AfCFTA plays key role in solving transport inefficiencies

Traffic congestion at Beitbridge, a border crossing on the Limpopo River, located just south of Beitbridge in Zimbabwe. File photo

Traffic congestion at Beitbridge, a border crossing on the Limpopo River, located just south of Beitbridge in Zimbabwe. File photo

Published May 26, 2023


The African Continental Free Trade Area (AfCFTA) is vital to solving transport inefficiencies in the continent, delegates at a webinar hosted by the Institute of Marketing Management (IMM) Graduate School of Marketing’s Research Hub on Africa Day heard yesterday.

The webinar examined the opportunities for business arising from the AfCFTA and South Africa’s hosting of the 15th BRICS Summit in August.

For South African businesses to fully take advantage of the opportunities provided by, being part of BRICS and, several infrastructure challenges had to be overcome, Elvin Harris, the chairperson of the Chartered Institute of Logistics and Transport (South Africa) said yesterday.

Harris said in many cases it was cheaper and easier for African businesses to trade with Asian and European businesses than with African businesses.

A study by the South African Development Community (SADC) secretariat estimated that transport inefficiencies cost African economies $170 billion (R3.3 trillion) annually.

The study said the lack of harmonisation of standards and regulations was hampering efficient transport flows, which is why the AfCTA was implemented to boost inter-Africa trade.

Industrial Development Corporation Robert Higgs said engagement between African and BRICS militaries could boost cooperation as these militaries had a similar mindset and were pragmatic rather than constrained by ideology.

“Defence diplomacy should be viewed as part of the solution. To give a practical example, I was part of the team that went with the South African frigate SAS Spioenkop to China in 2008. This was the first time an African naval ship had been to China and helped to change Chinese perceptions of Africa. It may also have helped to spur the BRIC into admitting South Africa to the BRICS,” Higgs said.

Busi Mabuza, the chair of the BRICS Business Council, said economic relationships should not be weaponised, but rather be an avenue for dialogue and engagement.

In that respect the BRICS New Development Bank could provide funding to address the constraints of electricity generation and transmission.

Helen McIntee, the president of the African Marketing Confederation, said as we celebrated Africa Day (May 25) one should rejoice in the diversity that Africa offered.

“Culture is the new currency, and it is up to us marketers to ensure that the message of African unity gets through. In Nigeria for instance, a recent survey showed that 60% of businesses there did not know about the African Free Trade Area,” she said.

Dr Petrus de Kock from IMM, said the movement of the world from fossil fuels to renewables provided an opportunity for African businesses as many of the minerals needed for a green economy, such as cobalt, copper and lithium, were located in African countries.

The importance of the BRICS engagement with Africa was underlined by South Africa making “Unlocking opportunities through the African Continental Free Trade Area” as one of the five key initiatives to be discussed at the BRICS Summit. To help with achieving this priority, the Gauteng provincial government hosted a briefing on the Inter Africa Trade Fair that will be held in Cairo, Egypt in November 2023.

Helmo Preuss is an economist at Forecaster Ecosa.