COVID-19 and Africa trade

African countries are increasingly connected to the global economy, but tend to operate at the lowest rung of the ladder. They are mainly supplying raw materials and other low-value manufactured outputs.

Cooperation is needed between Africa’s emerging entrepreneurs and industries to improve their competitiveness in global markets. This would have a number of positive outcomes including:

• triggering industrialisation, which will transform economies
• helping African countries obtain a fairer share of the value derived from African commodities and labour, and
• improving the lives of people on the continent.

The current crisis creates an opportunity for African countries to build value chains on medical equipment, pharmaceuticals and personal protective equipment.

The clothing and textile sector could also be restructured to meet the needs of the health sector while taking advantage of the breakdown in supply chains from China and Europe.

As more countries lock down their economies and apply movement controls, agricultural and processed food supply chains are disrupted. This creates opportunities to build regional supply chains and partner with retailers.

There are also opportunities to build infrastructure to support the health response: hospitals, water and sanitation, schools, low-cost housing and alternative energy.

African countries can also benefit from the growing interest in environmental tourism.

Cross-border infrastructure investment

Since most African countries are less developed, and many are small, intra-regional trade will require them to cooperate to improve their infrastructure. This includes physical ports, roads and railways as well as customs procedures, port efficiency and reduction of roadblocks.

Progress is already being made. Examples include the Mombasa-Nairobi Corridor; the Addis to Djibouti road, rail and port connection; and the Abidjan-Lagos Corridor, which handles more than two-thirds of West African trade.

Increased investment in these types of cross-border infrastructure projects will benefit regional integration.

Democracy and governance

Most African states have started accepting multi-party systems of governance. Many have also embraced a culture of constitutionalism, rule of law and human rights.

Democratic governance supported by active citizenship will create an environment of transparency and predictability that encourages domestic and foreign investment. Both are vital for growth and industrialisation. The process is also essential for the sustainability of regional economic integration and democracy in Africa.

Countries are becoming better at fulfilling their democratic obligations. For example, 40 African countries, including the Seychelles and Zimbabwe, voluntarily joined the African Peer Review Mechanism. The mechanism is a remarkable achievement that the free trade area agreement must build on.

The way forward

The free trade area could become a landmark in Africa’s journey towards peace, prosperity and integration. The COVID-19 pandemic, notwithstanding its devastating impact on the health and economies of Africa, could be an opportunity to advance the free trade area in a more developmental, inclusive and mutually beneficial way for African countries.

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Faizel Ismail is Director of the Nelson Mandela School of Public Governance, University of Cape Town

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