AFCFTA - The New Africa & The Promising Private Sector

Building a strong economy, providing security of investments and improving the welfare of citizen have been really challenging but these are the tasks which the African Union leadership must undergo.

Which urgent steps do we need to boost the Private Sector and encourage rapid growth of SMEs under Africa Continental Free Trade Agreement?

Let’s have a critical look and open a fair conversation on this vital issue affecting over a billion lives in Africa.

We are taking a look at the current state of affairs, the rising horizon, the burning flame, realities on ground and where actions are needed to open the fountain of fortune for Africa's SMEs, the Private Sector and massive exploration of new opportunities of spanning rapid growth of Africa's Common Market.

Since the establishment of the Africa Continental Free Trade Area (Afcfta), many Africans are feeling the wind of changes. More expressively, some sense of belonging. That is the New Africa; The Africa We Want and the Billions’ Common Dream (BCD)

Although millions of people still don't understand what #Afcfta is all about but across the continent, the awareness is growing like the rising Sun, Africa is going nuclear both inside the continent and in the Diaspora, thanks to this Africa Union (AU) initiative which brought about the Afcfta in 2018.

The process is gradual, a work in progress; it needs time and may take many more years to bring full awaited economic transformation, but the results are already being felt through the ongoing massive infrastructural drive, policy reforms, sensitization, agitation from different groups of people and businesses busy interacting, brainstorming and working out formidable actions toward the common vision for Africa's sustainable economic progress.

Funding & Security Challenges:

Despite World Bank's forecast of 2.7% - 3.5% economic growth in Africa, the continent is projected to?grow by more than 5.5% on average in 2023-2024

Covid-19 constrains and the current global crises have also made their negative impact but nevertheless, Afcfta member states are embarking on massive investment drive, creating new policies to boost production, and distribution, despite constrains in mobilizing the needed funds for infrastructural development and logistics.

?As a result of numerous challenge in mobilizing funds for projects, governments are becoming more aggressive engaging the Private Sector in projects development. Many have realized that supporting the Private Sector is more efficient because, physical cash is subjective when the right moves are made on time, as every move is a signal towards a particular goal.

It is time to re-organize our monetary, financial or fiscal policies. Since Afcfta landed on the mainstream, smart initiative have been made by the collective efforts of Central Banks of member states; For example, Nigeria lunched the first Digital Currency in 2022, Ghana, Kenya and Zimbabwe lunched their gold coins to boost currency value and trade, new discoveries are also adding the moral and economic values to African economies. These trends, without any doubt will yield positive economic results and improve the socio-economic wellbeing of citizens, as more efforts are being made towards sustainable economic solutions.

As we expand our economic shores towards boosting Small and Medium size Entrepreneurships (SMEs) and the Private Sector in general, We must be ready to take the bull by the horn, decisively (quenching the devastating fire which continues to destroy our macro and micro economies).

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Quenching the Fire of Inflation

One of the greatest burning threats which our national economies constantly face is inflation. It unleashes poverty on the masses, crushes businesses, crumbling investments and devastating lives all over the continent. The killer inflation, which sometime goes hyper, is a recurring problem that must be strategically tamed. The inability of a government to fight inflation means surrendering the nation and the masses to a visible catastrophe because workers and businesses cannot only secure their hard earned income, but the state itself cannot secure and improve on the value of her resources.

Over the last 50 years, there have been enough experiences of what inflation has done to every single African country, yet the battle is unending and the more efforts made, the more tricky and blood thirsty inflation becomes, sucking everything, time, energy and resources of African people and nations.

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Building TRUST

Good enough there are known factors causing inflation, but as we continue to battle inflation across the continent, more attention must be paid to policy decisions, this is where professionalism in quality assessment of decisions and timely feedbacks with the public matter. Efficiency in service delivery always raise the level of trust between the government, business entities and the masses.

No matter how we talk about potentials, ?it is imperative that our SMEs and the whole Private Sector feel safe always; enjoy full government support through concrete and targeted measures, most especially when it comes to policy formulation and implementation. Even when there are no funds, African governments and the Central Banks must understand that “TRUST” is more important than a trillion dollar guarantee. There is no essence investing in business, if there is no enabling environment and Security which guarantee the return of investment or enable businesses to thrive. These are some of the key issues ringing bell in the mind(s) of an investor or potential investors.

Trust grows with the flow of accurate information, periodic reviews, through various communication systems where feedbacks reflect not only desire to fix issues, but show efforts being made to provide solutions and guarantee sustainability. These are powerful instruments to build legal frameworks for enabling environment.

?Financial Security grows stage by stage and every African Cent or “Diamo” invested matters. It's only with enabling environments and Security Africa will continue to grow massive confidence and yield desirable business and investment returns.

Security of Funds & Finances

In other to show how serious we mean business, I strongly believe that the African continent with over 1.5 billion people needs its own “HARD Currency”; and the time is now.

In other not to waste time I will suggest “Airo and Diamo”. Where, one Airo is equal to a hundred Diamo”

On my next article "Our Currency From The Heroes" We shall take a critical look at this, so as to avoid misconception and delusion that all will be well without true independence and a single common African currency.

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Conclusion:

With Afcfta and the Pan-Settlement and Payment System (PAPSS) in place, the Private Sector remains the vital engine, a universal power house to drive sustainable economic development and growth which Africa needs.

It's about massive job creation, technology, industrialization,

manufacturing, Agriculture and food processing, boosting intra-Africa trade,

dealing with logistics issues, Housing and construction, improving healthcare

and welfare of citizens and many more inter-related and integrated solutions for the benefits of African masses.

All these are interwoven processes, adding values to productivity because they

are cross-sectoral generators with massive catalyzers in between. Therefore, governments must, pay more attention and render reliable physical and moral support to the ensure strong Private Sector development and promote Intra-African Trade and cross border Investment, movement of people and goods.

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Rex Essenowo is a Business Economist.

A member Board of Directors & CEC of the Nigerian Diaspora Organisation, Europe. A stakeholder of the global Diaspora, multiple Award winner and strong advocate of the Afcfta.

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