Hi, Quartz Africa readers!
Thursday, May 30 is a notable date in African economic history. It was, of course, the day the African Continental Free Trade Area (AfCFTA) came into force after which it comes to market on July 7.
In a nutshell it means a single market of goods and services for 1.2 billion people with an aggregate GDP of over $2 trillion. UNCTAD, the UN’s trade body, predicts reducing intra-African tariffs under AfCFTA “could bring $3.6 billion in welfare gains to the continent through a boost in production and cheaper goods.”
One of the more stark economic data points about Africa is just how little African countries trade with each other, just 16% of total continental trade in 2014—which, even if you assume underestimation and doubled it, would still be noteworthy. The UN Economic Commission for Africa thinks AfCFTA has the potential to raise intra-African trade by 15% to 25%, or $50 billion to $70 billion, by 2040.
Brookings’s analyst Landry Signé estimates that if AfCFTA works as intended, Africa will have a combined consumer and business spending of $6.7 trillion in 2030.
But Signé also notes the devil will be in the detail of ongoing complicated negotiations for implementation. Among issues to be ironed out include understanding how “most favored nation” (MFN) deals get worked out between all the countries given the near total reciprocity this deal would need.
Another sticking point will be the “rules of origin” debate which decides which products get the preferential tariffs depending on its classification. “Is a blouse made from Chinese silk, designed and stitched in China, but packaged in Kenya eligible to receive AfCFTA preferential tariff rates? What if it is made of imported Chinese silk, but stitched together in Kenya?,” ask the Brookings analysts.
Talking of China, which is currently engaged in its own trade battle with the United States, watch for the Asian giant to have an undue influence on how AfCFTA really plays out—for better or worse.
But the more straightforward concern about the negotiations for AfCFTA implementation is that they might not be, well, straightforward. The concern is they could instead add complexity to existing agreements across regional bodies like ECOWAS in West Africa or EAC in East Africa.
And while many of the free trade discussions are often about moving goods around the continent it’s worth noting like elsewhere in the world, exports of African services grew more than six times faster than merchandise exports between 1998 and 2015. Expect services to grow even faster across borders as more African startups start to gain traction offering everything from fintech services to online education as they disrupt traditional sectors.
— Yinka Adegoke, Quartz Africa editor
STORIES FROM THIS WEEK
Africa is playing a starring role in the NBA Finals. Toronto Raptors are competing in their first ever NBA Finals thanks in part to the acumen of Masai Ujiri, their Nigerian president of basketball operations, whose long journey to the top has seen him go from being an unpaid NBA scout to running a near $2 billion leading franchise as well as emerging Cameroonian star Pascal Siakam who led his team to a dramatic Game 1 victory.
African countries should stay firm with China’s Huawei—regardless of Trump. The recent move to limit Huawei’s access to American components is impacting the Chinese giant globally. But W Gyude Moore makes the case for why African governments should not sever ties with Huawei given the continent’s simpler strategic interests. Indeed, the African Union is deepening its ties with Huawei with a new 5G deal this week.
How waste is helping a Kenyan furniture business to test new frontiers. Across the world, companies are being encouraged to adopt green technologies and deploy climate mitigating practices while making their products. For FunKidz, a Nairobi-based brand gunning to be the IKEA of Africa, creating sustainable and eco-friendly furniture has become a necessity rather than an option, reports Abdi Latif Dahir from Nairobi.
Liberians are worried their country is sliding into economic uncertainty under president Weah. Just 18 months since he took office amid celebration and high expectations, the administration of president George Weah, the former soccer star, is set to face national protests. Prue Clarke and James Harding Giahyue report from Monrovia that the poor handling of the economy and a continued refusal to create a special court for war crimes has brought things to a head.
African governments should brace themselves for a British “prime minister Boris”. Often seen as a figure of fun but a wily politician, Boris Johnson is currently in pole position to be the next British prime minister. However Olu Alake writes that Johnson, who often romanticizes Britain’s colonial past, has had a worryingly condescending relationship with Africa and Africans as a newspaper columnist, mayor of London and most recently as an ineffectual foreign secretary.
On returning to Uganda, Museveni’s staying power and the significance of Bobi Wine. In a personal essay, author Musa Okwonga reflects on his visit home to Uganda for the first time in 20 years. Despite talk of a much changed country, he notes with irony the lack of change in the country’s government and how its clumsy attempts to maintain the status quo empowers a young opponent.
CHART OF THE WEEK
Motorcycle-hailing startups are battling each other—and the law—to win in Africa’s largest city. The idea of on-demand, flexible motorcycle taxi service to get around hours-long traffic jams and congestion in Lagos is winning over customers and investors, finds Yomi Kazeem. The startups emphasize their increased attention to safety to differentiate from local commercial motorcycles—known locally as okadas—who are prone to being involved in accidents.
OTHER THINGS WE LIKED
The migrant who went undercover to document smuggling crimes. In 2017, a Ghanaian migrant who grew up wanting to be a spy took on his first mission: traveling from Ghana across the Sahara desert to Algeria through smuggling networks while filming crimes through $37 “spy spectacles.” For BBC Africa Eye, Joel Gunter writes of this migrant’s risky journey of service and survival.
The death of the River Nile. Egypt is struggling as its most important source of water the Nile is drying up. It’s affecting everything from farming and fishing to life in its major urban areas, particularly Cairo. For Al-Monitor, Ayah Aman reports on how life is changing. “The water situation in Egypt is critical, says a government official. “We have reached a point where the available water quantities set the limits for economic development. We have become one of the driest countries in the world.”
How Nnedi Okorafor is building the future of sci-fi from Flossmoor. In a Chicago Tribune profile, Christopher Borelli interviews the Nigerian-American writer whose pioneering work in a genre she defines as “Africanfuturism” genre (as against the more common Afro-futurism) is the subject of interest from HBO to Marvel. As he finds, a teenage diagnosis and an early interest in tennis mean things could have turned out very differently.
Studying the challenges facing Johannesburg. The University of Witwatersrand is providing PhD and postdoctoral scholarship to proposals aimed at understanding the policy challenges such as poverty, violence, and inequity facing South Africa’s biggest city. (June 17)
The Goethe-Institut African writer’s residency. African writers of all literary genres can apply to access two or three residencies of four weeks in Ouagadougou, Burkina Faso to write or finish their works. (July 7)
Next Einstein Forum ambassadors. The science and innovation-focused forum is looking for Africans younger than 42 years to attend the biennial NEF gatherings and champion local public engagement activities. (July 31)
KEEP AN EYE ON
Africa Prize for Engineering (June 4). The four finalists of the prestigious award, who come from Kenya, Nigeria, South Africa, and Uganda, will pitch their innovations to a panel of judges and a live audience in Kampala, Uganda.
Kigali Fashion Week (June 5-8). The annual fashion event celebrating the nascent but vibrant Rwandan design scene will take place in the capital Kigali.
Nairobi Film Festival (June 6-16). The annual festival will feature about 20 films from across Kenya, Zimbabwe, Sudan, Brazil, Ghana, and more.
*This brief was produced while listening to Black Truck by Mereba (Ethiopia/USA).
Our best wishes for a productive and thought-filled week ahead. Please send any news, comments, suggestions, Funkidz furniture and NBA finals Game 2 tickets to email@example.com. You can follow us on Twitter at @qzafrica for updates throughout the day.
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