“With the pooling of 55 economies collectively worth USD3.4 trillion, the AfCFTA stands to be the largest free trade area in the world. Its primary goal is to have a single African market. Eswatini can exploit a market with about 1.4 billion potential consumers. The AfCFTA, if implemented effectively, could raise about 30 million Africans out of extreme poverty, including the approximately 70% emaSwati living below the poverty line”
Photo Credit: https://au-afcfta.org/
Guest Writer– Thembela Msibi – (Independent Continental Youth Advisory Council on AfCFTA)
The African Continental Free Trade Area (AfCFTA) has been deemed Africa’s golden goose. With the pooling of 55 economies collectively worth USD3.4 trillion, the AfCFTA stands to be the largest free trade area in the world. Its primary goal is to have a single African market pursuant to fulfilling Agenda 2063. The continent is the second most highly populated region in the world, ipso facto, Eswatini can exploit a market with about 1.4 billion potential consumers.
The World Integrated Trade Solution (WITS) posits that Eswatini exports to these top 5 countries in 2019: South Africa, Kenya, Nigeria, Mozambique, and Tanzania. This proves that it is already a significant player in intra-African trade. However, the Index of Export Market Penetration was 0.35 in 2019, indicating low market penetration for the country’s exports. The remedy may very well be the AfCFTA, which Eswatini signed and ratified.
It was, thereafter, announced the regional headquarters of the AfCFTA, presenting the state with an opportunity to become a regional economic hub. According to the World Bank, the AfCFTA, if implemented effectively, could raise about 30 million Africans out of extreme poverty, including the approximately 70% emaSwati living below the poverty line.
“Not only will the AfCFTA eliminate quantifiable barriers to trade, it also seeks to remove non-tariff barriers (NTBs). Women, who form the majority of cross-border traders, will be protected from vulnerabilities through the formalisation of their trade through the AfCFTA”
The free trade area has been declared a vehicle for Africa’s industrialization. The focus will shift from FDI readiness to export product development. Small industries can be capacitated to compete internationally whilst foreign companies can be regulated to give local industries room for growth. This will require the weeding out of policies with adverse outcomes on Micro-, Small, and Medium-sized Enterprises (MSMEs).
These MSMEs will strengthen regional value chains, even by becoming suppliers of big businesses or by exploring new markets. Infrastructure development – physical and technological – will also incentivize them, making intra-African trade an appealing venture. Eswatini’s digitalization is underway, although possibly slow due to the high costs of internet bundles for smart devices.
Not only will the AfCFTA eliminate quantifiable barriers to trade, it also seeks to remove non-tariff barriers (NTBs). Women, who form the majority of cross-border traders, will be protected from vulnerabilities through the formalization of their trade through the AfCFTA. Existing barriers to cross-border trade will be eliminated significantly. With the proposed removal of tariffs on 90% of goods, commodities will no longer be as expensive to purchase.
“These MSMEs will strengthen regional value
chains, by becoming suppliers of big businesses”
At the moment, Eswatini is a member of the Southern African Customs Union (SACU), whose receipts accounts for the better part of the country’s revenue. The AfCFTA is a foundation for a continental customs union. Its implementation begins with neighbours cooperating to intentionally create a continent-wide trade neighbourhood. A good reference is the Namanga One-Stop Border Post that borders Tanzania and Kenya, where the process of migration is completed in one building and in one go.
Each desk or office sits both Tanzanians and Kenyans and by so doing, the movement of persons and goods is cut short. Eswatini’s biggest importer in South Africa. As a landlocked country, efforts should be made to reduce the red tape associated with transportation, whether of goods or of persons.
Statistics show that Africa is the youngest continent in the world. Therefore, sustainable development is framed by the institutionalization of youth inclusion. The Independent Continental Youth Advisory Council (ICOYACA) is a youth body mandated to facilitate the involvement of young people in AfCFTA processes. The ICOYACA Eswatini Chapter has the mission to mobilize and empower Eswatini youth to participate in intra-African trade.
The nucleus of the AfCFTA is integration, as such, it is imperative to leverage available partnerships that will help to accelerate business growth for cross-border trade. This is indeed a great opportunity for Eswatini and the rest of Africa to effectuate what the past African philosopher-kings envisioned for the continent: a united Africa.
Thembela Msibi is a member of the Independent Continental Youth Advisory Council on AfCFTA. She holds a Bachelor’s Degree in Social Sciences (Political Sciences & Public Administration) from the University of Eswatini.