The place of Africa in the changing face of global trade

The African Continental Free Trade Area (AfCFTA) has been a game-changer for the continent's trade landscape, with about 46 countries already ratifying the agreement. CNBC Africa's Eugene Anangwe recently sat down with Pamela Rosemarie Coke-Hamilton, the Executive Director of the International Trade Center, to discuss the impact and potential of the AfCFTA on Africa's global trade positioning. In the interview, Coke-Hamilton highlighted the historical significance of the trade initiative, emphasizing that even though it has only been five years since its inception, the progress made is unparalleled. She noted that the AfCFTA has brought together 54 African countries around a single vision of creating a single market for goods and services across the continent. One of the key points raised in the interview was the low level of intra-African trade, currently sitting at 14%, due to existing trade barriers between African nations. The potential for trade within the continent is estimated to be $22 billion per year if these barriers are removed. This highlights the importance of implementing the AfCFTA to boost intra-continental trade and eventually enhance external trade relations. Coke-Hamilton also emphasized the need for African countries to shift from a defensive trade posture to an offensive one. She explained that many developing countries, including those in Africa, have historically been defensive in trade negotiations due to a fear of losing out. However, by showcasing the opportunities and benefits of intra-African value chains, countries can work towards building a more proactive trade strategy. The interview delved into the challenge of value addition to Africa's natural resources, with Coke-Hamilton acknowledging that it is a complex transition after centuries of commodity dependence. She cited examples of countries like Botswana and Ghana, which have taken steps to add value to their raw materials before export, highlighting the importance of developing local capacities and promoting economic growth through value addition. Discussing the lessons learned from the COVID-19 pandemic, Coke-Hamilton noted the accelerated digital transformation in trade brought about by the global health crisis. The pandemic forced many African countries to embrace e-commerce and digital solutions, catapulting the continent's digital trade capabilities. She stressed the importance of addressing issues of affordability in digital trade to ensure widespread access and participation. Looking ahead, Coke-Hamilton outlined two key factors that will define international trade in the future - digitalization and green initiatives. She emphasized the need for African businesses, especially MSMEs, to adopt green practices for competitiveness and sustainability. Additionally, she highlighted the critical role of AI in trade and the importance of addressing intellectual property concerns in a rapidly digitizing world. Overall, the conversation with Pamela Rosemarie Coke-Hamilton underlines the transformative potential of the AfCFTA in unlocking Africa's trade prospects. By addressing trade barriers, fostering intra-African value chains, and embracing digital and green initiatives, African countries can position themselves as key players in the evolving global trade landscape.