African Union Facing the Political Reality of Building Regional Entente Versus Real Geo-Political Supranational Interference
Neutrality and Integrity are considered non-existent given the foreign aid received by the African Union making it dependent on external financing can become the lobbyist for foreign interests in African Affairs and Decision-making by the African Unifying Organization
Bits and Bites on the Impact of Foreign Aid on the African Organization:
According to a 2023 Kenyan Wall Street article, the African Union’s (AU) over-reliance on foreign aid to fund 60% of its programs is slowing progress in developing the capacity to deliver Pan-African transformation.
The United States is the world’s largest donor of humanitarian aid to Africa. In 2021, the U.S. Department of State and USAID provided $8.5 billion in aid to 47 countries and 8 regional programs in sub-Saharan Africa.
The U.S. government provides a large share of its aid for Africa through multi-country initiatives. These include:
The U.S. President’s Emergency Plan for AIDS Relief (PEPFAR)
The President’s Malaria Initiative
Feed the Future
Prosper Africa
Power Africa
Ethiopia: In 2022, received the highest amount of net official development assistance (ODA) from official donors in Sub-Saharan Africa, at roughly five billion U.S. dollars
Nigeria: In 2022, was the second largest recipient of ODA in Sub-Saharan Africa
The European Union (EU) also provides a significant amount of aid to Africa, giving around EUR 20 billion a year.
China has provided $160 billion in loans to Africa over the past 20 years, or about $7 billion per year. China has also invested $155 billion in infrastructure projects in sub-Saharan Africa over the past two decades. China continues to be one of the major financiers of infrastructure projects in sub-Saharan Africa, with a total investment of $155 billion over the past two decades. As a result, Beijing has gained enormous influence and contacts with several African nations. China’s aid supports many projects, including: Transportation infrastructure, Energy and minerals, Medicine, Agriculture, Telecommunications. In 2021, China pledged $40 billion during the Forum on China-Africa Cooperation (FOCAC). China also promised additional support to combat COVID-19 and announced a goal to increase its imports from Africa to a total of $300 billion in the next three years. Mar 25, 2023
Top 5 ratios belong to Djibouti (54.3%), Republic of Congo (19.6%), Angola (18%), Mozambique (14%), Zambia (11%). On average, African Borrowing from China constitutes a ratio of 5.3% to GDP of Borrowing Countries. China’s FDI correlates with China’s resource interest in Africa. Twelve resource-rich African countries – South Africa, DR Congo, Zambia, Ethiopia, Angola, Nigeria, Kenya, Zimbabwe, Algeria, Ghana, Tanzania, and Mozambique – housed nearly three-quarters of China’s FDI by stock in 2020, as seen in figure 1. Nov 4, 2022
According to Legal Tools, the Charter of the Organization of African Unity (OAU) states that member states affirm the principle of respect for the sovereignty and territorial integrity of every state. However, the Constitutive Act of the African Union (AU) is more in line with the notion of responsible sovereignty than with the conventional accentuation of state rights. The AU’s Constitutive Act has several goals, including:
Achieving greater unity and solidarity between African countries
Defending the sovereignty, territorial integrity, and independence of its member states
Accelerating the political and socio-economic integration of the continent
Promoting and defending African common positions
Some say that foreign funds can only help African countries that undertake political, economic, and institutional reform. Others say that foreign aid has not been effective in Africa because:
Aid has been looted
Aid has been poorly monitored
Donor agencies knew that aid was being stolen
Corrupt African leaders have embezzled aid
Widespread government corruption has caused donors to withhold money
Aid has increased the risk of civil conflict and unrest
More Bits and Bites on the Negative Effects of Foreign Aid in Africa:
Corruption: Foreign aid can encourage the corruption of governments.
Inefficient governments: Foreign aid can lead to the creation of ineffective, corrupt governments.
Economic policies: Foreign aid can lead to unstable economic policies.
Systemic bias: Aid can do nothing to address the global political economy’s systemic bias toward poor African countries.
Unnecessary Aid can be ineffective in places with good governance, and unnecessary in places with bad governance.
Unproductive continent: The West has used foreign aid to make Africa unproductive and dependent, keeping its grip on the continent.
Foreign aid can be used to finance a variety of activities in Africa, including: Investment projects, Technical assistance, Budget support, and Debt relief.
The international situation is not only affected by the conflict in Ukraine and the end of the “zero COVID” policy recently adopted by China, other geostrategic factors and regional and international financial and economic policies condition the growth of advanced global economies thus creating a cascade of recessionary movements undermining the bases of the transfer of added value between the companies forming and supplying the added value chain.
New Paradigm of the Chinese Economy and Its Consequences
China anticipated the advent of the Water Rabbit New Year to stimulate consumption during the celebration period in order to erase the contraction experienced in 2022 in terms of growth. According to figures from the National Bureau of Statistics of China published Tuesday January 17, 2023, growth would be 3% in 2022 far from projections of +5.5%. This rate is the lowest level since the 1970s. The watchwords are “Stability and Reforms” with which China is trying to attract national and international investors and restore confidence in the economic future of the country.
As for the United States, there is a deluge of mass layoffs in all high-tech sectors and especially in services. The flagship tech companies no longer hide their dismay, taking advantage of an environment of international conflict and national recession, they are leading the fight against the tendencies of union mobilization that workers wanted to form as a defense against the erosion of their powers. purchase and their rights. The response is solidarity from companies which until now have been protected against the effects of the crisis. So, it is not surprising that on Wednesday January 4, 2023, Amazon plans to lay off 18,000 employees, Microsoft and others. This surge was thus unmasked and started by the bankruptcies of Startups and especially by the fraudulent manipulations of the Crypto Assets sector which contributed to the materialization in 2022 by Wall Street of its worst year since 2008: the S&P 500, the index of the 500 main listed companies, fell by 20%.
At the same time, continued inflation tends to erode the purchasing power of the most disadvantaged and affects the employment of the poorest. Given that the fight against inflation involves reducing wages, this paradoxical situation makes the acceptance of all working conditions acceptable in the sectors by poor workers without union protection. Productivity will be affected as will job stability, weakening recovery efforts and employment in low-income service sectors on the economic and industrial scale.
At the same time, financial support for Ukraine and other contingency budgetary expenditures have caused the federal debt ceiling to be reached, which currently stands at $31.4 trillion, on Thursday, January 19, 2023, this debt level is of around 120% of GDP, according to government figures.
As a result, the United States will be characterized by the continuation of the recession and by a period of economic slowdown. The stimulation of military spending on rearmament, the race for the sophistication of new weapons and arms exports as a form of recycling of old weapons are thus considered as temporary remedies while the real problems are contained and integrated into the distribution of wealth and the glaring inequality in the sharing of the benefits of economic growth. On the other hand, the effects and consequences of stagflation and recession are distributed generously without borders among the working social classes.
Proposal for the Creation of “InterAfrican Social Community Bank of Reconstruction”
With Disaster after Disaster, Insecurity, Institutional Instability, Rising Unemployment, Rising Crimes, Corruption, Nepotisme, Spoliation of Rights of Private Ownership and Persecution of Activism and Political Opposants and So On, Africa Needs “InterAfrican Social Community Bank of Reconstruction” to replace the African Development Bank (AfDB)
Summarized Definition of Actions and Interventions for the “InterAfrican Social Community Bank of Reconstruction”
The prototype model used for the creation of the “InterAfrican Social Community Bank of Reconstruction” is based on research I have conducted within the CREDAL Laboratoire 111 associated with the Centre National de la Recherche Scientifique – CNRS with mentorship received directly from Celso Furtado who his own work and studies have effectively focused on the correction of the economic dualism and the structural imbalances that hurt the economic development. Celso Furtado used the direct reality of the century-old existence of marginalization and improvershipment that dominated and defined the economic destiny of the Northeast of Brazil to elaborate new concepts and theory of regional and national development. Note *
Celso Furtado and SUDENE, Superintendence and the Planning of Development for the Impoverished and Marginalized Regions by the International Investors and Marketplace
Celso Furtado; regional inequalities; Northeast (Brazil); SUDENE The contributions by Celso Furtado for the economic development was based and aiming to interpret and explain the determinants of regional inequalities and to the formulation of development policies for less developed regions.
While I was conducting research on Brazil with the advice of Celso Furtado in Paris, I realized that Brazil, through the recommendations of the World Bank, had in fact applied the first and already in the mid-fifties the same scenario and the same development strategy which was subsequently granted to Morocco by the same institution which resulted in the implementation of the import substitution program. As they say, we change the bottle, the labeling and the branding but the wine remains from the same source, even with a bitter taste given the time spent in the open air.
My Mentor and Thesis Advisor, Celso Furtado Said El Mansour Cherkaoui et Jacques Chonchol, my Thesis Director of Research Said El Mansour Cherkaouiui on Latin America Publication on the Economic Development of Brazil at the Centre National de la Recherche Scientifique de Paris par Said El Mansour Cherkaoui:La relation ambivalente entre l’Etat fédéral et les…Lire la Suite →juin 13, 2022
Furtado overcomes the notion of region and begins to examine spatial structures; he introduces the central role of urban nodes, of their hierarchies and articulations; in other words, the role of the urban network in the command and structuring of the territory; of the central role of technology and innovation processes, and finally, of the need for an interdisciplinary effort for both understanding regional problems as well as for the formulation of policies and their implementation.
Said El Mansour Cherkaoui Research on the Development of Brazil
I worked with Celso Furtado in Paris when I was an Associate Researcher at the CREDAL and the Institut des Hautes Etudes de l’Amérique Latine at Paris. Celso Furtado was my mentor with Raymond Prats, Frederic Mauro and Jacques Chonchol. My research topic focused on the Intervention of the Brazilian States in the Economy.
My research on Brazil entitled: “La Relation Ambivalente entre l’Etat Fédéral et les Grands Groupes d’Intérêts Privés au Brésil dans la Première Moitie du XXeme Siecle” [voir document ci-dessus] was considered by Eminents Scholars and President of the Latin American Association in the United States of America as pioneered study in the World with the one conducted by Steve Topik. We were the first two Researchers that focus on such period of time with the State involvement in regulating the growth and development. Extract of this research was published by the Centre National de la Recherche Scientifique – CNRS.
In the orientation favored by Celso Furtado, I also focused on using a backdrop the theoretical antecedents and principal global experiences of regional development policies, which served as a reference for Celso Furtado.
The originality of Furtado’s innovation is that he linked questions of regional inequality with the nature of underdeveloped structures. using and also interceding the theoretical and empirical foundations in his analysis of the Northeast question. This approach helped Celso Furtado to establish guidelines for the future SUDENE and its interaction and confrontation with political pressures and the insufficiencies in the way development policies for the Northeast were carried out.
Celso Furtado was a Man of the Territory and the Field Research bringing to the academic and conceptual world, the harsh reality of the region disinherited and impoverished by centuries of voluntary neglect and exposure to the extraverted demand that was imprevisible and inconsistent.
Celso Furtado Fighting Regional Inequalities in the Northeast (Brazil) with SUDENE
A multiregional Superintendence of stimulating and increasing the outputs and the productivity of food staples along with the expansion of educational programs that favor and increase the social return and the individual empowerment of communities and self-reliance of tribes in African countries. No bank headquarters should be located anywhere, this institution needs to be located in the regions and near the communities that need its services, support, and orientation as well as investment in education.
Here below are details on the Investment on Education in Africa:
Read in the following listed link and the correspondent article where is presented our Proposal Educational Value to create and manage Entrepreneurial Training Programs and Institution: American Institute of Entrepreneurship in Africa dedicated to the rising and the growth of Entrepreneurship based on American Principles and Strategie of Creative Social Management.
– Supporting fragile communities, regions, and ethnic minorities as well as their cultures and means of living
– Strengthening local not export agriculture and guaranteeing through direct Research and Development to increase the transformation of saline waters and agricultural productivity without Chemical to build and assure FOOD SOVEREIGNTY of communities, regions, and ethnic tribes
– To protect and promote the preservation of the most distinguished aspects and characteristics identities of their culture and means of living
– Implementing Study and Educational Programs to increase literacy and to create jobs in accordance with this educational policy
– Workforce Program Development adapted to the local economic socio-cultural and eco-financial conditions as well as the level of modernization conditions, see our training programs on Entrepreneurship at https://glocentra.com and / en Français: https://fr.glocentra.com
– Stimulating trade and exchange of ideas and opportunities with other regions of the country to reduce the formation of enclaves and isolation
The “InterAfrican Social Community Bank of Reconstruction” subscription to its capital should be from the State and transformed and vested in community ownership and the employee’s ownership to maintain the financial independence and the autonomy of the strategic management of this Superintendence.
The “InterAfrican Social Community Bank of Reconstruction” mobilizes resources from within and outside of its spheres of action and operations.
Today I am sharing with you, first some Crypto analysis given that these Virtual Assets has made a lot of wave up to Congress, the Wall Street, and even Ms. Christine Lagarde is talking about the Euro Crystal Ball in the Ivory and Crystal Palace of the European Central Bank is trying to Roll the Dices and to Make a Snowball with her Foraminous Declarations about the Inflation and how she is good at playing with rates, rats, and rabbits out the hat, her magic in giving low rates of inflation that never materialized and now she found Crypto as the new drive toward controlling the inflation of money and prices.
Ms. Christine Lagarde is the Guardian that I call Ms. 2% Inflation of Discourses.
All these monetary and financial policies with their interest rate are like chameleons changing the color of the money, with the changing color of the sky, and changing direction with the weather which are more an adaptation to climate change than to the business climate. The European Central Bank is also a Dollar-driven camel transporting the value of the dollar and trying to stick it to all the transactions that are vehicular for the sanctions against Russia.
Second, Africa in its quest to increase its revenue to face its budgetary deficits, its increase of public debt, and the rising prices of its imports, needs to consider establishing a unique African-focused monetary denomination and evaluation of its own production, natural resources, or manufactured goods as well as the payment of its rising interests and reduce the impact of the International Monetary Fund and the World Bank more interested in generating and receiving the servicing of the debt without any concerns for the disastrous consequences of their recommendations and their therapy that has been continuously imposed to African countries since the early years of its independence. These International Financial Institutions continue up to this day to dictate conditions that are more an ignition of social turmoils, social discordance, and political upheavals as well as coup d’etat and losses of life.
So Africa needs to consider creating and trying Virtual Money that is regulated and integrated into the national banking, financial, and monetary legal frame of the members of the African Union.
More details will be given in additional and other publications.
For the time being, here are my articles that shed light on what to avoid and what to be aware of about the Crypto World and Underground where you need more than the Ariane Thread to get out of such a maze and Dedalus.
Economic integration involves agreements between countries that usually include the elimination of trade barriers and aligning monetary and fiscal policies. African countries needs to passover the signing and reach the level of applying, changing and developing foundations for the documents to be signed.
African countries have taken several steps to integrate their economies, including:
Organization of African Unity (OAU/AU) – Created to tie African countries together to pursue mutual interests and goals
Regional economic communities (RECs) – Established to integrate African countries by region
Trade agreements – Initiatives like the Tripartite Free Trade Area and the East African Community have added to regional integration
African Free Trade Agreement (AFTA) – Concluded in 2018, this agreement intends to establish a single market and production base
African Continental Free Trade Area (AfCFTA) – Full implementation would help African countries increase their resiliency in the face of future economic shocks
Other regional steps include:
Infrastructure (SADC, EAC)
Trade liberalization and facilitation (West Africa economic and monetary Union, COMESA)
Free movement of people (ECOWAS)
Peace and security (ECOWAS and SADC)
The African Continental Free Trade Area (AfCFTA) is a strategic framework that creates a single market of goods and services for deeper economic integration on the African continent. The AfCFTA aims to:
Establish a One African Market for goods and services
Transform regional trade
Lift growth and support livelihoods across the continent
Attract investment
Boost trade
Provide better jobs
Reduce poverty
Increase shared prosperity in Africa
The key pillars of Africa’s regional integration include:
Today, a historic Memorandum of Understanding (MOU) has been signed that signals a commitment to cooperation, knowledge sharing, and collective action in the commodities exchange industry. The formation of the AfCFTA Association of Commodities Exchange (A-ACX) is a pivotal moment in the journey towards realizing the full potential of the African Continental Free Trade Area (AfCFTA). One of A-ACX’s key objectives is to foster collaboration and information sharing among member exchanges. This collaborative approach is vital in addressing common challenges and seizing opportunities in the commodities exchange industry. Through regular dialogues, member exchanges can share best practices, experiences, and insights, ultimately improving the efficiency and effectiveness of their operations. This knowledge exchange will also benefit regulators and policymakers, ensuring that regulations and policies are aligned with industry needs.
African economic integration is an overarching goal of achieving an African Economic Community at continental level. Member states will need to address integration challenges, which include:
Inadequate financial resources
Poor infrastructure networks
Increasing violence, terrorism and political instability
Slow implementation of policies and agreements
Signing documents and agreements while the infrastructure, the structure the organizational entities, and the roadmaps, as well as the operating strategies, are not in place, is an act of archivists, not difference makers.
Signing documents and agreements or Memorandum of Understanding is just building a Library of Paperwork and Administrative Understanding and Cooperation that stays at the level of paperwork with no impact on the reality of integration that should be done in complementary and synergistic manners between the following [Summary of realizations]:
The building capacities:
Build up domestic infrastructure and production capacity
Attract investment
Foster deeper and diversified trade relationships worldwide
A regional approach in key structural areas such as:
Tariff reduction and harmonization
Legal and regulatory reform
Payment systems rationalization
Financial sector reorganization
Investment incentive and tax system harmonization
Labor market reform
The development of productive sectors,
The connection of logistics, land [rail, Truck, and River], maritime, and air
Regional inclusion from a continental perspective,
The enhancement of rules and directives toward integration,
The synchronization of procedures for transactions and transfers of value and commodities,
The redefinition of the function of the Customs Union and international commercial code
The exploration of common rules for the control, inspection, valuation, taxation, and acceptance of foreign-made products, merchandise, commodities, and services
The standardization of payment methods,
The establishment of a central financing house and banking defining convertibility and exchange rate between various currencies, the unification of monetary policies and financing decisions,
The standardization of calibrating, measuring, weighing, labeling of products, services, and natural resources,
The creation of professional representative cooperatives for the valuation and the international commercialization of primary goods, mining processing, and transformation of agricultural products,
The implementation of continental referential standards for the protection of the environment
The creation of an agency for the respect of the international code for usage. recycling and protecting water resources,
The creation of regional centers of research and development,
The use of identical and similar educative and workforce development studies and programs
Additional Factors Needs to be Accounted and Steps to be Taken
These are the basic elements of structuration that are fundamental in setting primarily a common working frame to be adapted to every interest represented by the active members of the African Integration to enable further development and structuring of the African Continental Free Trade Area based on the adhesion and the adaptation of commonalities and identities at the level of economics, finance, logistics, management, and decision-making process based on the following changes and
steps to improve the African economies, including:
Developing human capital by enabling and encouraging creativity and innovation based on local needs and regional potentialities
Building safety nets with increase of State and Government Agency involvement with governance based on social responsibility and accountability
Addressing a growing population and reducing poverty and gap in social stratification
Educating and Forming Africa’s youthful population with integrated educatively training programs’ leading to meaningful work conditions and skills learning
Increasing regional trade in social services
Investing in digital and in human resources
Information communication technologies: Development of information communication technologies
Improving infrastructure, including Internet and other communication networks
Promoting job creation with acceleration of Social Entrepreneurship based on Regional capacities
Exploring new financing mechanisms by State and Regional Entities
Making manufacturing and transformation a local and regional policy priority prior to export
Reducing debt and external reliance on international financing
Increasing cooperation and cooperatives by women and tribal ownership to reinforce local and regional self-reliance and economic emancipation
Building Renewable Energy oriented industries using local resources of land, river, ocean, wind and other natural resources.
Maintaining macroeconomic stability
Having a more efficient tax system
Investing more in human capital
Having strong financial systems
Having a realistic exchange rate
Development of infrastructure and connectivity between African countries
Elimination of all barriers to trade
Good governance
Cross-border better cooperation among public and private stakeholders
Africa is not like other regions around the world where trade was made through different means of communications and relationships. Africa has trade relationship based on exchange within its own regional limits and intercontinental sphere that were shaped by the territorial extension of the same tribes and its importance in the development of regional cultural and way of living in vast areas building alliances, causing wars and facilitating adoption of the same religion and tradition within rich, diversified, antagonistic and integrative forms of social, economic and institutional forms that the only challenges where the physical configuration existing between the lands and the oceans. Africa has an extra internal ocean that defines also natural borders which the Sahara and the Sahel as well as the natural reserves of lands and jungles inhabited by different wild species and fictionally adopted by Tarzan as the Caucasian ruler of deep Africa.
Trade in Africa has been culturally driven by many factors between African countries that had led to confrontations, conflicts, wars but also establishment of cultural and tribal connections that contributed in the mixing of the African population and the crossing-over of regional cultures.
Within such diversified frame of interactions, Africans have built among themselves many historical facts that became the driving forces of cultural changes and cultural integration. One of the most important element in this orientation was the penetration of Islam from the East at the first place through Ethiopia and what use to be called Abyssinia and Bilad Sudan, Zanzibar with extension to the coasts of Mozambique followed by the driving forces of trade, slavery and gold transfer among and by the Moors Berbers / Amazighs that extended from the coast of the Mediterranean coasts to the north of Congo lands.
Global trends in international trade and economic, social, and political relations continue to forge closer integration among countries and regions. Trade in goods and services, and movement of capital and human resources continue to grow tremendously, assisted by accelerated sharing of technology across national and regional borders. However, all indicators show that Africa’s performance has been poor, marginalizing it in the global trading system.
In 2007, Africa recorded a high growth rate of about 5.8%. As in previous years, this was largely driven by strong global demand, high commodity prices, increased private capital flows, and improved macroeconomic management. In spite of this progress, however, there is still a huge deficit in the growth needed to meet the Millennium Development Goals. Population growth rates in many African countries still high do not help the situation either, as they erode the gains and lead to a less impressive GDP per capita growth rate overall.
Trade, particularly within the continent remains a key pillar for tackling the challenges Africa faces. Regional integration has thus emerged as the framework to address obstacles to intra-African trade. Reducing barriers to intra-African trade will create larger regional markets that can realize economies of scale and sustain production systems and markets as well as enhance Africa’s competitiveness.
This brings us to the focus of “The Importance of African Financial Integration to Promote Regional Trade and Investment on the Continent.”
What do we mean by African financial integration, and how can it promote regional trade and investment on the continent?
African financial integration means the progressive harmonization and integration of the financial sectors of African countries. This entails the harmonization of macroeconomic and monetary policies as well as the creation of institutions to manage the process. Its eventual aim is the creation of a monetary union, but however, elements of financial integration can be adopted, even without having a full monetary union, through the cooperation of regulators on wide-ranging issues or through the free movement of capital as one would have in a common market.
Strong financial integration can increase the efficiency of the financial sector, by reducing interest rates, decreasing the cost of credit, and increasing lending for investment activities. For example, too small African economies could become more competitive, diversify their portfolios, and reduce their risk premiums by integrating their financial sectors. Integrating the financial sectors also allows for more diversification of portfolios and an overall reduction of risk premiums, thereby increasing the overall strength of the sector.
So how will this promote regional trade and investment on the Continent?
First of all, in a broad sense, promoting investment is one of the main reasons for establishing regional integration. Regional integration generally enhances investments by enlarging markets, increasing competition, and improving policy credibility.
One of the important developments in the world economy that is of high importance to Africa is the rapid increase in South-South trade and capital flows. FDI from the South increased from just 5 percent of world outward flows in 1990 to 17 percent in 2005. While FDI to Africa is increasingly coming from Asia, especially China, India, and the Gulf States, at the same time, FDI flows within Africa increased substantially in 2006. The integration of the financial services will further boost FDI flows within Africa. Africa’s financial integration will make it much easier to move capital from one part of Africa to the other therefore increasing trade and investment within the continent.
Secondly, one of the major challenges to the growth of trade and investment on the continent has been the inadequate provision of financing to fuel this growth. The recent sub-prime mortgage market crises in the USA and its knock-on effects have served as a reminder of the fragility of international finance markets, Africa therefore needs to alleviate her financing constraints by mobilizing more domestic resources. Consequently, there is an imperative to develop regional financial markets that can meet Africa’s financing needs.
Africa continues to face significant financing gaps that cannot be met through donor funding or international lending. At the same time, the fragmented nature of the individual financial sectors makes them unable to meet these financing needs. Africa’s financial integration is therefore an essential step towards mobilizing domestic financial resources to address Africa’s financing needs for the promotion of trade and investment. Thus Africa’s financial integration has a direct role to play in the promotion of trade and investment in the region.
Africa Destiny: Fintech Infobytes Developing the Informal Sector
The liberalization of trade in services is probably the most sensitive one. Opening competition in financial integration should not be conducted for the restriction of initiatives and elimination of innovatives means and ways to develop financial transactions among businesses and productions that are not entirely integrated in the market and the circulation of values among the “transafrican” companies and institutions. Certain level of support and structures should be build to integrate the informal sector and its components in a local and regional fashion. Such support and recognition at the level of jurisdiction and institutions will allow the survival and expansion of such business operations that can be creative of values, integration of social classes otherwise marginalized and more importantly facilitate the creation of jobs amongs regions and sectors not receiving any incentives from the State.
Therefore, the establishment of the critical institutions regional forms of money circulation especially at the level of the digital money can be a leverage for such informal financial level of circulation and exchange of values among sections and areas of market that are predominant in many peripherical marketplaces and regions in Africa.
To this end, special Digital African Monetary Fund, Digital African Central Bank, and Digital African Investment Bank are to be created and adapted to these informal economic and financial clusters that can be leading to innovative resources regionally extracted and oriented toward regional integration among other similar clusters at the level of the rest of Africa.
The road of African Integration starts with Informal Rehabilitation and Revaluation facilitating the creation of regional clusters that are conducive to their growth as resources and operations developing local, regional and national value added sectors and productions creating jobs and participating the increase of economic growth and distribution of wealth among underrepresented social classes and marginalized regions.
EMPLOYMENT AND INFORMAL ECONOMY IN AFRICA
Designer, Producer, Salesman, and Self-Employed with Merchandising in the Front Street Store– Individual Ownership Micro-Enterprise
In Africa, data collected at the firm level is too limited to allow cross-country comparisons and support policy decisions. In most African countries, industrial censuses are not systematic.
Most African businesses are less productive than their international competitors. The Africa-Asia productivity ratio of the workforce fell from 67% in 2000 to 50% in 2018. Agriculture accounts for 50% of total employment and in some African countries, almost 91% of the non-agricultural workforce still works in the informal sector while in the productive structure in Africa, 22% of the net creation of employment is from recent small enterprises. (1)
Informal employment as a percentage of non-agricultural employment
The growth of Africa’s gross domestic product (GDP) since the 2000s has neither created enough quality jobs nor brought about sufficient improvement in the well-being of the population. The African continent will have to succeed in absorbing the 29 million young people who will enter the labor market each year between now and 2030. By comparison, they were only 14 million new entrants per year between 2000 and 2015. In addition, 282 million workers are currently in precarious employment and, despite their work, 30% are unable to lift themselves out of poverty.
AFRICA HUMAN RESOURCES MANAGEMENT: African “Laureates” crossing the Sea
Informal Sector: Moroccan Kid Food and Tea at the Barbary Coast Stand – Marrakech – Morocco
African Kids in Open Classroom – School Courant d’Air. Next Generation of African Educated Youth under the Sun, Renewable Energy
Globalisation of Drinks and Fastfood and Poverty Internationalisation of Canvas and Subcapitalism Social Madness
African “Laureates” crossing the Sea
French Startup Laureates in Silicon Valley
African Heraga Startup Laureates in Sebta Valley
African Eagles Flying Over Fences of Colonial Presidio in Africa – Morocco
Next Generation of African Educated Youth under the Sun
Africa Immigrants on the Top of the Line
African Heraga Startup Laureates in Sebta Valley
Africa Immigrants Seeking better condition on the other side of the border
Africa Immigrants in the Sea
African “Laureates” crossing the Sea
The informal business sector, which provides livelihoods for the majority of poor Africans, is an untapped market for the provision of public cloud services via mobile phone. Given the lack of a power supply shortage in most African markets, cloud computing presents an attractive preposition value for those who wish to eliminate the high costs of investing in infrastructure. However, power outages can deter the adoption of cloud services.
There is a need for an efficient, Effective, Available and Affordable Cloud Computing covering and connecting Africa made and managed by Africans that fits and responds to the cultural and regional specificity of African Traders [Maline Schoukara – les Boursiers de la Rue – System Débrouillardise] and African Ecommerce by the Informal Retail Sector, the Informal Services and the Entrepreneurial Start Tech.
The focus should be first made and conducted through the scope of the recent creation of African Continental Free Trade Area (AfCFTA) to establish a technological and logistical frame to deal with the important problem of the transformation of these informal units into real Digital Small, Medium and Micro Businesses.
One of the path can be the establishment of a sub-regional exchange network to promote transfers and exchanges of knowledge and experiences between small producers from different countries in a South-South perspective, thus helping to broaden the horizons of small producers.
Rizk – رزق in Arabic language and environment means livelihood and what God provides as means to survive and live in terms of material acquisition and belonging.
The best time to invest in Africa is now. However, foreign investors have not moved into the continent as quickly as expected because foreign investment decisions are often methodically overstructured. One of the major factors cited is too much risk. But risks and profits are inseparable twins: high-risk ventures are frequently associated with higher profits.
Africa is the most profitable region in the world. A report by the UN Conference on Trade and Development states that between 2006 and 2011, Africa had the highest rate of return on inflows of Foreign Direct Investment: 11.4%. This is compared to 9.1% in Asia, 8.9% in Latin America and the Caribbean. The global figure is 7.1%.
Examples of companies benefiting from bountiful profits in Africa abound: Sonatrach’s turnover from oil and gas alone was $33.2 billion; MTN Group’s turnover was about $10 billion; and Dangote Group’s turnover was $4.1 billion—all in 2017. A variety of factors drive up Africa’s profit prospects, making it imperative for European, North American, Asian, and Latin American businesses to invest, helping to foster the continent’s economic progress.
Africa’s economic growth prospects are among the world’s brightest. Six of the world’s 12 fastest-growing countries are in Africa (Ethiopia, Democratic Republic of the Congo, Côte d’Ivoire, Mozambique, Tanzania, and Rwanda). Further, between 2018 and 2023, Africa’s growth prospects will be among the highest in the world, according to the IMF. Good news: sectors where foreign companies could have a comparative advantage, such as banking, telecommunications and infrastructure, are among the drivers of current economic growth in Africa—creating clear investment opportunities for foreign businesses.
Africa’s growing, youthful population, amidst an aging population in most other regions, constitutes a formidable market. The continent’s population is predicted to quadruple from 1.19 billion in 2015 to 4.39 billion by 2100. In 2015 alone, 200 million Africans entered the consumer goods market. Maximizing this bourgeoning market size calls for actively engaging Africa’s structural economic transformation.
Africa’s youthful population contributes to an abundance of labor, which is one of the region’s highest potentials for labor-intensive industrialization and lowers production costs, leading to benefits that far outweigh the cost of doing business on the continent. The hourly wage in Africa is less than 50 cents (for example, it’s $0.27 in Mozambique, $0.34 in Nigeria, and $1.62 in Morocco) compared to $10.49 in the UK, $7.25 in the USA, and $6.57 in Japan. Engaging more foreign companies may help raise wage rates in Africa, improve labor market efficiency, and generate additional resources for those left behind on the age ladder.
Africa’s large deposits of natural resources promise a bright future for developing value chains. Agriculture and the extractive sectors are linchpins of national, regional and global value chains. Africa hosts 60% of the world’s uncultivated arable land. In 2015, the continent produced 13% of global oil, up from 9% in 1998. The growth trend of oil and natural gas production between 1980 and 2012 was amazing: from 53.4 billion barrels to 130.3 billion barrels for oil; for natural gas, from six trillion cubic meters in 1980 to 14.5 trillion cubic meters in 2012. As of 2012, Africa also controlled 53.9% of the world’s diamond resources.
In 2017, the Democratic Republic of the Congo alone accounted for 58% of the world’s cobalt (used in electronics production) while South Africa accounted for 69.6 % of the world’s platinum production in 2016 (used for catalytic converters and in other goods). Actively investing in adding value to these commodities, among other extractive activities, will shape global economic activities over the next five decades.
Finally, emerging domestic developments lend credence to actively engaging Africa’s economic transformation agenda. Some of these developments include improvements in macroeconomic prudence and overall governance. For instance, evidence from the 2017 Ibrahim Index of African Governance shows that Africa’s overall governance index improved at an annual rate of 1.4% since 2007, an improvement of more than 5% in at least 12 countries, including Côte d’Ivoire, Tunisia, Rwanda and Ethiopia. This improvement helps to mitigate perceived risks for many investors on the continent.
African governments should build on this positive trend to maximize foreign investments. This includes eliminating corruption; improving safety and security; strengthening macroeconomic environment, investing in quality education and skill development in science, technology and innovation; and avoiding a ‘race to the bottom’ syndrome, that gives unnecessary tax holidays and waivers to foreign companies.
Investing in Africa is good business and a sustainable corporate strategy for foreign investors. Advanced and emerging countries’ governments and the private sector should leverage these profitable, emerging investment opportunities. Using official development assistance to leverage and de-risk the investment climate in Africa is a key component in attracting FDI. Japan’s Nippon Export and Investment Insurance (NEXI) initiative, to insure a facility in Ghana, is a laudable effort that should be scaled up and supported by other actors.
Implementing the Sustainable Development Goals (SDGs) in Africa offers investment opportunities to foreign companies. Good examples abound: the Sumitomo Chemical’s insect-proofing mosquito nets technology is helping to fight malaria; the Sonatrach, JGC, and Hitachi’s desalinating seawater technology is accelerating access to clean water; and the Commodity Risk Management Group and the Sompo Japan Niponkoa’s weather index insurance is helping to mitigate climate change. In Africa, each SDG offers business solutions and investment opportunities to foreign companies.
The UN Development Programme (UNDP) is working with African governments and private sector actors to de-risk and improve the continent’s investment climate. Developing industrial strategies and clusters, promoting special economic zones, improving energy access, facilitating innovative funding, advocating for value chain development across countries and supporting investment promotion through the International Conference on the Emergence of Africa are some of UNDP’s efforts.
The best time to invest in Africa is now.
Dr. Ayodele Odusola is the Chief Economist, UNDP Regional Bureau for Africa
Sabonews covers education news, the latest jobs, opportunities, scholarships, and more.
March 28, 2023
Africa is a fast-growing continent, and many international investors recognize that there is enough of money to be earned there. There are many opportunities in Africa that many investors and companies are unaware of, particularly given the continent’s tiny but underdeveloped economy.
This is not to say that Africa has not evolved, as there are several countries that have undergone economic reforms and are one of the best places to invest when compared to other countries in other regions of the world, especially because the returns can be much higher than those found in the developed world.
Where To Invest Money In South Africa To Get Good Returns? In times of market turbulence and negative sentiment? According to data, African nations produced a 14 percent yearly return on investment, with Africa home to nine of the world’s fifteen fastest-growing economies. The African continent is not only rich in farmlands, but also in people and natural resources, and as the world’s population grows, these resources will become more important.
15 Untapped Business Ideas In Africa 2023
Here are 15 innovative and untapped business ideas and opportunities in Africa by 2023.
1. Data Storage & Cybersecurity
Every year, cybersecurity breaches cost African companies more than $3.5 billion. Because of the potential damages and losses at stake, cybersecurity is quickly becoming one of Africa’s most important emerging business opportunities.
Individuals and organizations of all sizes are under attack. From basic email scams to large-scale data theft, fraud, ransomware, espionage, critical infrastructure sabotage, and other harmful actions, the assaults vary from simple to complex.
According to the Africa Centre for Strategic Studies, up to 96% of cybersecurity events in Africa go unreported or unsolved, implying that cyber dangers on the continent are likely far greater than government figures indicate.
2. Internet Access and Communication Technology
The internet market in Africa is worth billions of dollars. It comes as no surprise that digital behemoths like Google and Facebook are working hard to enhance internet access for millions of Africans. Google’s Project Loon and Facebook’s Free Basics are just two of many audacious efforts to link Africa.
However, some astute African entrepreneurs are already making significant inroads into the internet access industry. One example is ‘BRCK,’ a Kenyan business that has developed a rugged internet modem device intended for tough settings with limited internet access and power.
The modem can switch between Ethernet, WiFi, 3G, and 4G networks and has an eight-hour battery life.
3. Off-Grid Solar Installation and Power Supply
While politicians in Europe and North America argue the best energy transition plan for their respective nations, Africa offers a clean and open slate for renewable energy, particularly solar.
The battle to distribute solar electricity throughout Africa has grown into a multibillion-dollar business that attracts entrepreneurs and investors from both inside and beyond the continent.
The enormous potential for off-grid solar solutions makes solar one of the most appealing business opportunities in Africa right now.
And there is a lot of demand.
Over 600 million Africans are fed up with waiting for electricity from centrally controlled power networks that are sluggish to install, inefficient, and unresponsive to the continent’s increasing power demands.
And, in a continent with over 300 days of sunshine in many areas, it’s difficult to match the value proposition of a device that bypasses the central power system and fulfills your energy requirements by tapping directly into the sun, a free energy source.
As a result, the African solar industry has expanded, and the number of companies in this sector continues to increase.
In Togo, the firm has also entered into a $4 million cooperation agreement with the government to provide off-grid solar equipment to 300,000 households.
Solar companies such as M-Kopa, Offgrid Electric, Azuri, Mobisol, Lumos, GLP, and others are strategically entering Africa’s off-grid solar energy industry in countries such as Kenya, Ethiopia, Nigeria, Ghana, and Tanzania, and have garnered about $1 billion in funding so far.
This will undoubtedly be an interesting sector to follow as more money and companies compete to meet Africa’s huge need for off-grid solar solutions.
4. Agriculture and Agribusiness
Africa is an excellent place to start an agricultural business because of its favorable environment and enough rainfall. Africa is well-known for its agricultural exports such as cocoa, coffee, and tea. As a result, agriculture is obviously one of Africa’s untapped business opportunities.
You may engage in chicken farming and either export or sell the eggs locally. You may also buy dairy or meat cattle. Having a milk processing plant will be advantageous since you will be able to process value-added dairy products such as yoghurt and cheese. Fish farming is also a profitable business venture in Africa.
Agriculture has a ready market, and Africa’s climate is favorable. This business is appropriate for nations with a favorable agricultural environment, such as Uganda, Tanzania, Ethiopia, Zambia, and Tunisia. More ideas may be found at Profitable Agro Processing Business Ideas.
6. E-Commerce Business Opportunity
In the E-Commerce sector, there is still plenty of opportunity for new ideas and niches. Despite the fact that E-Commerce behemoths like Amazon and eBay seemed to have the whole industry in their clutches at the time, Shopify created a new kind of E-commerce business that was a tremendous success.
E-commerce is one of the most lucrative companies in the world today since many people like to shop from the comfort of their own homes. Create a one-of-a-kind concept, such as Shopify, and you can be certain that international investors will be eager to collaborate with you.
7. The Green Revolution
Green and eco-friendly goods and services are becoming more popular throughout the globe. Because of the challenges posed by climate change, every solution that protects the natural environment, minimizes waste and pollution, and encourages reuse and recycling has become a major business opportunity.
Several African entrepreneurs and companies are already capitalizing on this potential and enjoying tremendous success.
Bethlehem Alemu’s Solerebels has become the world’s first fully eco-friendly footwear company in Ethiopia. This highly successful business manufactures footwear from recycled trash and sells it to consumers in North America, Europe, and as far away as Japan.
Thato Kgatlhanye, the creator of Repurpose Schoolbags, creates eco-friendly bags out of upcycled plastic shopping bags. There’s also Patrick Ngowi, a Tanzanian entrepreneur who has created a multi-million dollar solar-powered business. Another increasing potential in Africa is the generation of biogas from organic waste.
The Green Revolution will undoubtedly be a fascinating topic to follow!
8. Low-Cost Private Schools
The quality of education in public schools in Africa is rapidly deteriorating. This is due to corruption, a lack of knowledge, inadequate budget, and a rise in population.
As a consequence, most African parents choose private schools to guarantee their children get a superior education.
Establishing a private school is one of the business ideas in Africa that some entrepreneurs have already implemented, and they are seeing a decent return on their investment.
Education is the most potent weapon you can use in order to alter the world (Nelson Mandela).
Many African nations will not be able to achieve the Millennium Development Goal (MDG) of universal primary school enrollment by 2015.
Even after years of adopting the Sustainable Development Goal 4, there has been little progress in decreasing the worldwide population of out-of-school children (SDG 4).
According to the UNESCO Institute for Statistics, overall primary enrolment in Sub-Saharan Africa was about 101 million pupils, with the private sector accounting for 10% (or almost 10 million kids).
9. Payment Alternatives
Over $100 billion in transactions are still conducted in cash in Africa each year. For astute businesses, this represents a massive and profitable financial services potential.
Since its introduction in East Africa, M-Pesa has proven to be a remarkable mobile-based money transfer and payment service in Kenya and Tanzania, where the platform processes over 200 million person-to-person transactions each year.
There is a tremendous rush in other areas of Africa for Africa’s next major money transfer and payment business.
Several potential companies are vying for dominance in Nigeria, Africa’s largest economy. Paga, PayAttitude, SimplePay, and PayWithCapture are among the leading competitors.
Paga received a $13 million investment less than six months ago to grow its business both inside and outside of Nigeria. It’s a big gamble with a big chance of paying off. Payment solutions will be an important topic to monitor in the future years.
10. Outsourcing
Business Process Outsourcing (BPO) is currently a multibillion-dollar multinational business that is projected to reach $52 billion in market size by 2023, increasing at an annual pace of 11%.
The growing dominance of e-Commerce and the digital economy is driving a need for greater data, real-time services, and a presence across various platforms among businesses. As a consequence, more businesses are outsourcing their accounting, data processing, customer service, human resources, and supply chain requirements.
While India and the Philippines have benefited from the surge in IT outsourcing demand in the United States and the United Kingdom, Africa has emerged as a major participant in BPO for the worldwide Francophone market.
The number of BPO firms in Morocco, Tunisia, Senegal, Mauritius, and Madagascar is growing rapidly. Morocco, Africa’s BPO market leader, employs approximately 70,000 people in the sector. In Madagascar, the number of BPOs has increased from a few in 2005 to 233 in 2018.
11. Urban logistics
Africans are increasingly migrating to cities and metropolitan regions. Africa is presently the world’s fastest urbanizing region, with up to 1 billion people expected to live in urban settings by 2050.
By 2030, Africa will have 17 cities with populations of more than five million people, as well as 90 cities with populations of at least one million. The UN predicts that by 2050, the continent would have 14 megacities.
While large cities provide enormous economic opportunities, they also pose major logistical difficulties in terms of finding people and providing products and services.
A prominent example is the absence of a formal address system in many of the continent’s metropolitan regions.
Doing business in certain areas of Africa may be very difficult without precise and confirmed addresses. Identity verification, fulfilling consumer orders, and monitoring location data pose major difficulties for e-commerce firms, banks, energy providers, and a variety of local businesses.
Surprisingly, one Kenyan company has risen to the occasion. OkHi, founded by an ex-Google employee, identifies difficult-to-reach locations using a mix of GPS technology, photos, and phone location data.
OkHi has validated over 300,000 addresses and received $1.5 million in funding from investors to extend its service into other countries.
Another major logistical headache is last-mile delivery of products.
As the population of Africa’s metropolitan centers increases, it places a significant pressure on the country’s inadequate transportation infrastructure, making it harder to transfer products.
Road traffic in most African major cities is already a nightmare – and it’s only going to get worse!
The good news is that throughout Africa, a rising number of companies are attempting to address urban last-mile delivery issues by combining technology with a network of agents on motorbikes, automobiles, and trucks.
12. Real Estate
Real estate is one of Africa’s top business ideas for 2021. In Africa, the demand for property near cities and small towns is tremendous. The most sought-after investment is land ownership. It is also the top priority for new hires.
Purchasing a big plot of property and then subdividing it into tiny pieces for selling can provide enormous profits. This may be a profitable concept with a high probability of success. Again, land does not depreciate while demand rises every day.
These businesses, for example, are doing well in Kenya and Tanzania. More information can be found at How to Invest in Real Estate in Kenya and How to Start a Real Estate Business in Nigeria.
13. Affordable housing
Shelter is critical for human survival, but many Africans cannot afford the exorbitant costs of housing, particularly in urban areas. Affordable housing, such as trailer homes, tiny houses, or houses built with non-traditional building materials, can go a long way toward alleviating housing shortages in African cities.
This kind of business, which addresses life-threatening problems, is easily able to attract international investment or grants.
14. Low-Cost Healthcare
Africa is confronting a major health-care crisis. Public hospitals are underfunded, and the majority of physicians from the continent relocate to other developed continents. Strong economic development in recent years has contributed to the reduction of poverty in Africa to more than 43 percent of the population.
As Africa’s population grows, it will reach 2.5 billion by 2050. The area is facing a crucial challenge: laying the groundwork for long-term inclusive development. Many African nations continue to face high rates of infant and maternal mortality.
Malnutrition is much too prevalent, and most health-care systems are ill-equipped to cope with outbreaks and the increasing load of chronic illnesses such as diabetes. As a result, Africa’s health-care facilities are in disrepair. With Africa’s fast increasing population and substantial illness cases, entrepreneurs have a chance to offer cheap health care to Africans.
15. Fashion and Beauty
The African fashion and cosmetics industry is expanding at a rapid pace. The continent’s youthful population offers a ready market for fashionable clothes. Across Africa’s rapidly expanding metropolitan regions, various types of clothes, including locally-made textiles and imported designer brands, have become hot-selling items.
Hundreds of emerging stars in Africa are establishing profitable companies in the fashion and cosmetics industries. I’ll give you a few intriguing instances.
Suzie Wokabi is one of Africa’s most successful entrepreneurs, breaking into the beauty and personal care industry, which is controlled by multinational behemoths such as Unilever, Procter & Gamble, L’Oral, and Mary Kay. Suzie Beauty, the cosmetics business she founded in Kenya approximately 7 years ago, has grown enormously successful.
The list of potential African entrepreneurs who are establishing profitable companies in the fashion sector is lengthy. This would be a fascinating business to keep an eye on.Report this
management consulting focuses on developing long-term strategic plans, while business consulting focuses on improving operational efficiency and business processes. Business consultants often work with smaller firms, while management consultants work with large corporations.
African leaders have suddenly become believers in the benefits of international trade liberalism which have difficulty in countering and therefore fall back on the plane of the African continent. Africa has 43 members out of the 162 members of the World Trade Organization and African countries represent more than a quarter of the players in this institution. The WTO is moribund and was neutralized by the current and overlap of regional free trade agreements and especially by the fact that no agreement of universal scope has been concluded since 1995, when the Organization was created. “disaster” .
Faced with the protectionism of the current administration in Washington, African leaders continue to nurture a regionalized devotion to liberalism that is coupled with a return to the fold. These two vectors therefore allow African decision-makers to identify in free trade a mechanism that should make it possible to increase trade between African countries and strengthen Africa’s integration. Africa is not yet out of the mill since at the level of the world trading system, Africa continues to be reduced to a simple statistical indicator: less than 2 percent of world trade.
Railways and Path of African Integration
Africa’s inability to take advantage of its openness to trade is explained by the fact that it integrates into world trade from a low-value position and low producer of added value and wealth. Its status is that of a supplier of basic products and raw materials in very limited numbers, which confines it to the bottom of the global value chains.
Moreover, because of the hasty liberalization policies that African countries have experienced in the past, their efforts to industrialize, develop and transform raw materials and diversify have been thwarted, or destroyed, by the sudden and brutal competition imported products.
The reduction of their political space as well as the loss of sovereignty and control over their own instruments of economic and commercial policies born in this period continue to handicap many countries.
The train had in all the economies of the world, an addition of logistical value which is concentrated primarily in the movement of goods and manufactured products and other natural primary resources. This value transfer function between the various regions and urban metropolises was and continues to be the first and most profitable macroeconomic operation that has effects and impacts on the entire economic fabric and the growth of the circulation of value and its multiplication under the effects of the expansion of the market and the corresponding demand.
We are developing economic and structural integration with productive and operational complementarity both in terms of services and finished products or equipment and other consumption.
The train serves as a transmission belt between the various and complementary niches and the various Hubs as well as the major growth sectors and the creation of added value and high added value. This attribution can thus contribute in the financing and the launching of new technologies of transport and transformation of the circuits of the circulation and the distribution of the innovative goods.
Africa Tech Move: Social Cost or Possibility of Financial Cost
“Trade integration has been a powerful tool to elevate growth and improve living standards. […] Nevertheless, some people have been left behind in recent years as technology and robotization have squeezed the wages of certain communities “of workers,” comments Christine Lagarde, Managing Director of the IMF.
Should Morocco’s trade deficit for the year 2017 be placed in this explanation?
This deficit in Morocco’s trade balance widened by 2.6%, according to the latest statistics delivered by the Foreign Exchange Office on Tuesday 16 January. The difference between the country’s exports and its imports thus amounts to 189.8 billion dirhams (16.7 billion euros), against 185 billion dirhams the previous year. This is the second consecutive year that the trade deficit has increased.
Morocco finds in Sub-Saharan Africa the counterweight to the imbalances experienced by Western economies. To protect ourselves, we are witnessing the break-ups and the questioning of trade agreements, Brexit, the draft regional trans-Pacific agreement (TPP), Alena (Nafta), and the Transatlantic Partnership (TTIP or Tafta). At the same time, Western chancelleries are opting for the establishment of foreign policy based on their protectionist armada such as the administrative barriers of “quota”, the measures to stop the migratory flows, and that like decisions imposed by their unstable economic situation. These rantings had all weakened or reduced the growth of trade both with Morocco and the rest of Africa, giving impetus to the regionalization of trade and the search for outlets through a host of associations, integration, and of free trade.
A more fierce competition had thus infiltrated the commercial exchanges whose globalization had welded the links of its international chain. Africa must therefore return to its own local, regional, and peripheral resources and potentialities by strengthening the rapprochement between its economic components, namely the Regional Economic Communities and bilateral trade, financial, cultural, and in this case harmonization of the Digital Economy with the Knowledge Economy.
Free Trade, Entrepreneurial Education, Digital Economy and Knowledge Economy in Africa
It is through the establishment of a digital economy that those responsible for foreign trade and international financial relations can have access to reliable data and closer management of flows and their cyclical changes. The corresponding data can facilitate decision-making like any sectoral intervention without calling into question the commitments made to the rest of Africa and the world with which Morocco has cultural and commercial exchange treaties.
African leaders on Wednesday, March 23, 2018, signed three major economic agreements during the extraordinary session of Heads of State and Government of the African Union (AU) in Kigali, creating a Continental Free Trade Area (Zlec), perceived as essential to Africa’s economic development, through increased intra-African trade.
Some 44 countries signed the agreement establishing the African Continental Free Trade Area, while 43 heads of state signed the Kigali declaration for the launch of Zlec, and 27 signed protocols relating to the free movement of people, right to residence, and right of establishment.
Zlec gave birth to the largest free trade area in the world since the World Trade Organization which was established in 1995. Nineteen presidents attended as a number of prime ministers and government officials also signed for their respective countries.
Heavyweights, such as Morocco, Egypt, Kenya, and yet very protectionist Algeria, have signed the agreement, which will enter into force within 180 days after being ratified by the signatory countries.
“Some countries have reservations and have not yet finalized their national consultations. But we will have another summit in Mauritania in July and we hope these countries will sign then,” said AU Commissioner for Trade and Industry, Albert Muchanga.
Eleven countries out of the fifty-four countries of the AU are still missing, including Nigeria, whose President Muhammadu Buhari had decided not to make the trip to Kigali, after one of the largest unions in the country, Nigeria Labor Congress (NLC), had expressed its fears on the negative effects of the Zlec for the national economy. This union had also asked to be more involved in the negotiations and Mr. Buhari had agreed to “give more time to consultations”. Nigeria was one of the first economies on the continent, which had nevertheless coordinated the negotiations with Egypt. Other countries that have not signed the agreement include South Africa, and Benin, countries seeking taxes, especially on products transiting through their ports or roads, including Eritrea, Burundi,
Zlec must allow the gradual elimination of customs duties between member countries, thus promoting trade within the continent and allowing African countries to emancipate themselves from an economic system that is too focused on the exploitation of raw materials. The AU estimates that the implementation of Zlec will increase the level of intra-African trade by nearly 60% by 2022. Currently, only 16% of African countries’ trade is with other countries on the continent.
If the 55 member countries of the AU sign the document, the Zlec will open access to a market of 1.2 billion people, for a cumulative GDP of more than 2,500 billion dollars. Its advocates believe it will help diversify African economies and industrialize the continent while providing a unique platform to negotiate better trade deals with the outside world. Zlec is one of the key projects highlighted by the AU in its Agenda 2063, a long-term development program that aims to facilitate the flow of goods and people on the continent. At its last summit, in January in Addis Ababa, the AU had thus announced the creation of a single and liberalized market for air transport, including 23 countries of the continent.
Under the theme: “Creating an African Market”, the initiative falls under the AU Agenda 2063 It is estimated that if all 55 AU Member States ratify it, the agreement will bring together 1.2 billion people with a combined gross domestic product (GDP) of over US$2 billion.
At the same time, we propose the creation of a Common African Education Market (MACEA) to harmonize this momentum of commercial integration and transfer of values across the borders of Africa. Similarly, it is in digital education that Morocco can explore the infrastructural, logistical, and technological resources to draw on and establish the digital foundations for strengthening its position as a partner-competitor in its attempts to integrate both in the international, African market as well as for its candidacy for the Emerging Countries Square.
Knowledge-Economy is to be privileged in the formation of new strata of entrepreneurs who can form a new “Digital Technocracy” capable of guiding and exploring new horizons and digital applications in order to be able to coordinate and interconnect the different entrepreneurial resources in the same “ One Stop Shop” in order to have ease and efficiency in accessing, processing and formulating decisions and solutions that can help move up a gear in their entrepreneurial innovative momentum.
For this reason, we also propose the creation of an American Institute of Entrepreneurship in Africa in order to contribute to the establishment of the first milestones of such an enterprise and a need, that integrate the Digital Economy and the Economy. knowledge to strengthen regional economic integration in Morocco and within Africa (see details in the presentation below).
Disadvantages Facing Africa Integration: Tech Hurdles and Lack of Compatibility Among African Techs and Ecosystems
MOROCCO AND WORLD AFFAIRS – NETWORK OF PUBLIC MEDIA
Africa Computing and Free Trade Integration
Dr. Said El Mansour Cherkaoui 9/11/2020 – El Jadida – Morocco – Oakland – California
What are the prominent hurdles and hindrances for the Integration of Africa through e-commerce and Digital Business
★ Inadequate terrestrial broadband backbone
★ High costs of broadband access (last-mile) limit the growth of the cloud-computing market
★ Poor quality of service hampers the growth of cloud-computing services
★ Limited power supply hinders the growth cloud-computing market
★ Absence of data protection and security legislation.
★ IF YOU IDENTIFY AN ADDITIONAL HURDLE / HINDRANCE FOR AFRICA TECH ADVANCEMENT, PLEASE FEEL FREE TO WRITE IT IN THE REPLY FORM LOCATED AT THE BOTTOM OF THIS ARTICLE. THIS WILL SHARE YOUR INPUT WITH THE REST OF AFRICA …
★ Informal Economy ★
★ Ecommerce ★ Digitalization ★ Africa ★
“In Africa,the provision of cloud services is mostly supply-side driven, with global and some local IT companies acting as intermediaries, with a few exceptions, where South African-owned companies with a pan-African reach, like Dimension Data and Internet Solutions compete directly with the global players and large local IT companies, like Seven Seas Technologies in Kenya.
On the other hand, telecommunications companies are trying to differentiate their offerings and broaden their revenue streams by leveraging their existing infrastructure and offering cloud services. The services offered by these entities can be differentiated between those intended for large-scale enterprise purposes, SMEs, individual end users, or for personal use. The focus until now has been on Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), which is where cloud development is and where issues of competitiveness will become most pertinent; all of which raise distinct questions around business modelling and regulatory challenges.” (2)
African Continental Free Trade Area
The AfCFTA Country Business Index: Understanding private sector involvement in the AfCFTA: The narrative around a successful African Continental Free Trade Area (AfCFTA)—its potential to increase intra-African trade by 15 to 25 percent, or $50 billion to $70 billion—is promising, but if African businesses do not efficiently utilize this landmark agreement, its ultimate success will be limited.
Since the private sector is directly involved in cross-border trade, it is a major stakeholder and beneficiary of the AfCFTA.
Thus, to better understand how African businesses are approaching the AfCFTA and, more importantly, how the AfCFTA can best support those businesses through trade, the United Nations Economic Commission for Africa (ECA) created the AfCFTA Country Business Index (ACBI).
The AfCFTA is one of the flagship projects of Agenda 2063: The Africa We Want. It is a high ambition trade agreement, with a comprehensive scope that includes critical areas of Africa’s economy, such as digital trade and investment protection, amongst other areas. By eliminating barriers to trade in Africa, the objective of the AfCFTA is to significantly boost intra-Africa trade, particularly trade in value-added production and trade across all sectors of Africa’s economy. …READ MORE
The ACBI is a new AfCFTA-focused, ease-of-doing business index and is based on a robust theoretical framework and data collection process. It enables relevant policy makers to identify bottlenecks in intra African trade at a country level, which informs the barriers impeding effective AfCFTA implementation from the perspective of the private sector.
It aims to inform African policymakers on the trade barriers and guide AfCFTA national strategies.
The ACBI aims to ensure that the African Continental Free Trade Area delivers on its projected sustainable development promises, especially for women-owned and small- and medium-sized businesses (SMEs).
The ACBI captures three dimensions relevant to the understanding of the AfCFTA and related negotiations:
1. The ease of trading goods across Africa; 2. Firm awareness and use of African free trade agreements (FTAs) and the AfCFTA; 3. Business environment related to trade in services, intra-African investment, intellectual property rights, and competition policy. https://lnkd.in/eBSunxsu
✈️ African Continental Free Trade Area
The African Continental Free Trade Area (AfCFTA) is expected to transform African economies and lead to an increase in intraregional trade and inward investment. There is much progress in negotiations but the ultimate benefits depend on the way AfCFTA commitments are implemented. National AfCFTA Implementation Committees (NICs) can help in this endeavor.
The year 2023 is the African Union (AU) Year of Acceleration of AfCFTA Implementation. In line with the Decision of the 31st Ordinary Session of the Assembly of Heads of State and Government of the African Union (the AU Assembly), held on 1–2 July 2018 in Nouakchott, Mauritania, Member States are required to set up NICs to facilitate implementation of the AfCFTA Agreement.
This has led to much interest in Member States in what effective NICs look like and what they do. The role of the AfCFTA Secretariat in supporting the formation and operation of NICs is paramount. Two features associated with the AfCFTA project are important for implementation.
First, AfCFTA implementation structures will need to be designed in ways that align well with existing trade negotiations and implementation structures. Second, the AfCFTA is not only a Free Trade Agreement but also a trade strategy involving a range of complementary instruments that address implementation, monitoring, payment systems, adjustment, and industrial policy.
This briefing, aimed at the AfCFTA community concerned with implementing the AfCFTA, identifies appropriate institutional forms for NICs as well as 10 core functions that effective implementation agencies will carry out. It also outlines a potential five-step AfCFTA template for effective NIC formation and operation.
Trade, Industry and Competition Acting Director-General, Malebo Thompson, says the successful implementation of the African Continental Free Trade Area (AfCFTA) is expected to accelerate growth […] July 27, 2023
From negotiations to implementation: Building Effective AfCFTA National Implementation Committees
South Africa’s launch of preferential trade under the African Continental Free Trade Area (AfCFTA) ceremony is scheduled for January 31, 2024. The opening ceremony of the AfCFTA Council of Ministers (COM) Responsible for Trade Meeting will take place on January 30, 2024.
In October 2022, the AfCFTA launched a “pilot phase” called the Guided Trade Initiative (GTI). The GTI pilots preferential trade among eight member states for 96 identified commodities. These states include Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia.
The AfCFTA Agreement came into force on May 30, 2019, and 47 countries have ratified it as of November 2023. South Africa is a member of the AU and endorsed the AfCFTA negotiations in 2015.
South Africa has several initiatives related to regional integration in Africa, including:
SADC: South Africa joined the Southern African Development Community (SADC) Treaty in 1994, and is responsible for finance, investment, and health in the region. SADC’s main goals are to achieve economic development, peace and security, growth, and alleviate poverty.
Constellation of Southern African States: South Africa has tried to influence the region by establishing a Constellation of Southern African States.
Integrated Country Strategy (ICS): South Africa’s ICS promotes continent-wide economic development by supporting stronger regional economic ties.
Economic Integration in Africa (AfCFTA): In 2018, 44 African heads of state signed a framework to establish a single continental market for goods and services. In 2018, South Africa joined the framework.
Africa RI Program: This program fosters collaboration on regional public goods, such as trade, energy markets, and value chains. It also brings together countries, regional bodies, and partners to tackle regional public bads such as climate change, food insecurity, and FCV.
Similar Topics and Additional Reading Published by Said El Mansour Cherkaoui On Africa Integration
Said El Mansour Cherkaoui March 5, 2023 – Gold dinar, Spain, Almoravides. Yusuf ben Tasfin (1087-1106), struck at Segilmesa (Sijilmasa) in 480 AH (1087 A D). Compilation of… Read More
Bibliographic Notes:
Source: What is Africa worth in the international trading system? November 24, 2015 Cheikh Tidiane Dieye
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Globalisation of Drinks and Fastfood and Poverty Internationalisation of Canvas and Subcapitalism Social Madness
African “Laureates” crossing the Sea
Said Cherkaoui 24 