Businesses in Asian countries like the Philippines are encouraged to explore more trade opportunities with Africa, a continent presenting significant potential for growth with its large population and its fast-growing economies.
According to the World Trade Centers Association (WTCA), investments from Asia will be boosted further by the ratification of the African Continent Free Trade Area (AfCFTA), which creates the largest free trade area in the world.
“Potential sectors for investment in Africa include agriculture, agro-tech, food processing, manufacturing, mining, power and energy, and information and communications technology (ICT) among others,” said WTC Accra Executive Director Edem Kofi Yevutsey at the sidelines of the WTCA General Assembly in Ghana, Africa.
The AfCFTA, which took effect on May 30, 2019, brings together the 55 countries of the African Union (AU) and eight regional economic communities (RECs) — and enables Africa to integrate more seamlessly into global supply chains. Its mandate AfCFTA is to create a single continental market that represents GDP of $12.7 trillion.
Africa’s 1.4 billion people represent the fastest-growing population on the planet. It is also among the youngest, with 15.7 being the median age and with its young population poised to make its mark economically and geopolitically.
The AfCFTA is expected to create more opportunities for cross-border trade and investment between Asia and Africa by diversifying the continent’s exports, strengthening the region’s integration into the global economy, and attracting more foreign direct investments. Among Africa’s main Asian trading partners are China, Malaysia, Singapore, India, and Vietnam.
“Macro trends in four key sectors – automotive; agriculture and agro-processing; pharmaceuticals; and transport and logistics – and across Africa’s growth potential as a whole reveal tremendous opportunities for business expansion as population, income, and connectivity are on the rise. The AfCFTA will unlock these opportunities, but not without disruption and change in business and production dynamics, especially due to increased intra-African trade,” said H.E. Wamkele Mene, Secretary-General of the AfCFTA Secretariat in the January 2023 World Economic Forum Insight Report ‘AfCFTA: A New Era for Global Business and Investment in Africa‘.
The Philippines had already expressed interest in further exploring the African market in order to grow overseas demand for its consumer goods. In 2019, former Department of Trade & Industry Secretary Ramon Lopez said the agency was studying which specific African countries the government would tap and was hoping to actively push for this initiative the following year until the pandemic hit.
Lopez reported that a handful of companies do business with African countries, exporting goods like processed meat and coconut products. Egypt was the Philippines’ 62nd largest trading partner at the time, exporting tuna, skipjack, and bonito, as well as desiccated coconuts and printed circuits. Meanwhile, Ethiopia was the country’s 117th trading partner, with ethylene polymers, machine parts, and airplane parts among its exports.
Expected to further sharpen the global focus on trade and growth opportunities between Africa and Asia is the 2023 World Trade Centers Association (WTCA) General Assembly being held in Accra, Ghana. The assembly brings together WTCA members and their global business networks consisting of leaders from business, government, academia, media, and international organizations, reflecting the WTCA’s diverse global footprint.
“This General Assembly and the opportunities it creates for businesses to network and connect, will highlight the unique trade and investment potential presented by Africa as the world’s next economic frontier, especially in light of the new AfCFTA,” said Yevutsey.
With the theme of “Towards African Economic Integration and Enhanced Global Presence,” the 2023 General Assembly is focused on business connections on the African continent with buyers, sellers, and investors in various sectors and industries.
