We all want a drink on the go, our phone’s charging, to use a bank, or have our hair cut. The cart in the video is an interesting idea, which highlights both opportunities and barriers.
What we regard as common facilities are not always available, or affordable for many in a retail setting. The middle class is growing across Africa but more than half the population still live below the poverty line.
Only a quarter of African adults have bank accounts, internet penetration is at around the same level. Transport links outside cities, or ports can be challenging, political instability, or war far more so.
There is nevertheless significant opportunity in a continent of 1.4 billion people, with steps being taken to promote business.
Amidst well publicised growth of trading blocs such as ASEAN, African nations have quietly been coming together, via The African Continental Free Trade Area (AfCFTA) agreement. A free trade zone with more countries than any other.
The 55 nations who have signed up so far may not be the wealthiest on the planet but represent a combined GDP of £2 trillion. AfCFTA only became operational in 2021, early days but the potential and need are clear.
African exports are focused on raw materials, such as oil and copper. There is little processing on the continent, which is heavily reliant on importing for consumer goods, along with a range of manufactured items.
Increasing costs during the Covid-19 pandemic have highlighted the problem, although the opportunity for higher self reliance has always been there. The same applies to intra-African trade, currently around 17%, compared to 59% within the EU.
Cutting red tape which impinges on the flow of goods across Africa will be critical to AfCFTA’s success. The same will need to apply to information, skills and capital, including the ability to attract foreign investment.
Improved transport links will matter, the single African air transport market initiative that is part of AfCFTA should help with this. Education will be equally important, to sustain a more technically based workforce.
African nations acknowledge that time will be needed, with their target of 25% intra-African trade by 2040 quite manageable. Key factors in achieving the goal will be lowering trade costs and streamlining border controls.
Controls in African countries can be quite varied, a combination of local protection and influence from overseas links. AfCFTA members accept there needs to be a change of approach and simplification in export regulation.
This includes temporary exports, which help to stimulate trade. At present, ATA carnet members in Africa are Algeria, Cote d’Ivoire, Morocco, Senegal, South Africa, Tunisia, Madagascar and Mauritius.
Being part of an international system helps them and in the long term others will join, with simplification inside AfCFTA territory leading the way.
Our team will be keeping a close eye on developments, alongside providing current ATA carnets for Africa. We would not be surprised to see the numbers of those grow, even though this may seem counter intuitive to Africa increasing internal trade.
If their nations succeed in establishing a more diverse economy, the long term stability and resilience which will follow can expand trade for us all.