducing the number of people in extreme poverty by 40 million, to 277 million. This underscores the immense economic benefit that can be harnessed by enhanced regional trade and integration.
The ambitious trade pact presents a golden opportunity for South Africa to expand its trade and drive the economy to new heights. As the gateway to the African market, we have the potential to become a thriving hub for investment and commerce. However, our industries are held back by frequent power outages, an unreliable energy supply, and an excessive reliance on unsustainable fossil fuels.
These limitations have stifled innovation, hampered job creation, and eroded our competitiveness on the global stage. It’s evident that without a sustainable and adequate energy supply, our industries cannot meet the demands of increased trade under the AfCFTA, severely limiting their growth and stifling job opportunities.
To truly unlock the benefits of the AfCFTA, South Africa and the continent must make a comprehensive energy strategy the top priority.
This should involve diversifying the energy mix, increasing investments in renewable sources and improving infrastructure.
Solving the energy crisis cannot be achieved in isolation; it requires collaboration between governments, private sector entities and international partners. We should actively seek partnerships to leverage expertise, technological advancements, and financial resources. Through regional co-operation and knowledge sharing, we can enhance energy security.
To unlock the full potential of the AfCFTA, we must tackle the energy crisis head-on, swiftly, and decisively.
This demands bold action from government stakeholders, decision-makers, and all concerned parties.
South Africa and the continent have the potential to contribute significantly to economic growth, create numerous job opportunities, and drive the AfCFTA to great success by fostering a business-friendly ecosystem.
With the right approach and a stable and sustainable power supply, we can forge a prosperous continent that shall inspire pride in generations to come.
Stander is CEO of Wesgro, the Western Cape’s tourism, trade and investment promotion agency.
Cape Times