Free trade pact to spearhead Africa’s economic growth

October 10, 2019 1:56 pm0 comments
Carel Coetzee, Chief Executive Officer of NEC XON, delivering the keynote address at the company’s annual summit in Sun City, South Africa. Pic: NEC XON

Carel Coetzee, Chief Executive Officer of NEC XON, delivering the keynote address at the company’s annual summit in Sun City, South Africa. Pic: NEC XON

from MTHULISI SIBANDA in Sun City
SUN CITY – A technology executive has forecast the African Continental Free Trade Area (AfCFTA) to result in massive economic growth and help alleviate poverty in the continent.

Carel Coetzee, the Chief Executive Officer of NEC XON, highlighted the prominent role that technology would play in the impact of the trade agreement endorsed by a majority of African countries.

In an interview with CAJ News Africa at the company’s annual Pan-African summit in Sun City, North West province, Coetzee said the resultant growth in intra-African trade would save African economies vast financial resources on imports.

“AfCFTA will by 2050 be the highest contributor to growth and poverty alleviation in Africa,” the executive projected.

“With AfCFTA, there will be lower tariffs on goods produced among those 54 Africa countries,” he said on the impact of the trade agreement only Eritrea has not signed.

“That means, for example if, a product is produced in Mozambique and they supply it to Angola, there will be lower tax input on it, which means there will be an incentive to produce on the continent,” Coetzee explained.

“That creates some incentive for member countries to start producing locally and stop importing everything. When we produce locally, we can sell it cheaper. Then we can compete better within the AfCFTA,” he continued.

The executive added that the continent will also benefit in terms of organisations from outside the continent investing in manufacturing facilities to produce goods within the AfCFTA.

“Ultimately because of that, we charge lower import duties by the receiving countries, which means we will grow trade among us (Africa).”

Coetzee mentioned technology would play a vital role in the projected growth, particularly around the production of goods and financial transactions among the African countries.

“This is a massive opportunity for all of us.”

In his keynote presentation at the summit themed, Orchestrating a Brighter World”, he mentioned Africa was lagging behind other blocs in intra-continental trade, with 15 percent.

Comparatively, the figure is 67 percent for Europe, 58 percent for Asia and 48 percent for North America.

According to experts, non-tariff barriers, including uncoordinated bureaucratic procedures, long waiting times at borders or lengthy and cumbersome export requirements hinder trade within Africa.

AfCFTA is hailed as one of the largest free trade areas since the formation of the World Trade Organisation in the mid-1990s.

This is given Africa’s current population of 1,2 billion people, which is expected to grow to 2,5 billion by 2050.

– CAJ News

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