The private sector in Africa will play a critical role in speeding up industrial development and economic diversification, particularly in the context of the ongoing pandemic and other development challenges, as part of the African Continental Free Trade Area (AfCFTA), says logistics company Imperial Business Intelligence executive Mark Prommel and Imperial marketing and communications VP Melissa Arjoonan.
The private sector accounts for about 80% of total production, 67% of investment, 75% of credit and employs 90% of the working age population in Africa. Several determining factors, including an enabling business environment, affordable connectivity, accelerated digitalisation and opportunities to forge strong public-private partnerships are crucial to ensuring businesses’ commitment to trade and investment in the AfCFTA, Prommel and Arnoonan say.
However, African countries imported R8-trillion worth of goods in 2019, only R1-trillion of which came from other African countries. There are vast distances between markets on the continent, which means that transferring products at different levels of the value chain can be costly. This challenge is further exacerbated by the lack of enabling infrastructure connecting countries, especially rail, which can provide cost-effective transportation.