International Trade Centre (ITC) has said technology will be highly essential in the full implementation of the African Continental Free Trade Area (AfCFTA) initiative. It, therefore, urged governments in the region to see it as a priority.
ITC, which said AfCFTA was expected to increase the size of Africa’s economy to $29 trillion by 2050, noted that the digital sector is a great driver of intra-African trade. It noted that services such as digital trading platforms and cross-border digital payment services were vital to make the AfCFTA a practical success.
AfCFTA, according to ITC, is expected to increase the earnings of nearly 68 million people, who make less than $5.50 a day and lift 30 million Africans out of extreme poverty; increase Africa’s GDP by $450 billion by 2035 while raising global GDP by $76 billion; increase African exports by $560 billion; increase wages for both skilled (9.9 per cent) and unskilled (10.5 per cent) workers and stronger trade facilitation would account for $292 billion of the $450 billion in economic gains expected from it.
The body, in its ‘African Market Trends in Technology Services’ document, which profiled 11 countries, including Nigeria, said digitisation and the use of technology are essential to implementing and driving the AfCFTA effectively.
However, it noted that the continent lagged behind other regions in adopting and using digital technologies, saying: “For example, just 40 per cent of Africans use the Internet. That compares with Internet penetration of 64 per cent in the Asia-Pacific region, 83 per cent in the Americas and 89 per cent in Europe.”
ITC observed that the relatively low Internet penetration in Africa was primarily due to the high cost of the service, limited reach in rural areas, connectivity disruptions and a lack of digital skills and literacy.
It noted that the challenges in the nature and extent of infrastructure on the continent were, to some degree, being addressed through extensive training and digital connectivity initiatives.
“However, the good news is that the uptake of Internet and digital tools is rising rapidly, which supports the realization of AfCFTA goals. Full implementation of the agreement can transform regional markets and economies and enhance service, manufacturing and natural resource productivity.
“There are several cases of how digital technologies act as a mechanism to implement AfCFTA successfully, such as through the AfCFTA Hub and the Pan-African Payment and Settlement System (PAPSS). Adoption, knowledge and use of these platforms can help IT and business process outsourcing (BPO) companies become better able to trade digitally on the African continent.”
