#AfricaWeek2023: How research and innovation can accelerate the implementation of the African Continental Free Trade Area

Posted on May 24, 2023

So near and yet so far – this sums up the state of readiness for the implementation of the African Continental Free Trade Area (AfCFTA), which is set to become the largest free trade area in the world.

While Africa has made rapid progress in bringing the AfCFTA agreement to where it is today, it still has a long way to go before the continent can start reaping the benefits. This was the view of expert speakers taking part in a discussion on AfCFTA at the University of Pretoria’s Africa Week 2023.

Some legal loose ends are yet to be tied up, such as dealing with non-tariff trade barriers, but it became clear during the discussion that one of the greatest challenges to implementing AfCFTA is the vast amount of investment needed in building information and communication technologies (ICT), transport and logistical infrastructure and hardware, including millions of trucks, thousands of rail wagons and hundreds of aircraft and cargo ships.

“AfCFTA is expected to significantly increase traffic flows on all transport modes – road, rail, maritime and air,” said John Rocha, Chief Director: Trade Invest Africa at the Department of Trade, Industry and Competition.

How research could speed things up

He said the United Nations Economic Commission for Africa (UNECA) has estimated that 2,2 million trucks would need to be manufactured as a result of AfCFTA, at a cost of approximately USD 345 billion.

On top of that, intra-Africa trade would call for 169 339 rail wagons costing around USD 36 billion, as well as 135 vessels and 243 aircraft, at a cost of USD 4 billion and USD 25 billion, respectively.

“We currently do not manufacture one single plane on the continent,” Rocha said, suggesting aviation as one of many areas where research and innovation could help accelerate the implementation of AfCFTA.

Similarly, massive investment would be needed in ICT and digital infrastructure as an enabler of intra-African trade, Rocha said, noting that Africa is well served by submarine cables but lacks terrestrial fibre networks. He cited a World Bank estimate that Africa needs USD 100 billion in ICT investment.

Investment would also be needed in building Africa’s production and manufacturing capacity. “Although Africa has some of the largest ore reserves, the steel used in our railways, energy plants, homes and offices is, in the main, imported. That has to change. We need research in new technologies.”

The same applies in other import-intensive sectors in Africa, including food products, chemicals, beauty products, machinery, electricity, sugar, plastic and rubber and automotive manufacturing. “Demand for vehicles in Africa will more than double in the next few years, but only South Africa, Egypt and Morocco are vehicle producers. Research and innovation are critical in this area.”

He and other speakers agreed that while the investment needed to unlock the benefits of AfCFTA would be enormous, the gains could be even greater, especially by effectively harnessing research and innovation to accelerate AfCFTA implementation.

Building a cohesive body of African research

Professor Fiona Tregenna of the University of Johannesburg’s School of Economics said existing research related to AfCFTA tends to be narrowly focused, often on the legal aspects or a single industrial sector.

“These are all important but the different strands of the evidence base do not necessarily form a cohesive body of evidence,” she said, adding that AfCFTA research tends to be “heavily concentrated” in South Africa but “thinner” across the rest of Africa.

“There is also a preponderance of institutions relying on donor funding when the focus should rather be on building up African capacity,” Prof Tregenna said. She emphasised that universities can play a role in capacity building, given their significant capabilities.

The AfCFTA discussion was organised by the Department of Science and Innovation which, together with the National Research Foundation (NRF) and the Human Sciences Research Council (HSRC), are strategic partners of UP in hosting Africa Week 2023, taking place at the Future Africa Campus in Hatfield.

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