Today’s global business landscape is experiencing an extended break in the norm. Many developed countries have shifted their efforts and resources inwards to beat economic situations. This survival instinct will soon take its toll on smaller dependent countries, which Africa happens to comprise of. To this effect, Africa has to borrow a leaf out of the wisdom of these developed countries. The truth is, Africa’s greatest ally in realizing Africa’s growth potential is Africa. Our ability to trade and do business within the continent is a sure-fire way to sustain ourselves, by ourselves. After all, to convince the world of Africa’s growth potential, we must first demonstrate our faith in our future.
Why Africa Must do Business with Itself
One of Africa’s most pressing problems is not that exports too little to other continents or it imports too much from other continents. The problem is that it imports and exports too little within itself. Only a tenth of African countries’ exports go to the rest of the continent. On the other hand, Africa exports about 60% to the European Union which then manufactures and exports back to Africa. The thing with intra-African trade is in maximizing trade deals that boost local economies and keep money within the continent, rather than sending it overseas. Africa has the raw materials and with the introduction of manufacturing, the continent can be making money from manufacturing for the world. This will drastically reduce the current expenses on imports and feeding the pockets of international brands.
Furthermore, Africa’s growing population can be exploited by Africa instead of external brands. A customer base of nearly 1 billion people provides regional trade opportunities and the gift of a broader market. Why look to provide solutions in other continents when nearby needs are unsolved and growing? Africa needs to buckle up its strive for industrial development plans to unlock the capacity for productivity.
What needs to be done?
- An inward and outward strategy focused on improving trade links and trade liberalization and integration. Simply put Africans should trade freely within African and put up a united front in trading with the rest of the world.
- Investments in cross-border infrastructure to enhance regional trading corridors. Regional trade growth is tied to access, and access requires open functional networks. The African Union’s Continental Free Trade Area (UNCTAD has so far championed this approach. In fact, the implementation of the CFTA will nearly double intra-African trade by early next decade.
- Unity of Purpose: Bodies like the Southern African Development Community (SADC), the Economic Community of West African States (ECOWAS) and the East African Community (EAC) have initiated this. However, for Africa to be greater than the sum of its parts, we must learn to work together. This includes joint development and economic policies, regulation, market structure and governance, along with their implementation.
- Rallying around South Africa: South Africa is in the unique position of holding membership to several multilateral fora. South Africa can champion the case for Africa; as the only African member of BRICS and only permanent African member of the G20. It is not about which country is oldest, biggest or the giant of Africa. Africa should rally around the country with one foot already in the door. With the support of the continent, South Africa will be empowered to push for the continent’s agenda at the nexus of discussions with international counterparts. Furthermore, South Africa’s track record in doing international business can be multiplied across all of Africa.
The aid vs trade debate has gone on long enough; Trade is the no-brainer. Africa’s own growth story can only be effectively driven and narrated by the continent itself. An Africa that can stand on its own two feet and become a valuable member of the international community – not a dependent of it. Now that, is an awe-inspiring sight!