Eliminate Non-Tariff Barriers to boost intra-African food trade
East African Community Headquarters, Arusha, 12th July, 2023: African Union Members States have been called upon to adopt policies to encourage intra-African trade in food production by among other things removing Non-tariff Barriers (NTBs) that currently make imports from outside the continent costly compared to locally produced food.
AU Member States were further urged to invest in irrigation agriculture by moving away from the reliance on rain-fed agriculture.
African countries were called upon to adopt policies that motivate the youth to take part in agriculture to ensure increased production and reduce food insecurity.
These were some of the resolutions by the 14th African Union High Level Private Sector Forum that was held at the Kenyatta International Convention Centre in Nairobi, Kenya from 10th – 12th July, 2023.
The forum further encouraged AU Member States to build resilient food systems which are climate resilient by employing technologies which promote investments in technologies that also address post-harvest losses.
The three-day forum vouched for Public-Private-Partnerships to promote partnerships for ensuring sustainable financing and management of national and regional agro-industrial parks and regional value chains.
Member States were encouraged to align their agribusiness priorities in line with the Malabo and Maputo declarations and the Comprehensive African Agriculture Development Programme (CAADP).
The forum resolved that investments in transport and logistics should be supported to ensure agribusinesses are scaled up and sustainable to ensure food security in the African continent.
On ensuring access to reliable and affordable energy supplies, the forum urged AU Member States mobilize additional financing towards enhancing the participation of Independent Power Producers (IPPs) upon providing subsidies and other incentives as to increase energy access in Africa.
The forum called on AU Member States to ensure technologies are upgraded to address power leakages that arise from poor metering and delayed replacement of meters.
AU Members were further urged to invest in essential energy infrastructure at the same time remove barriers to private investors with interest in this sector.
The forum urged the African Union Commission (AUC) to develop guidelines to accelerate mobilization of additional resources to accompany private sector actors to participate in IPPs within the energy sector in Africa.
Private Sector Actors were advised to develop a community of best practice sharing and networking amongst IPP enterprises in Africa.
On the role of digital trade and its implications for African economies, AU Member States were asked to adopt the development of electronic payments and settlement systems and harmonise user fees on mobile money payments.
Member States were urged to promote Public Private Partnerships (PPPs) in order to leverage limited resources, skills and technologies.
The forum called upon Member States to promote the uptake of digital literacy and other critical skills and business to people networks.
The forum called for a mindset change on products made in Africa as well as develop and harmonise digital portals in order to improve content and quality of products at both regional and continental levels.
To transform the productive capacities of the textile and apparel industry in Africa, develop innovation centres in the five (5) African regions to promote African fashion based on the common cultural identity.
Member States were urged to adopt policies to ban the importation of second-hand clothes on account of their deleterious impact on the garments and apparels home industry and their health-related negative effects on people, in addition to appropriate policies that support the development of the value chain.
The forum called for investment of substantial budgetary resources in the garment and apparels sector while emulating the best practices of countries that have taken this path such as those in East Asia and other parts of the world.
The AUC was called upon to Promote the consumption of local African textiles through the integration of African fashion shows into major African events.
African designers were asked to be consistent in their products to effectively compete on the international market and to promote offshoring of African Brands elsewhere on the continent.
Speaking at the forum, H.E. Albert M. Muchanga, the AU Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, called for increased investment in productivity if the African continent was to realise the full potential of its huge population and vast natural resources.
Amb. Muchanga observed that despite Africa having an almost equivalent population to China, Africa’s share of the global GDP was just 3% compared to 18% for China.
“Africa’s share of global trade is just 2.7% as opposed to 20% for China. The difference lies in productivity, productivity and more productivity,” said Amb. Muchanga.
In his remarks, EAC Secretary General Hon. (Dr.) Peter Mathuki urged African countries to promote local content withing their economies to boost intra-African trade and the continent’s share of global trade, adding that there was a lot of potential for growth.
“The United States total GDP is US$23 trillion while the Democratic Republic of Congo’s wealth is US$26 trillion if it was well used. Africa has the potential to grow its economy to US$100 trillion if it is fully exploited,” said Dr. Mathuki.
Dr. Mathuki urged African countries to establish their own annual economic forum where they could set the economic agenda for the continent, noting that whatever is developing the rest of the world comes from Africa even as the continent remains poor.
The Secretary General said that the Private Sector can play a vital role in promoting intra-African trade in four (4) key areas, namely: services trade, digital trade, infrastructure development, and climate action and green transition.
Dr. Mathuki said that the services sector, which represents over 60% of world GDP and more than 50% of employment worldwide, holds great potential for Africa's growth, adding that in the EAC, services are the leading contributors to GDP.
“The region has witnessed significant growth in services exports since the establishment of the EAC Common Market in 2010, and policy reforms have been implemented to boost regional cross-border investments in the financial sector. Such efforts have reduced barriers for service providers, enabling them to export their services more efficiently,” said Dr. Mathuki.
“To unlock the full benefits of the dynamic and fast-growing services sector within the continent, there is a need for regulatory reforms to eliminate barriers faced by service providers and enhance the productive and export capacity of African services firms,” he added.
Dr. Mathuki urged the continent to expedite the adoption of an African passport to ease intra-continental trade and the free movement of persons across the continent.
“With an African passport, we will avoid the current situation where one has to get almost 60 visas when travelling across the continent,” adding that there was also an urgent need for a common currency to be used throughout Africa to ease intra-continental trade.
On Digital trade, Dr. Mathuki said that there are an estimated 250 million small and medium-sized enterprises (SMEs) in Africa.
“By reducing the cost of cross-border transactions and making it easier for businesses to reach new markets, digital trade will help to level the playing field for SMEs. The EAC has prioritised measures to promote digital trade by harmonizing payment systems, enhancing digital trade facilitation and logistics, and ensuring an enabling legal and regulatory environment. It is imperative that we seize these opportunities to harness the full benefits of the digital economy,” said the Secretary General.
On infrastructure, the Secretary General said that Africa needs to invest US$130-170 billion annually in infrastructure to bridge the current gaps.
“By mobilising public and private sector resources, we can accelerate infrastructure development, enhance regional connectivity, and facilitate trade and investment across the continent and tap into the potential of our combined GDP of USD 3.4 trillion,” he said.
“I urge African governments to invest in infrastructure projects that will help to reduce the cost of doing business and connect businesses across the continent,” he added.
“Infrastructure is what transforms economies so we need to think about establishing one airline that traverses the entire continent. Also urgent is the need for One Network Area to ease communication,” he said, even as he urged the private sector to be innovative in running with such ideas.
On climate action and green transition, Dr. Mathuki said that Africa needs to close its climate finance gap by annually increasing private sector financing by 36% until 2030.
“This requires addressing both demand-side and supply-side barriers and developing innovative financing instruments. We must strengthen local content and value addition, build institutional capacity, and create regional value chains to fully realise Africa's natural endowments,” said Dr. Mathuki.
Also present at the forum were Dr. Amany Asfour, the President of the African Business Council, the EAC Deputy Secretary General in charge of Customs, Trade and Monetary Affairs, Ms. Annette Ssemuwemba, and Mr. Simon Kaheru, Member of the Board of Directors of the East African Business Council.
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About the East African Community Secretariat:
The East African Community (EAC) is a regional intergovernmental organisation of seven Partner States, comprising the Republic of Burundi, the Democratic Republic of Congo, the Republic of Kenya, the Republic of Rwanda, the Republic of South Sudan, the Republic of Uganda and the United Republic of Tanzania, with its headquarters in Arusha, Tanzania.
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