Fighting the COVID-19 Today; A reflection on Positioning the AfCFTA for the Future

Fighting the COVID-19 Today; A reflection on Positioning the AfCFTA for the Future

This article was first published on Mordern Ghana website

The COVID-19 pandemic has surfaced as an unprecedented calamity post World War II which will engage the world for at least the next decade; researching about, and discussing it as a socio-political, economic, medical or scientific phenomenon.

History has documented a plethora of similar or much deadlier pandemics to serve as lessons for the world’s geopolitics and medical research. The dichotomy lies in the fact that this dispensation is deemed as having advanced in medicine, science and technology to deal swiftly with such false majeures ever to be encountered.

This must also be looked at on the balance of the relative demographics of the periods when such analysis is being considered. The devasting effects of the current pandemic have not discriminated against and respected any single state or bloc in the international community.

Currently, the search for solutions has been approached from either the perspective of law, science, technology, spirituality, myths and conspiracies; and perhaps by the conglomeration of all. What is indisputable to all the facets is that none of the approaches has so far proven potent to annihilate the spread and destabilise the debilitating pestering of this “demon”.

In December 2019, the novel coronavirus pandemic was first reported in Wuhan, Hubei Province of China and has so far affected over a hundred countries in all the six regions under the World Health Organisation (WTO).

Every day, different information circulated throughout the world through the official communication network of the WTO about the origin of the disease and the actual and pipeline efforts to study it; including the search for treatment and the prevention of the increase in human infections. So far, the COVID-19 pandemic has led to the disruption and cancellation of academic activities, scientific conferences, sporting gatherings, international trade and forums, social and personal distancing, travel and flight restrictions as well as the introduction of novel preventive measures and protocols led by the WHO.

Africa stands a greater risk of the rate of infections and is also challenged with mitigating the effects of this pandemic. It is no secret that the health infrastructure, personnel, technology and quality on the continent do not match up to its demand and population requirements. National efforts so far have not been commendable with the least of preparedness and research to complement the efforts of the world.

Health pundits, Civil Society Organisations (CSOs) and citizens are generally uneased and sceptical about how the continent may contain this and manage the aftermath repercussions successfully without compromising on its already fragile health systems, trade arrangements and the general economy as a whole.

In July 2019, the African Union (AU) launched its flagship continental free trade area agreement, the African Continental Free Trade Area (AfCFTA) at its 12th Extraordinary Summit, which was hailed as the continent’s boldest step so far to reaching one of its objectives from the Abuja Treaty of 1991 to establish a continental market through the vehicle of the African Economic Community. As the continent got on the marks to go with the first phase of the agreement, the hopes were up in the skies to see the continent achieve its objectives on trade in goods and services, until this pandemic took the world unawares with the speed of a hurricane.

The world will continue to work assiduously through research in the coming days to find preventive and curative antidotes to this menace. But the ravaging effects on the world will be present and monumental to contend.

The environmental, social, medical, economic, political and legal ramifications have already been contemplated. The measures in place now and the preparations by the AU to handle these effects on the timelines and programmes of the AfCFTA surface as the challenges to be confronted.

Africa cannot do things as usual and throw its hands in despair in wait for the scraps and be scrammed from the discoveries of another country, continental bloc or even from the WHO; indications are that the continent will not be able to afford the quality and quantity of such solutions. Africa’s efforts must be counted as part of the global investment in funnelling for a solution to this pandemic.

It is a blessing in disguise for Africa to reinvent the wheel and take the opportunity to fashion out plans and invent solutions to this malaise.

By now, one would expect that the AU had considered plans to call an Ordinary Meeting by any convenient means at the level of Heads of State and Governments or at the Ministerial level to discuss how the continent could pull its resources together; marshal it’s scientific and medical human resources; rump up its efforts in a manner to be coordinated and offered to the countries so that the menace does not cross over to neighbours who have not yet been affected or have mitigated their cases.

It is suggested that there must be an integrated effort to discuss the tried, tested and trusted sources for prevention and further spread especially at homes, households and workplaces, taking cognisance of the cultural and economic demographics of the continent.

Again, such an effort must be focused on brainstorming on the continent’s health security and safeguards for the present and future. Health guidance, counselling and planning cannot be underestimated at this juncture.

World trade volumes are pushed by Micro, Small and Medium Enterprises (MSMEs) and statistics show that MSMEs constitute a significant percentage of the trading activities on the continent. The AfCFTA has been projected to rely heavily on the sustainability and resilience of the MSME sector of the member countries.

In the wake of the pandemic, it has been noticed that stimulus packages are being advanced in some developed nations and other African countries to shore up their respective households and businesses. This trend may continue if the infectious trajectory of the disease persists for a few more months.

As these individual country strides are commended, it must be encouraged to find expression at the continental level to have an African Continental Business Fund (ABSF) to solicit and advance the needed financial support to the MSMEs as the livewire of the AfCFTA.

Trade finance has become a critical global challenge for the attention of key trade organisations such as the International Chamber of Commerce (ICC), its affiliates and the World Trade Organisation (WTO). It is therefore strongly suggested that valuable attention is given to this sector to be adequately robust to lead the new order after the victory over the COVID-19 in future.

MSMEs continue to be frustrated by identifiable financial gaps than multinationals with less access to external financing. The reliance on commercial banks, non-financial and credit institutions has been largely unreliable.

Most African businesses expected to be the anchors of the continental free trade agreement have stuck to traditional means of trade finance such as personal capital, family incomes, loans and overdrafts which have been found to be not just woefully unreliable and inadequate, but also expensive to be serviced due to some demand and supply considerations.

It is suggested that the AfCFTA Secretariat exploit other sustainable and reliable means of trade financing such as factoringand other electronic financing platforms like TReDS. Arguably, one of the AfCFTA’s major competitors in international trade will be the European Union (EU), whose businesses do not have such constraints and have for decades leveraged on trade financing schemes such as factoring to support their businesses. Fortunately, the African Export-Import Bank (Afreximbank) has over the years led the way in financing African business enterprises through the promotion of factoring.

In the wake of this present global pandemic, it has offered a whopping $ 3 billion as a buffer to cushion businesses that will suffer from the anticipated rippling effects of the pandemic in future.

This effort must be a reckoning to the AfCFTA Secretariat to think outside the box in search of such interventions to absolve the aftermath shocks of the pandemic on the structures and activities of the AfCFTA.

In conclusion, the world of commerce after this pandemic will change significantly and “ruled” by those countries and blocs whose industries, research, trade and technology will be robustly resourced and positioned to take advantage of the new market of knowledge, utilities and basic essential commodities of life.

Access to trade finance is predicted to be the fundamental contrasting issue between developed and developing countries. Trade procedures and facilitation to move goods and services more efficiently across borders to other parts of the world must inform the thinking and planning of the AfCFTA in the short and medium-term.

Technical assistance in trade facilitation to offer the needed incentives for importers, exporters and players of international trade on the continent in reducing delays and cost of doing business across borders is non-negotiable.

This may entail appropriate and adequate infrastructure, customs, rules and regulations. 

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