TULANI NGWENYA
MBOMBELA – The African Free Trade Area agreement (AfCFTA) is currently the largest free trade area in the world, with a combined GDP of $3.3 trillion according to Forbes. The free trade area came into effect on the first day of 2021. Mpumalanga is set to benefit from this agreement.
Mpumalanga is set to benefit in a huge way as AfCFTA is estimated to bring Africa annual income gains of more than $130 billion per year. Mpumalanga as a mega producer in farming, mining, arts and crafts will benefit enormously from the free trade area.
Mpumalanga business people are now poised to benefit from the 90% of taxed intraregional trade flows being contracted under the AfCFTA, current flows are due to increase by around 16%, or $16 billion.
South Africa is one of the first countries to ratify the agreement on the free movement of persons across borders and also joined the Single African Air Transport Market (SAATM) that is set to support greater continental connectivity by opening up Africa’s skies and boosting the travel sector.
Bongani Ndlovu a Middleburg Economist and consultant speaking with Timeless News said that, “The AfCFTA) has potential to uplift locals however it is crucial to note that SMEs and small businesses that have been formalized will benefit from this agreement.”
Ndlovu also said that, “Sole traders and small businesses should start formalizing now and also becoming part of organizations and associations for them to be capacitated and also aided in putting their paper-work in order.”
BREXIT for Mpumalanga under the AfCFA holds opportunities for untapped export potential to the United Kingdom and other European markets. “The potential is huge however as unregistered small business operators like here in Delmas who are not formalized, I think it will takes years for us to benefit,” said Senzo Mabaso an arts and craft entrepreneur.
The elimination of tariffs on most goods, the liberalization trade of key services and the address of non-tariff obstacles to intraregional trade will benefit 1.3 billion people on the African continent. Mpumalanga will have a share however small businesses that are not formalized, need to organized and registered so that they have the requirements to be able to trade and benefit from AfCFTA.
Mr Masango, a small business owner in Mbombela also reflected similar concerns while talking to Timeless News saying, “It is not clear whether we will benefit from this AfCFTA because some of the policies do not cater for the small business person like me.
I am not formally registered and from what we have gathered, the big players will benefit first and also the SMEs. I hope that our Association will start talking about this and advice us on how to position our businesses for us to benefit.”
The African Department of the International Monetary Fund (IMF) has said that, “The pandemic has presented a historic opportunity to build a better future,” It went on to point out that “trade integration, along with domestic reforms to improve revenue mobilization, digitalization, competition, social safety nets, and climate-change mitigation, will be critical for the region’s resilience, growth and job creation”.
