African Continental Free Trade Area (AfCFTA )will create the largest free trade area in the world - connects 1.3 billion people across 55 countries.
The Exchange: Why AfCFTA has the potential for job creation in Africa
Small and medium entrepreneurs stand to transform Africa's informal sector which brings vast value for parties eyeing to invest in Africa
African Continental Free Trade Area (AfCFTA ) could be a way out for Africa’s unemployed and leeway for people seeking to invest in Africa as well as transform jobs in Africa.
Africa is home to the youngest population in the world. The United Nations points out that sub-Saharan Africa has 70 per cent of its population under 30. Numbers are excellent tools when it comes to analysing scenarios. Hence Africa has enough human capital to propel its growth.?
Africa’s growth can only be realised if young minds across the region are fully empowered and utilised effectively for the betterment of the continent. The UN finds young people essential in building better economic systems and fuel sustainability.??
Sadly, the youth are facing a much grimmer reality—unemployment. Nearly 60 per cent of the youth population in Africa are unemployed.?
However, the state of young people is dire when that segment of the population decides to work within the realms of the informal sector—which is highly unregulated, unprotected and overly populated.?
By 2020, the sector will account for 80.8 per cent of jobs, the primary source of employment and the backbone of economic activity in urban Africa (World Bank).??
Further, the numbers show how many job creation scenarios are tricky yet doable. The urban informal economy is widespread among youth (95.8 per cent ages 15 to 24) and women (92.1 per cent) and is an essential contributor to poverty reduction (World Bank).?
Most young people are now migrating towards urban areas and opting for street vending, which caters for their daily bread and secures their future.?Africa has the potential to maximise available tools and resources, mainly through the AfCFTA.??
Job creation in Africa?
Africa is expanding fast—its population is growing more quickly than available resources to cater to their working aspirations.??
The Foreign Policy – a global magazine of news and ideas in its October 2021 publication – warned Africa’s unemployment is becoming a big concern. Africa has six nations with the highest unemployment rates: South Africa (35.30 per cent), Nigeria (33 per cent), Lesotho (24.60 per cent), Gabon (22.30 per cent), Somalia (19.8 per cent) and Tunisia (16.10 per cent).??
According to the World Bank, Africa’s working-age population is expected to grow by 450 million by 2035. Still, new analysis shows that without effective policy change, there will be only about 100 million new jobs for this growing cadre of working people.???
“With the right combination of policies implemented speedily and effectively, Africa can turn its growing working-age population into a “demographic dividend” in which incomes rise, families can save and invest, cities offer affordable housing, productivity rises, and more investments can take place,” according to World Bank.?
Most nations with the highest unemployment rates have high levels of impoverishment, inequality (South Africa, for instance) and some institutional setbacks that limit the effective execution of social protection and services projects.???
The World Bank argues that failure to strengthen government institutions, improve infrastructure, and promote near- and long-term job creation will lead to a widening gap between the rising population and available employment.?
The African Development Bank (AfDB) finds the present situation to be a breeding ground for success, as it could spur rapid development. Hence, policy reforms are essential in improving the quality of institutions, infrastructure, skills and adoption of new technology.??
In that context, available tools before Africa, such as AfCFTA, give the continent ample room to stretch its abilities to maximise wealth creation across the young population from both ends—informal and formal sectors.?
AfCFTA potential?
?The AfCFTA presents a significant opportunity for African countries to bring 30 million people out of extreme poverty and to raise the incomes of 68 million others who live on less than $5.50 per day.?The AfCFTA is the new anchor to pull multinationals to invest in Africa.
This agreement not only brings hope to African governments but also encourages current efforts on the ground, which improve jobs in Africa.??
The World Bank points out that the AfCFTA 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 55 countries with a combined gross domestic product (GDP) valued at $3.4 trillion.???
It 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.?
The single continent-wide market is essential for vast products and services produced by the informal sector and the innovation developed within the formal sector by highly knowledgeable young African minds.?
The numbers speak for themselves and affirm the potential that AfCFTA leverages to improve people’s lives across the region.??
Further, the agreement will spur more significant wage gains for women (10.5 per cent) than men (9.9 per cent). Additionally, it is argued that the agreement will boost wages for both skilled and unskilled workers—10.3 per cent for unskilled workers and 9.8 per cent for skilled workers.??
For instance, in Tanzania, farming as an informal activity is the largest employer, contributing at least 27 per cent of GDP. This sector stands to create decent jobs across the value chain, particularly in distribution and supply, storage and marketing as Tanzania expands its food production muscles across East African markets. Farming is one of the contributors towards jobs in Africa.
The advent of modern technology has spurred the uprise of digital solutions that address farmers’ market access cries. With the presence of AfCFTA, mobility restrictions are no longer obstacles; thus, Africans can express their ingenuity freely across various market points.?
Companies such as Agritech and Sustainable Agriculture Tanzania are at the forefront of transforming farming practices to small-scale and medium-scale commercial farmers, who stand to reap billions as Tanzania’s grains begin to dominate other regional markets such as Juba, DRC and South Sudan. Hence, Tanzania is one of the African nations streamlining good reasons why companies ought to invest in Africa.
Mobile money services are another new normal in Africa. Needless to say, the sub-sector has transformed jobs in Africa. Transformational and cross-boundary fintech services from Tanzania’s Nala and PesaKit in Kenya are now bridging the gap between the unbanked population and conventional, decent financial services.??
领英推荐
AfCFTA?kick-starts the efforts towards poverty alleviation by providing available business solutions and innovations for growth across other regional emerging markets.??
Agri-startups such as Kilimo Fresh from Tanzania uplift farmers’ efforts by connecting smallholder farmers and produce buyers to reliable markets in the region (particularly Rwanda), enabling buyers to access better-quality and fresh produce directly from farms at affordable prices, and have it delivered directly to their locations (Disrupt Africa).?
The agreement comes to the table to inspire mushrooming industries in developing economies, such as the creative industry, which is currently the new money to expand and grow. Now more than ever, entertainment is topping the export list as consumers of arts keep growing and demand content that crosses borders. This is the right time to invest in Africa and amp up job creation.
READ:?
++++++++++
World Bank: Preventing Money Laundering and Terrorist Financing: A Practical Guide for Bank Supervisors
The COVID-19 (coronavirus) crisis was a reminder, if any were needed, that criminal creativity thrives in times of chaos, exploiting people’s fears. Unsafe face masks, counterfeit drugs, and suspect medical equipment flooded the market, touted as miracle cures against the coronavirus by unscrupulous actors wanting to turn a quick profit. Companies with no record in health won big government contracts and, as people’s situation deteriorated, organized crime stepped in to lend a “helping hand” to those suffering financial distress. Where most people saw a global public health and economic crisis, criminals saw an opportunity. What this criminal behavior, indeed almost all financial economic crime, has in common is that the funds involved move through the formal financial system. The service providers that execute those transactions are in a good position to gather firsthand intelligence on what is happening. For this reason, banks and other financial institutions have anti-money-laundering and countering the financing of terrorism (AML/CFT) obligations to find out who is paying whom and why and, if necessary, to alert the authorities. Financial institutions are the first line of defense against this criminal behavior; they are the gatekeepers to the international financial system.
+++++++++
Atlantic Council.
Please find below the recaps of the major events the Atlantic Council’s Africa Center hosted at the St Regis in New York on the sidelines of the 77TH United Nations General Assembly, on September 19th:
Niger.
A conversation with the President of the Republic of Niger, Mohamed Bazoum
President Bazoum joins us on the sidelines of UNGA to discuss the enduring conflict in the Sahel, the future of the G5S Alliance, partnership with the US, and what lies ahead for Niger amidst conflict with extremists and global migration challenges.
At a time when instability and jihadist offensives continue to afflict the Sahel, Niger is a strategic actor in the region. The withdrawal of French and European forces and a renewal of the United Nations Multidimensional Integrated Stabilization Mission in Mali?places Niger in a dynamic setting.
The Africa Center spoke with Nigerien President Mohamed Bazoum on the sidelines of the 77th UN General Assembly. The conversation—opened by Atlantic Council President and CEO Fred Kempe,?moderated by Africa Center Senior Director Rama Yade, and followed by a panel consisting of Africa Center Senior Fellows Michael Shurkin and Abdoul Salam Bello—touched on topics like education and youth employment, security and Russia, climate, energy, and the upcoming US-Africa Leaders Summit.
In discussing high birth rates among young women in Niger, Bazoum said he wanted to improve education for girls: “The first strategy will be to improve the educational system,” he commented. He further added that, in improving the educational system, the “first thing we have identified is the bad quality of the teachers. We need to rethink our teachers’ training.” Bazoum was hopeful that these steps in adjusting the training of teachers throughout the country will heighten young girls’ access to and quality of education.
Yade further inquired about the issue of youth employment and the solutions for creating jobs in the country. Bazoum prefaced his response, saying that the issue of youth employment is “an extremely complicated problem” and that without stable employment opportunities, “more young people [may] go in the ways of violence.” The conversation highlighted the importance of agriculture as a form of employment for many Nigeriens. As a solution, Bazoum stated that the country would “create agro-industrial ports… that will enable the young people to remain in the country.” He further added that “it is the promotion of agriculture through modernizing it that will help.”
While many international observers continue to monitor the security situation in the Sahel, Shurkin asked Bazoum how Niger is responding to security threats across the border in Mali and what the United States can do to support Niger in these efforts. “You will notice that in three full years, we haven’t been attacked,” stated Bazoum. He highlighted recent developments in the Nigerien armed forces, which increased its capability to defend against national security threats. “We don’t have to do anything on that side of the border [for] the same threats,” he stated. “This is because of the way we decided to position our armed forces.” When asked how the United States can support these efforts, Bazoum noted, “we benefit from great quality training and the equipment that comes with [it].” He emphasized the significant contributions made by the United States in this regard—and highlighted the need for more.
As the war in Ukraine continues to exacerbate challenges on the African continent pertaining to food security, Shurkin asked Bazoum about the degree of Russian influence in Niger. Bazoum stated that he believes the issue of Russian influence is not significant in Niger, saying, “to be honest, I don’t perceive something important to talk about or to denounce.” He continued, saying “we perceive certain activities on social media that apparently come from the actions of the Russian government, but in Niger… this is not a sensitive point.” According to him, Russia does not play a prominent role in Niger.
Following Shurkin’s questions, Salam Bello asked Bazoum questions about the upcoming United Nations Conference of the Parties in Egypt. He stressed that the debate on climate change “isn’t an equal debate,” but rather one whose scales are “not in favor to poor countries” which are the most impacted by the effects of climate change. Furthermore, he discussed the high availability of coal within Niger; however, he argued that certain “strict” measures have been imposed on the country that inhibit its potential to exploit these sources because “there are no more companies that have access to the necessary credits.” Regarding the upcoming conference, Bazoum stated he is “skeptic about the ability to really agree” among countries. His comments pointed to the larger debate about inequities concerning the global climate struggle.
Recent positive developments in Niger in education, security, and employment suggest that the situation in the Sahel may be on an upwards trend. As it stands, the international community must wait and see if other countries are open to following Niger’s example.
Caitlin Mittrick is a young global professional at the Atlantic Council Africa Center and a graduate student at the George Washington University Elliott School of International Affairs.
The End+++++++++++