COVID-19: PwC urges African Union to begin implementation of AfCFTA

Fri, Jul 17, 2020
By publisher
5 MIN READ

Economy

By Anayo Ezugwu

AS the African continent battles Coronavirus, the PricewaterhouseCoopers, PwC Nigeria, has advised African Union to begin the implementation of the African Continental Free Trade Area Agreement, AfCFTA. PwC says this is a good time to start implementing the AfCFTA because it will enable African countries to cooperate on all levels, especially in the context of the current Coronavirus pandemic.

PwC Nigeria in its latest report titled: ‘COVID-19 and the African Continental Free Trade Area Agreement,’ said a strong commitment and joint action by the continent’s leaders would undoubtedly benefit the fight against the pandemic and its economic consequences for Africa post-COVID-19. It regretted that the pandemic is happening during the critical phase of the CFTA agreement when the implementation of the free trade area is less than a year to commencement.

According to the report, the pandemic can turn into a ‘blessing in disguise’ if proper strategies and policies are put in place by the various countries. It stated that in many ways, the pandemic is an opportunity for African people to see themselves differently and the world to consider the African continent as a partner in finding solutions to complex problems such as COVID-19.

“While this new crisis may be another challenging time for Africa after the pandemic has ended, the continent will have the chance to become more autonomous and self-reliant. This will be the time to lay the foundations of economic reforms that give priority to African markets, innovation and local manufacturing.

“Initial actions in Africa have focused on slowing down the spread of the pandemic with different Measures, including border closures. Such actions come as the continent has made bold steps towards greater economic integration. The coronavirus could pose a risk for the continental project, but leaders could also turn it into an opportunity for stronger collaboration, if certain policies are pursued quickly.

“COVID-19 shows that self-sustainability matters and is important mostly for food security, education healthcare and logistical services. An objective of the CFTA is to make the continent self-reliant in these sectors and signatories to the Agreement need to develop a framework and set realistic implementation plans to improve these key sectors irrespective of regional integration. Rather than close borders that can send a negative signal to the progress of the Agreement, governments can reduce human flows, while keeping borders open to key goods and services required for national development and economic sustainability.

“In this case, border management agencies are tasked to ensure movement across borders met the business and economic criteria set by the Nigerian government. This will signal continued belief in the importance of economic activities and trade in provision of goods and services that people need to continue their daily lives. This will require quick and timely decision making supported by accurate and credible data available to policy makers. Such management information systems, MIS, should include economic, social, environmental, health, cultural, governance and technology data that are key requirements for effective competition within the CFTA,” it said.

The report stated that countries like Nigeria need to consider fiscal sustainability in terms of focusing efforts in key areas where the country has biggest impact such as rails, ports in order to optimise the country’s resources. “This could be achieved through public and private sector collaborative efforts.

“One important question Nigeria must ask in these uncertain times is how its digital economic strategy – National Digital Economy Policy and Strategy (2020-2030) proposed by the Ministry of Communication and Digital Economy and The Smart Nigeria Digital Economy Project proposed by the Nigerian government can sustain economy interactions and development in the face of a pandemic. The CFTA will be competitive and countries like Egypt with three active digital strategies (National E-Commerce Strategy, Strategy for Social Responsibility in ICT, and Digital Arabic Content Strategy) would have an edge over countries in the market with weak or no digital framework to support trade in goods and service within the market.

“Going into the AfCFTA post COVID-19 requires Nigeria as well as other African economies to build a digital economy to foster production of higher quality goods and services at reduced costs. This will open new channels for value addition and broader structural change. To sustain this process in the continent, there is a need to develop and/or upgrade the digital infrastructure, digital financial services, digital entrepreneurship and digital skills that are thematic pillars of the Digital Economy for Africa (DE4A)15 to encourage trading digitally across individuals, SMEs and Governments.

“Countries that can get this development requirement could compete effectively within the CFTA. Clearly, Information Technology, IT, support was not considered as an essential service during the lockdown. Each government needs to review its Information Technology plan in line with economic digitalisation before trading in the CFTA begins in 2021 as it is now clear that globalisation has gone online

“The Intra-African market could help to mitigate some of the negative effects of COVID-19 by limiting its dependence on external partners, particularly in food and pharmaceuticals. As a result, COVID-19 demonstrates the importance of implementing AfCFTA, and the current momentum needs to be maintained as a mechanism for building resilience and managing long-term volatility. A well-executed AfCFTA would go a long way in reducing Africa’s reliance on donor funds and external aid in a global or continental recession.”

– Jul. 17, 2020 @ 18:35 GMT |

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