Publisher's Message

Ricky Muloweni Publisher's Message

“Africa is one continent, one people, and one nation... The community of economic life is the major feature within a nation, and it is the economy which holds together the people living in a territory. It is on this basis that the new Africans recognize themselves as potentially one nation, whose dominion is the entire African continent.” ― Kwame Nkrumah, Africa Must Unite

FINANCING AFRICA's SMEs

IT IS GRATIFYING TO fi nally have the

Africa Continental Free Trade Area

(AfCFTA) activated and ready to go. Africa Business Association (ABA) is calling upon the African Union (AU) to put together an enterprise fi nancing program working through the Regional Economic Communities and reaching down to the local entrepreneur in the village. The AU needs to deliberately address its people and emphasize that the time to get involved in building the continent is now. All hands are needed on deck. The AU needs to take deliberate steps to set in motion Skills Development Programs for entrepreneurship and provide more access to credit, capital and mentoring.

We have gone through the process of understanding the main objectives of the AfCFTA; “to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union”, okay, but what does this mean to the kiosk owner on the streets of Kigali or Lusaka?

Clearly if the kiosk owner is selling Jasmine rice from Vietnam or Hershey’s chocolates then their part of the negotiation in this Free Trade was conducted by the East or West, for them to have these

products to sell in their stores. Clearly sales of these products will not provide much of a net gain on the economic front, rather a substantial net loss on many fronts for them, their communities and the country.

Let’s unpack this last statement: At this point in our lifetime we can accept some global brands in our society such as Hershey’s to be with us for the long haul. But to say that African local producers of cocoa cannot come up with competitive products in this sector is clearly surrendering too early. Africa being a major producer of COCOA, begs the question, why we want to front Hershey’s to negotiate this trade deal in the fi rst place. That also brings us to the elephant in our room; most of these products that Africa seems to want to negotiate for, the raw materials originate in Africa.

Secondly, importation of goods aff ects the ability of the local economy to produce the same goods for the purpose of providing them to the local market. It thus also aff ects the ability of the local economy to produce the same goods for export. Accordingly, the import process must be conducted carefully so as not to be detrimental to the local economies. Clearly the best avenue is to encourage robust value addition on the continent followed by local partnerships with the Western producers. Again, skills training for the people… Yes, it has to be done and it must be done. If China

made it mandatory that Caterpillar or IBM manufacture from within China, the African Union can surely do the same.

Intra-Africa trade will only happen if the entrepreneurs in Africa get to have the required fi nancing and capital to conduct business. We all understand by now that most of Africa is a net importer of its goods and services from the East and the West. Import reliant communities have overtime devolved into the current economic and unemployment bind that Africa is going through. Healing a culture of liking only imported products and shunning locally produced product is a must for all of Africa.

Corvid19 has worsened the economic structure of families and local communities in Africa. There is no way to predict what the outlook could be post Covid19, even though it must be known to all that the continent has suffi cient local resources and markets to trade from within the regions. The decline in the world's GDP will no doubt lead to a severe fall in the exports demand for African products. Given the specifi cities of African economies, the negative impact would be more than proportional. The AfCFTA will thus have the advantage of boosting intra-African trade, contributing to mitigating a rapid decline in African GDP.

It is important to communicate to the African citizenry the fact that there could most likely be winners and losers. The

Rice Farmer in Africa

from page 5

question is how does the African Union get to notice that and who will pull the plug?

Who is in charge of ensuring success for all? We know that the Asian marketers have been bringing into Africa products ranging from rice to cocoa butter; how will that trade be aligned to ensure Africa's rice farmers have capacity to reach their customers, what mechanisms are being developed for the local African farmers to scale their capacity to grow more rice?

If we are to look at the past record as a measuring stick for progress, it is clearly going to be very wary for ordinary entrepreneurs to believe in this journey. In all fairness they have the right to be skeptical, as well the AU should go beyond the envelope to ensure eff ective communication is done to assure buy-in of the majority. For the most part African entrepreneurs come to the table with zero fi nancing - this must change. For the sake of encouraging a robust business environment in Africa perhaps the Africa Development Bank should rethink its approach to funding programs in Africa - what about directly engaging the small businesses with a goal to strengthen regional value chains. The AU has identifi ed the challenges that could hinder actualization of value chains across the continent - countless customs stamps, customs signatures and certifi cates to simply move a container from one nation to another. Now we need a program for capitalizing entrepreneurs across Africa to fully participate in this free trade opportunity. Yes, standing together as one market to negotiate trade deals is one foot in the door but the other foot, the people of Africa being the traders, manufacturers and suppliers, is still weak and cannot drag through. ABA suggests a plan to bring capital directly to the people. We must seize this moment with the right measure and understanding full well knowing that out of all this the key client is the African citizen. As Kwame Nkrumah said, “Africa is one continent, one people, and one nation... The community of economic life is the major feature within a nation, and it is the economy which holds together the people living in a territory. It is on this basis that the new Africans recognize themselves as potentially one nation, whose dominion is the entire African continent.” Africa Business Association will play it’s role for this success to reach the household units of all Africans. Ricky Muloweni Publisher/President dawn@africabusinessassociation.org aba@africabisinessassociation.org www.africabusinessassociation.org Image credits: Tumblr

About the Africa Business Association

The Africa Business Association is an independent international business development organization. We off er access to the latest resources, information, and best practices in advocacy and communications for the African Diaspora and the African entrepreneurs in Africa.

We work to help you have access to news and events as starting points for constructive conversations and calls to action. We seek to cut through the froth of the political spin cycle to underlying truths and values. We want to be so focused on progress that together we can provide a credible and constructive generation of Africans that take seriously our previous generations and act upon all their wishes, our hopes and aspirations to make lasting change for all future generations.

Africa Business Association "DAWN"

PUBLISHER/PRESIDENT Ricky Muloweni

ADVISORY BOARD Earl 'Skip' Cooper, II, CEO, Black Business Association H.E. Sheila Siwela, Ambassador H.E. Kone L. Tanou, Ambassador

CONTRIBUTING WRITERS Ricky Muloweni

LAYOUT/TYPESETTING Lion Communications

AFRICA BUSINESS ASSOCIATION NEWS 6564 LOISDALE COURT, SUITE 600 Springfi eld, VA 22150 USA 1-571-278-9441 aba@africabisinessassociation.org dawn@africabusinessassociation.org www.africabusinessassociation.org

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IN JANUARY 2012 DURING the 18th Ordinary Session of the Assembly of Heads of States and Governments of the African Union held in Addis Ababa, Ethiopia, the African Union agreed on a decision to establish an African Continental Free Trade Area (AfCFTA) with seven acknowledged key fundamental action clusters namely: trade policy, trade facilitation, productive capacity, trade related infrastructure, trade fi nance, trade information, and factor market integration. After eight rounds of negotiations from 2015 lasting through to December 2017, an agreement was reached, and offi cially went into force on the 30th of May 2020. Today’s event, the offi cial handover and commissioning of the AfCFTA Secretariat Building, is a culmination of all the great work and

tying together of the vision of having a single great and prosperous Africa.

When the call for a suitable location was made, the African Union received several bids, out of which Ghana’s off er stood out, thereby leading us to this great event today to commission this Secretariat at the home of the great Kwame Nkrumah, one of the founding fathers of the Pan-African movement, making this day a rather poetic one, to which he will be glad as our ancestor. In the reassuring words of President Nana Addo Dankwa Akufo-Addo of Ghana, “I assured that Ghana, as caretaker of the Secretariat, would put all the requisite facilities at its disposal, so that it could run as a world-class organization.” We are therefore confi dent that we have taken a step in the right direction and as rightly