UK and Africa have had a long trade history and it promises to enhance and bear further fruition with the UK government committing up to £35m to support negotiations and implementation of the African Continental Free Trade Area (AfCFTA).
Last week UK’s Her Majesty’s Trade Commissioner to Africa, Alistair Long and I hosted the Secretary General of the African Continental Free Trade Area, Wamkele Mene. He was formerly the Director of International Trade Law at the Department of Trade and Industry, and was in London to iron out the fine lines to realise the benefits of AfCFTA coming from lower tariffs, which involves working with the continent’s trade negotiators to agree on rules of origin.
At the heart of that is the partnership with Trade Mark East Africa and targeting specific corridors for improved trade facilitation. I therefore also had meeting with the CEO of Trade Mark East Africa, Frank Matserat to ensure the success of the programme. Mr Wene knows bringing investment into Africa is all important, and remarked on how impressed he was with the UK investor community’s focus on impact and their practical examples of where improved trade facilitation would help.
This ambitious pact has been signed by 41 of Africa’s 54 countries, thereby ensuring a three percent extra GDP growth. This pact was much needed in the light of the fact that UK’s trade with Africa which was 30 percent not so long ago has shrunk to less than four percent.
It is estimated that by 2035 AfCFTA will be able to lift an additional 30 million people above extreme poverty and increase intra African exports by 81 percent thereby raising wages by 10 percent. For UK businesses, the trade bloc will remove market access barriers by creating a single continental market, making it easier and more cost-effective for UK businesses to export goods and services across the 54 AfCFTA member states.
In a volatile and changing world of geopolitics, the UK, through AfCFTA, can continue to work as a strategic partner in making it the world’s largest trading bloc and creating new opportunities for businesses across Africa and the UK. It cannot be ignored that Africa’s 54 countries cover a landmass that is larger than China, USA, Western Europe, Japan and India combined.
By 2050, more than a quarter of the world’s population will be African and the continent has the largest middle-class in the world, with a very large young population. As the world’s largest free trade area, the AfCFTA has the potential to boost Africa’s economic growth by driving industrialisation, generating jobs and delivering prosperity across the continent.
For UK businesses, the trade bloc will remove market access barriers by creating a single continental market, making it easier and more cost-effective for the UK businesses to export goods and services across the 54 AfCFTA member states.
I am travelling to Africa this week to hold further discussions on trade deals as I am saddened to notice that Africa’s economic potential has often gone unnoticed. Despite accounting for 17 percent of the world’s population, it has only three percent of global GDP.
But with sustained structural reforms, one can envisage Africa emulating China’s rapid rise over the past 50 years, and McKinsey has estimated that by 2025 there will be approximately $5.6 trillion in African business. And, as the Prime Minister’s Trade Envoy, I am confident that the success of AfCFTA will make a huge contribution to realising that dream, as I am sure a large population of Indians from Africa would wish the same and see an Africa open to trade.
