AfCFTA will unlock opportunities for BRICS member countries
In order for businesses to fully take advantage of the opportunities provided by South Africa being part of BRICS and Africa, several infrastructure challenges have to be overcome, which the African Continental Free Trade Agreement (AfCFTA) could help solve.
This was according to Wamkele Mene, who is the secretary general of the AfCFTA Secretariat, who was speaking at a panel discussion on BRICS in Africa: Unlocking opportunities through AfCFTA, hosted by the BRICS Business Council yesterday, at the 15th BRICS Summit in Johannesburg yesterday.
The panel members were Gugulethu Mfuphi, who was the moderator, Mene, Stavros Nicolaou of South Africa, Angelo Oselame of Brazil, Mikhail Makarov of Russia, Onkar Kanwar of India and Tongzhou Wang of China.
Mene said the AfCFTA could provide the tools to make Africa globally competitive to unlock the opportunities presented by 1.3 trillion people with a combined buying power of $3.4 trillion (R64 trillion).
A study by the South African Development Community (SADC) secretariat estimated that transport inefficiencies cost African economies $170 billion annually. The study said the lack of harmonisation of standards and regulations was hampering efficient transport flows, which is why the AfCTA was implemented to boost inter-Africa trade.
In that respect the BRICS New Development Bank could provide funding to address the constraints of electricity generation and transmission, while the Gauteng provincial government hosted a briefing on the Inter Africa Trade Fair that will be held in Cairo, Egypt in November.
Nicolaou said South Africa was a critical hub for intra-African trade as it had the most diversified and industrialised economy on the continent, so it could be the fulcrum for trade between the continent and the other BRICS member countries.
“From a South African perspective, we saw a 44% increase in trade between South Africa and the rest of BRICS between 2017 and 2021. We have trade deficits with all our BRICS member countries, so we want to reduce those deficits by looking at opportunities to boost both complementary and supplementary trade. As an illustrative example, one of our biggest exports to Brazil are centrifuges, so why can we not export some of those to China, India and Russia,” he said.
Nicolaou also highlighted that by the end of this century, Nigeria would be joining China and India as a country with a population in excess of 1 billion.
Oselame noted that his company, Marco Polo, was active throughout the continent since the 1980s, so his company and other Brazilian companies, could bring their experience to the table and unlock the opportunities that the AfCFTA represented. Marco Polo has a factory in Germiston that can supply product to the rest of Africa.
Makarov invited members of the audience to visit the Russian stand at Gallagher Estate Hall 2 to see what Russian companies could offer African economies in terms of technology and training.
“At the moment we are focusing on the green economy with several concrete proposals that address global warming,” he said.
Kanwar said digitisation had been a critical enabler to boost trade and India’s experience of providing broadband access to villages could be replicated in Africa, so that farmers and small businesses could become part of the trading ecosystem which would provide harmony and real results.
Wang said his company, China Communications Construction Company, was active in addressing the transport infrastructure constraints by providing rail, road, and ports throughout the continent.
“In South Africa we are active on the N2 toll road, so we are very happy to be here for the BRICS Summit,” he said.
Nicolaou said the current constraints in terms of energy supply and logistics should be seen as an opportunity, but it requires a partnership with government.
Mene said the recent coup in Niger was unacceptable as it impacted trade relations.
“There will be no trade if we do not have political stability as traders will be shut out of markets,” he said.
*Helmo Preuss: Economist at Forecaster Ecosa
BUSINESS REPORT