By: Mpho Shelile
The global economy was left in turmoil due to the COVID-19 pandemic, creation of the vast African Continental Free Trade Agreement (AfCFTA) regional market is a big opportunity to help African countries diversify their exports, accelerate growth, and attract foreign direct investment.
As part of the ongoing series on important trade agreements, ministry of trade industry and business development in collaboration with UNDP held a sensitization workshop for media practitioners in Lesotho with the intention to provide key insights of the African Continental Free Trade Agreement at State Library last week Wednesday.
Mrs. Nthabeleng Maphike in her opening remarks indicated that AfCFTA was implemented to enhance economic growth nationally and internationally. “With the 47 countries that have ratified the agreement, the AfCFTA will provide a wider market access for Lesotho’s exports while facilitating access to inputs”, adding that they will provide consumers with a wide choice on cheaper goods.
She further urged the media to raise awareness about AfCFTA to all stakeholders, so that they gain interest and take part in the agreement and to also encourage all Basotho to take part in the initiative. “I believe that implementing AfCFTA will help usher in the kinds of deep reforms necessary to enhance long-term growth in Lesotho and other African countries.”
Letlotlo Motanyane Independent Continental youth Advisory Council on the AfCFTA and ICOYACA elaborated that, “AfCFTA is a free trade area that covers almost the entirety of the African continent. It was brokered by the African Union (AU) and signed on March 21, 2018, in Kigali, Rwanda. The agreement aims to create a single market for goods and services in Africa, facilitate the free movement of people, and spur economic growth and development across the continent.”
2023 is a pivotal year for the AfCFTA, as it not only means accelerating the necessary infrastructure and putting in place functional systems, but it also offers the continent an exceptional opportunity to fully activate the existing policy instruments that envision placing women and youth at the center of the African agenda. In conclusion, the AfCFTA is a game changer for global trade agreements. The agreement has the potential to significantly boost economies, reduce poverty, promote gender equality, and improve governance.
He stated that there are non-tariff barriers (NTBs) which include mechanisms such as technical barriers to trade that take a form other than tariffs or customs duties – which are prohibited under the AfCFTA, but their removal will be a long process. Traders are able to submit online complaints about NTBs to the Continental Non-Tariff Barrier Mechanism, from there they will be passed to government officials charged with eliminating them, but to date very few submissions have been made.
“In addition, opportunities to obtain accessible and market-driven credit and finance for formal and informal women- and youth-led enterprises are often limited. This is due to an assortment of reasons such as low levels of financial literacy, inaccessible and difficult-to-understand financial information, collateral constraints, lack of variety in financial products, punitive interest rates with limited financing options, and unfavorable loan application procedures”, he concluded by adding that even though AfCFTA was implemented in 2021, but then most African countries were not ready to begin trading. So they created a guided trade initiative (GTI) program which would be used to guide all countries to trade.
Secretary General of ICOYACA, Mr. Tefelo Nicolus Kele stated that AfCFTA represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion. Implementing AfCFTA would create a single, continent-wide market for goods and services, business and investment would reshape African economies. The implementation of AfCFTA would be a huge step forward for Africa, demonstrating to the world that it is emerging as a leader in the global trade agenda.
“AfCFTA has the potential to increase employment opportunities and incomes, helping to expand opportunities for all Africans. The AfCFTA is expected to lift around 68 million people out of moderate poverty and make African countries more competitive. But successful implementation will be key, including careful monitoring of impacts on all workers—women and men, skilled and unskilled—across all countries and sectors, ensuring the agreement’s full benefit”, said Mr. Kele.
AfCFTA agreement will create the largest free trade area in the world measured by the number of countries participating. “The pact connects 1.3 billion people across 54 countries with a combined gross domestic product (GDP) valued of US$3.4 trillion. Which means that this has the potential to lift 30 million people out of extreme poverty, but achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures”, he concluded.
John Tsatsi, indicated that while he was in Zambia representing the youth of Lesotho at a youth symposium which was held earlier this year, he discovered that the African Continent has the biggest youth population, even though, the youth face difficulties in accessing formal employment and decent jobs, forcing them to engage in entrepreneurship and starting small businesses in the informal sector.
However, as the youth, unlocking the potential of cross-border trade is strategically essential to women’s empowerment and the youth, “I believe that equipping the youth and women with the necessary skills to work and grow is one way of improving economic growth. We need innovation labs for the youth of Lesotho so that we go into the trading industry well aware of how it operates. I know that it is not that Basotho do not want to trade, we just lack knowledge about it and we fear what we do not know”, he said.
“AfCFTA is one of the most innovative, dynamic, and advanced trade agreements on harnessing the power of women and youth. The willingness to give special momentum to free trade in 2023 is evidence of a strong commitment by African leaders who now need robust operational instruments to be deployed professionally to realize the expected transformation of people’s lives in our lifetime”, he concluded by urging the youth of Lesotho, and the stakeholders to take part in the economic growth of Africa and help end poverty.