The African Continental Free Trade Area (AfCFTA) Agreement, ratified in 2021, is a historic milestone for the African continent. The past two and a half years have underscored the need for cohesion, interconnectedness and unity in our ever-changing world. The pitfalls of the covid-19 pandemic, impending climate catastrophe and widespread economic strife make collaboration more important than ever.
The expected outcomes of the agreement include greater regional economic integration and a greater contribution of African countries to world trade. The AfCFTA will cover a population of 1.3 billion people and an annual economic output of $3.4 trillion. Fully implemented, it is estimated that the agreement could boost the region’s revenues by $450 billion a year and provide new opportunities, including in agriculture, manufacturing and e-commerce.
However, it is not just industries such as transportation and manufacturing that will benefit. A pillar of Africa’s economy, as well as the lifeblood of its identity, resides in unique and diverse cultural sectors. With the launch of the AfCFTA, the cultural economy is a sector that should receive particular attention given its potential to add value to the economic growth and development of African countries.
How important is Africa’s cultural economy?
The cultural economy includes fashion, arts and crafts, film, visual and performing arts, culinary arts, sports and tourism. If the AfCFTA is properly implemented, these sectors can benefit from the stated objectives of the AfCFTA, particularly with regard to enhancing the competitiveness of different industries, and policy changes that enable innovation and entrepreneurship. .
One of the main objectives of the AfCFTA is to improve intra-African trade through the harmonization and facilitation of the movement of people, goods and services. Historically, intra-African trade has been low, with most directed to other regions of the world. Intra-African trade represents only 15%against 67% for Europe and 61% for Asia according to the United Nations Conference on Trade and Development (UNCTAD). The AfCFTA comes at just the right time, offering many opportunities to change that trajectory.
The cultural economy can support greater intra-African trade and wider regional integration through more Africa-focused cultural exchanges, programs and products. While the pandemic has posed challenges for the AfCFTA to take off, the mutual benefits for the trade deal and the cultural economy are clear. Successful implementation would allow African countries to further project a positive image of the region at home and abroad.
For example, the fashion industry in Africa has become $31 billion in value during the last years. With tariffs expected to fall and barriers expected to reduce trade costs, Kenya’s largest textile mill is positioning itself to take advantage of strengthen its production capacity and create new jobs.
By applying rules of origin, the trade deal aims to boost more locally made products, including textiles. A successfully implemented trade deal, complemented by other fashion investments, could benefit the African textile industry, generating $15.5 billion over the next few years.
A more competitive fashion industry, bolstered by the AfCFTA, infrastructure investments, regulatory reforms and zero tariffs for African products, could not only strengthen intra-African trade but also potentially increase Africa’s share of the global fashion industry in the longer term.
African tourism and African passport
In recent years, alongside the general push for the AfCFTA, efforts in the tourism sector have focused on African countries liberalizing their visa requirements, which has allowed more countries to allow visa-free access to African travellers.
A long-awaited, but not yet realised, single passport for Africans could potentially facilitate travel to all African countries, in line with the African Union’s Agenda 2063 and the AfCFTA. The trade deal is expected to benefit the travel sector by boosting local travel by Africans for business and tourism purposes.
Digitization in Africa
The AfCFTA has incentives for digital technology and innovation that could prove beneficial to the cultural economy. For example, for e-commerce, the trade agreement may promote the growth of advertising and the sale of goods in online marketplaces. Local digital platforms for online transactions should benefit from these developments.
Benefits to the cultural economy could also include increased trade in products such as arts, crafts and services, for example the streaming of locally produced films from Nollywood through digital technology platforms.
The AfCFTA could further accelerate the increase in mobile traffic and data consumption, especially online video content for entertainment, due to cost reductions that could lead to wider access. This would support the pre-pandemic projection that the value of mobile data consumed in Africa would reach $27 billion in 2021 (pdf).
AfCFTA-inspired standardized intellectual property protocols to protect traditional knowledge and cultural expression will provide incentives to foster innovation and entrepreneurship in the cultural economy of African countries.
A wide range of innovative products and services can benefit from the AfCFTA, from digital to cultural textiles to agricultural products. African countries can push for policies at the national level and through multinational bodies to protect cultural products from the region, such as staple teff from Ethiopia and fonio from East African countries. West. For example, we can emulate the efforts of the Colombian Coffee Federation to Mark and register Colombian coffee.
Rethinking Africa’s cultural economy
African countries need to rethink how the cultural economy can project the region’s soft power. The private sector and governments in the African region can play an important role in advocating for and providing financial support for cultural programming across Africa, inspired by the AfCFTA’s goal of greater regional integration.
These activities would serve to engage the public and further reinforce the concept of Pan-African identity. As the AfCFTA becomes a reality, additional challenges will be faced, such as overlapping geopolitical interests that may not align with the AfCFTA. But with the right support from leaders in business, politics and culture, the AfCFTA has the potential to increase the impact of the cultural economy.