African Business Council calls for 40% continental procurement law
The African Business Council is advocating to have 40 percent of all procurements by the 55 African countries be allocated to the African Private sector saying it's not possible that what is available on African soil can be acquired from overseas if the dream of industrialization is to be realized.
Speaking in Midrand, South Africa while addressing a two-day workshop on Accelerating the African Continental Free Trade Area and the significance of the Pan-African Parliament, the President of the African Business Council Dr Amany Asfour said that already the African private sector is conducting a mapping exercise on resources existing on the continent and how to add value to them because collectively all resources in the world are available within.
She said the implementation of the African Continental Free Trade Area-AfCFTA depends on the role of the African private sector which can not achieve the dream on its own, saying legislation role is critical. “For the private sector to thrive we need an enabling environment, an investment climate and legislation for better procurement for the African private sector”
Asfour underscored the need to have incentives for African investors rather than giving to multinational companies that dot the continent, urging the Pan-African Parliament-PAP to support the private sector.
She said PAP could support the private sector by pushing for legislation in domestic Parliaments that will make it mandatory to have 40 percent of all government procurement given to the African private sector.
“It is not possible that what is on the African soil can be brought from outside Africa, that is why we need a law on 40% procurement,” she said.
Asfour added that even as Africa conducts mapping exercises of its resources, mechanisms and strategies must be quickly put in place to address the issue of value addition of African resources given that the continent has nearly all resources of the world.
She gave an example of DR Congo and Zambia as countries in a strategic place to provide a solution for batteries for electric vehicles whose demand by 2030 will have hit 200M, instead of having developed countries that get resources of lithium, and copper and then produce them outside the continent.
Asfour reminded the continental parliament that the founding vision of a competitive, borderless innovative Africa for Trade and Industrialization must be realized because AfCFTA without industrialization and investment is a dream.
For instance, she cited a lack of investment in health care which is draining the continent of both manpower and resources.
“According to WHO 80% of Africans are dying from cancer compared to 24% from Western countries because we don’t invest in the health sector forcing many to flock to India for treatment while we can invest in healthcare”
In order for Africa to produce high-quality and competitive products globally, the African business council has crafted a business strategy based on three pillars of private sector strengthening that includes SMEs, women and youth, policy advocacy that will serve as incentives to the private sector and finally product development which aims at having a solid product that can trade amongst Africans and how to ensure free movement of goods and services.
On his part, the PAP President Chief Fortune Charumbira said that by actualizing the African Continental free trade area, Africa’s Direct Foreign Investments-FDI could increase by 111% - 159% which could help African companies join regional and global value chains which are lacking at the moment.
Charumbira called AfCFTA a panacea to the continent’s economic and unemployment predicament because if realized, inflow FDIs would bring jobs and expertise, build local capacity and forge connection connections resulting in higher pay, better quality jobs with women getting the biggest wage gain.
“Wages could rise by 11.2% for women and 9.2% for men by 2035 albeit with regional variation depending on the industry that expands the most in a specific country,” he said.
He said in the event integration deepens, Africa’s exports to the rest of the world would go up by 32% by 2035 and intra-African exports would grow by 109% led by manufacturing.
Director of Trade in Goods and Competition Mohamed Ali who addressed the gathering virtually lauded the continental legislature for its support for the implementation of the AfCFTA stating that one of its success stories is the establishment of Pan-African Payment and Settlement Systems (PAPSS).
“We are losing a lot of hard currency while travelling amongst ourselves. We are setting up a PAPSS to allow traders to transact in local currencies implying cheaper access to inputs and access to products will be easier”
Africa Continental Free Trade Area entered into force on May 30 2019 after 46 member states ratified the protocol in a record two months.
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