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The East African Business Council(EABC) urges the East African Community to fast track the negotiations of the AfCFTA in line with private sector positions, for businesses in the region to take advantage of the 4 trillion AfCFTA consumer market.
The AfCFTA market is estimated to rise from USD 1.27 billion to USD.1.7 billion by 2030, out of which about USD 600 million will be in the middle class (Bramdeo, 2018).
The private sector is the real beneficiary of the AfCFTA and there is an urgent need to fast track the formation of a continental institution mandated to articulate the views of the private sector on the actualization of the continental agreement.
“EABC in partnership with the regional communities’ business councils has been spearheading the formation of the African Business Council, to champion private sector views in the continental policy formulation processes,” said Dr. Peter Mathuki, CEO EABC in his welcoming remarks during the EABC-GIZ webinar on opportunities for the private sector in the AfCFTA held today.
The AFCFTA will promote industrial development as companies will have economies of scale and access to cheaper raw materials due to the reduction in tariffs, which will also lower the prices of imported goods for consumers.
“Currently, intra-Africa trade is limited to 15% of Africa’s total trade, indicating that the intra-regional value chain is very weak in contrast to Asia, where it stands at 80%. The trade volume in Africa is also constrained by the relatively slow economic growth in the continent, which averages at 4.6% since 2000 in contrast to Asia’s 7.4%,” said Dr. Peter Mathuki.
The AfCFTA’s benefits could be considerable, but only if implementation proceeds fully and evenly. Challenges envisaged in the AfCFTA include as national interests, trade supply constraints such as infrastructure, unfair competition and disputes, therefore, this calls for the importance of the Government to ensure the private sector is at the center of its development.