eBusiness Weekly
Prosper Ndlovu
THE imminent operationalisation of the African Continental Free Trade Area (AfCFTA), will boost the region’s connectedness with the global community, which is critical in attracting increased investments and a flourishing business, international logistics company, DHL has said.
Once in force, the trade deal is set to be the biggest since the formation of the World Trade Organisation in 1995, connecting about 1,3 billion people across 55 African countries with a combined gross domestic product (GDP) of $3,4 trillion, according to the African Development Bank (AfDB).
Zimbabwe, like the rest of region peers, is readying itself to tap into the economic gains of this widened regional trade market. Economists say the historic AfCFTA, whose implementation becomes effective next month, provides a tangible opportunity for the continent to transform its approach to trade.
In its latest Global Connectedness Index 2020 report, DHL says it would invest more on the continent as it projects that the AfCFTA would be a game changer in the post-Covid-19 recovery mainly for sub-Saharan Africa. Stronger global connectedness, says the logistics firm, would accelerate the world’s recovery from the Covid-19 pandemic, as countries that connect more to international flows tend to enjoy faster economic growth.
“We look forward to the upcoming ratification of the African Continental Free Trade Agreement (AfCFTA), which has the potential to boost the region’s global connectedness, facilitating the movement of people, investments and businesses across the region,” said Hennie Heymans, chief executive of DHL Express Sub-Saharan Africa.
“There are still many opportunities for the region to improve its connectedness, and DHL will continue to invest in the region to connect people and improve lives.”
Regional trade experts are agreed that the AfCFTA presents a lucrative window for regional manufacturers and a range of service industries, including micro, small and medium-sized enterprises (MSMEs), women and the youth. Governments and the private sector would have to up their game in addressing inherent bottlenecks that hinder competitiveness and quality standards.
While Covid-19 has disrupted business and life around the world, the DHL report notes that the pandemic has not severed the fundamental links that connect nations.
“This report shows that globalisation did not collapse in 2020, but that the pandemic did transform – at least temporarily – how countries connect,” said the logistics firm.
“It also demonstrates both the dangers of a world where critical linkages break down and the urgent need for more effective cooperation in the face of global challenges.”
The report further highlights that global trade and capital flows have already started to recover while international data flows surged during the Covid-19 spread as in-person contact migrated online, boosting international internet traffic, phone calls and e-commerce.
“The current crisis has shown how indispensable international connections are for maintaining the global economy, securing people’s livelihoods and helping companies strengthen their trading levels,” says John Pearson, chief executive officer of DHL Express.
This emphasises the importance of global supply chains and logistics networks in keeping the world running. The DHL report, now in its seventh edition, is the first comprehensive assessment of globalisation during the spreading Covid-19 pandemic. It employs more than 3,5 million data points to track international flows of trade, capital, information and people across 169 countries.
