Session II - Enhancing Africa’s Global and Regional Integration

Photo - From L to R: Martyn Davies, Deloitte, Skip Jones, U.S. Department of Commerce, Ambassador Dr. Richard Sezibera, Republic of Rwanda, Rami Suleiman, UPS, Mansur Ahmed, African Manufacturers' Association/ Dangote Group, Wamkele Mene, Department of Trade and Industry, Republic of South Africa

 

On February 12, the Corporate Council for Africa (CCA) and the US Mission to the African Union co-hosted the U.S. – Africa Trade and Investment Forum in Addis Ababa. More than 300 people attended from more than 30 countries, including senior government representatives from the United States, the AU, Egypt, Madagascar, Rwanda, Mauritius, Sudan, Ethiopia, Niger, South Africa and Benin. Senior executives from more than 50 U.S. and African companies also attended.

 

Martyn Davies of Deloitte moderated a panel that had a mix of African government and private sector representatives, and sought to dig into questions related to how to integrate multinational companies into Africa’s development and integration plans. African representatives noted that the most important factor for any country is the size of its ambition, rather than the size of its territory. They detailed efforts to pursue a business-led development strategy to remove as many barriers as possible to doing business. African countries are serious about pursuing a more open trade and investment agenda, and forecast that companies would soon see more tangible signs of progress, including some ground-breaking approaches to dispute resolution.  

 

They also noted countries are incorporating measures from the WTO’s Trade Facilitation Agreement into the AfCFTA that should encourage more trade and investment, including promoting inclusion in regional and global value chains. Goods will be able to move much faster, and customs authorities across the continent will apply the same procedures, working from the same set of standards and rules. One representative called for relaxed rules on cabotage and greater use of regional power pools to expedite providing more reliable electricity supplies. They were optimistic about the impact that a common framework on non-tariff barriers and standards would have on expanding trade across the continent. The Department of Commerce said that the US is listening closely to what African countries and companies want, and encouraged African countries to fully implement TFA provisions, which would more than double the impact of AfCFTA  on GDP growth and jobs.

 

U.S. companies noted that having an efficient supply chain is a huge competitive advantage in the market, as logistics can account for 20% of a country’s total GDP. Getting that right makes the rest of the economy that much more competitive. High logistics costs, in contrast, can significantly increase the cost of a product (one example was cited that 70% of the cost of a BMW in central Africa comes from transport costs). African companies agreed on the impact that a country adopting the right policies can have on encouraging companies to invest and do business. He also stressed the importance of enforcing rules. They noted that there will be a lag between when the AfCFTA is approved by governments and when it is really operational on the ground, and encouraged governments to do all they can to minimize that lag to maximize the benefits.