As African countries struggle to procure goods and supplies from global suppliers in the wake of the novel Coronavirus pandemic (COVID-19), the situation is expected to cause a shift from global supply chains towards more regionalized and localized supply chains.
That’s according to the African Continental Free Trade Area (AfCFTA) Year Zero Report, by policy and advocacy think tank, AfroChampions Initiative.
The Agreement is aimed at improving intra- African trade to among other things, create a single market, deepen the economic integration of the continent, establish a liberalized market through multiple rounds of negotiations and aid the movement of capital and people, facilitating investment.
According to the report, though the pandemic has slowed down a lot of activities across various sectors of the economy, there is a silver lining in the COVID-19 crisis for Africa and AfCFTA.
“Countries are expected to re-balance their over-reliance on distant suppliers in favour of more proximate suppliers as this could have some positive impact on ongoing efforts to boost African regional value chains,” the report stated.
Also, African countries can take advantage of the pandemic to boost African industrialization as there could be potential positive effects on regional and local manufacturing.
“Along with the potential re-balancing towards more regional value chains, COVID-19 is also expected to cause a shift from over-reliance on global manufacturing hubs towards more dispersed and diversified regional and local manufacturing,” the report noted.
COVID-19 opportunities for Africa
This is also Africa’s opportunity to accelerate e-commerce, digital economy and the Fourth Industrial Revolution, “which without a doubt will be one of COVID-19’s biggest immediate and long-term impacts.”
Making an intervention on 9th February, 2020, during the closed session of the 33rd AU Summit, in Addis Ababa, Ethiopia, Ghana’s President, Nana Akufo-Addo assured the Assembly of Heads of State and Governments of the African Union that the AfCFTA Secretariat will be operational in Accra by 31st March, 2020.
Citibusiness