Intra-African Trade Fair ambassador Abdelmoniem Mahmoud discusses the importance of leveraging the benefits of digitalisation to expand the continent’s intra- and extra-trade opportunities
Africa must capitalise on the array of digital technologies that are integrating all areas of organisations and their business processes, altering payment systems, optimising storage and the delivery of goods and services.
Technologies are transforming value chains, delivering skills development, introducing efficiencies and lowering production costs, assisting diversification into value-added products, changing the dynamics of commodity dependence, expanding trade and increasing export competitiveness. When implemented, the African Continental Free Trade Area (AfCFTA) will, in tandem with other favourable economic and demographic factors, turbo-charge intra-African trade, despite Africa facing many demanding challenges.
Technology is beneficially impacting manufacturing and productivity. Digital technologies are driving diversification, integration into production networks, movement into more sophisticated products and increasing Africa’s market access and participation in global value chains. Megh Industries, for example, in Kenya has invested in modern technologies and moved from the manufacturing of automotive equipment and parts to full transport seating, van conversions and lightweight modular bullet proofing, making it more sophisticated and value-added in nature. The use of market-related data for product design and development is helping firms to enter new sectors.
Parts of Africa’s agricultural sector embrace AgTech, but it needs wider take-up and further advancement. Africa has 60% of the world’s uncultivated arable land, yet it is still a net importer of food. Despite over 60% of sub-Saharan Africa’s population being smallholder farmers, only 23% of the region’s GDP comes from agriculture, reflecting the preponderance of subsistence level farming.
Digitalisation is delivering opportunities, but African countries face challenging obstacles, necessitating catch-up. Their level of digitalisation is lower compared to more developed countries and, where it exists, it is having a lesser impact on GDP per capita growth. Digital transformation is a general-purpose technology that continually evolves, branches out and increases productivity and efficiency, regardless of industry or sector. It will increase the capacity, range and delivery of trade, lower the cost-to-serve and hasten the speed-to-market while digitally connecting customers, wherever they are.
It accelerates diversification, revolutionises payments, expands market access and trade and investment opportunities. Digital technologies will be playing an increasing role in the expansion of trade, so we must ensure that Africa is at the forefront. To do this it is vital that Africa prioritises its transition towards a digital economy, as it is an enabler for the continent to expand intra- and extra-African trade and take advantage of the economies of scale proffered by the AfCFTA.
More than 10,000 buyers, sellers and conference delegates are expected to attend the second Intra-African Trade Fair in Kigali from 6-12 September 2021.
