27 January 2021 – The World Economic Forum’s Regional Action Group for Africa has released a study to accelerate free trade and finds ways to boost intra-Africa trade.
In early 2020, the foremost chief executives, public figures, civil society representatives and experts on Africa convened to share and define a regional vision and drive action based on the region’s needs and priorities. Yesterday, the World Economic Forum’s Regional Action Group for Africa released its first report on how policy-makers can accelerate free trade following the ambitious Africa Continental Free Trade Area (AfCFTA).
The paper reviews the impact of the COVID-19 pandemic on Africa’s supply chains and provides policy advice for accelerating the expansion of regional value chains in emerging manufacturing economies in Africa, with special focus on the automotive industry
It identifies two routes towards economic recovery and building resilience and indicates that Africa can empower a self-supportive regionalism through enhanced intra-African trade. Read Connecting Countries and Cities for Regional Value Chain Integration – Operationalizing the African Continental Free Trade Area (AfCFTA)
On 1 January 2021, the African Union launched the Africa Continental Free Trade Area (AfCFTA), the world’s biggest free trade area and Africa’s most ambitious and recent effort to liberalise trade. The World Economic Forum’s Connecting Countries and Cities for Regional Value Chain Integration – Operationalising the African Continental Free Trade Area (AfCFTA) released yesterday analyses the impact that COVID-19 has had on Africa’s supply chains.
Developed by the World Economic Forum’s Regional Action Group for Africa in partnership with Deloitte, the report provides policy advice for accelerating the expansion of regional value chains in emerging manufacturing economies such as the automotive industry.
The paper is part of a series investigating five ways to drive economic recovery and build resilience in the context of the AfCFTA agreement namely:
“The African Continental Free Trade Area holds immense potential for the social and economic development of Africa. Renewing the rules of trading will facilitate better cooperation to boost growth, reduce poverty and broaden economic inclusion,” says Børge Brende, President of the World Economic Forum. “This timely report of the Regional Action Group for Africa presents detailed insights and recommendations on how to advance public-private collaboration on regional integration, with a view of deepening and strengthening regional value chains,” says Brende.
“It is perhaps the most ambitious free trade project since the creation of the World Trade Organisation itself. Actively promoting trade liberalisation to encourage new areas of growth is a pragmatic response to the reduction in global trade due to the Covid-19 pandemic and will position Africa as an enhanced destination for investment from multinationals”, says Martyn Davies, Managing Director of Emerging Markets at Deloitte Africa. “Although the continent can do little to counter the global forces inclining towards deglobalisation, it can embrace a self-supportive regionalism through enhanced intra-African trade,” says Davies.
Insufficient and inert inter-linkages between African economies have exacerbated the impact of the Covid-19 pandemic on the continent’s supply chains. Yet, from local production of essential products to improving port and customs efficiencies – often flagged as a challenge in Africa – the response to the pandemic illustrated how meaningful impact is created through collaborative efforts. Successfully implemented, current efforts by the African Union will stimulate trade as well as deepen and create new regional value chains in Africa. Lessons learned should be applied to improving production capabilities in other industries so that economic and trade benefits can be realised.
The paper places emphasis on the automotive sector as a case study as advances in that industry have the potential to set the tone and pace for other sectors to mobilise and create stronger integrated regional value chains. The industry is on the cusp of an evolution, with advances in electric and autonomous vehicles and transformations in mobility, but as Africa builds its automotive industry, it should focus on development that promotes innovation and drives adoptions that will be sustainable for the growth and development of the sector.
In response to the existential crises posed by the Covid-19 pandemic, the World Economic Forum launched the Regional Action Group for Africa (RAGA) in April 2020, with an objective of urgently tackling the unfolding health and socio-economic crisis in the region, and jointly chart and shape recovery efforts. RAGA includes 52 active community members.
The Davos Agenda is a pioneering mobilisation of global leaders aimed at rebuilding trust to shape the principles, policies and partnerships needed in 2021. It features a full week of global programming dedicated to helping leaders choose innovative and bold solutions to stem the pandemic and drive a robust recovery over the next year. Heads of state, chief executives, civil society leaders, and global media will actively participate in almost 100 sessions covering five themes.