African CEOs have expressed optimism about their business and economic growth over the next 12-18 months, particularly with regard to intra-African trade as a result of the African Continental Free Trade Area (AfCFTA).
That’s according to a new survey of African CEOs from 46 countries conducted by Paftrac, the Pan-African Private Sector Trade and Investment Committee.
They believe that global recovery, led by greater demand, will drive Africa's economic recovery. Interestingly, the survey finds that their positivity stems more from their faith in international and regional trade strategies and agreements such as enhancement of trading opportunities through AfCFTA, rather than as a result of national economic recovery strategies like ease of lockdown restrictions or better national business climate.
“The positive sentiment expressed by survey respondents demonstrates the potential of the AfCFTA and the eagerness of Africa’s private sector to take advantage of the market access opportunities it offers,” says Paftrac chair Pat Utomi. However, access to trade information, trade-enabling infrastructure, and trade finance emerged as key constraints that need to be addressed to ensure that intra-African trade opportunities are exploited for the benefit of African SMEs.”
The majority of respondents see AfCFTA as a game-changer. Over 71% believe that the agreement will encourage them to invest to grow their business regionally. More than half the respondents (57%) also believe that the AfCFTA will open up new markets to export regionally and provide the necessary frameworks to export more regionally (62%). The four top export destinations in Africa are South Africa (27%), Ghana (25%), Kenya (25%) and Nigeria (19%).
The key challenges to Africa's economic recovery prospects are identified as a lack of access to finance (64%), the ongoing impact of the Covid-19 pandemic on economic opportunities (61%), and a slowdown or lack of public sector investment and expenditure (48%).
