The African Continental Free Trade Area (AfCFTA) agreement, ratified in 2021, is a landmark milestone for the African continent. The past two-and-a-half years have underlined the need for cohesive, interconnectivity, and unity in our ever-changing world. The pitfalls of the covid-19 pandemic, the looming climate catastrophe, and general economic strife, make collaboration more important now than ever.
Expected outcomes of the agreement include greater regional economic integration and a more significant contribution by African countries to global trade. AfCFTA will cover a population of 1.3 billion people and an annual $3.4 trillion annual economic output. Fully implemented, it is estimated the agreement could boost the region’s income by $450 billion annually, and provide new opportunities including agriculture, manufacturing, and e-commerce.
It is not only industries such as transport and manufacturing, though, that will stand to benefit. A pillar of Africa’s economy, as well as its identity lifeblood, lies in the unique and varied cultural sectors. With the launch of AfCFTA, the cultural economy is one sector that should be a significant focus given its potential to provide additional 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, cinema, visual, and performing arts, culinary arts, sports, and tourism. If AfCFTA is properly implemented, these sectors can benefit from the stated goals of AfCFTA, particularly around boosting the competitiveness of different industries, and policy changes that enable innovation and entrepreneurship.
Among the top objectives of AfCFTA is to improve intra-African trade through harmonization and easing the movement of people, goods, and services. Historically, intra-African trade has been low, with most trade-oriented towards other regions of the world. Intra-African trade stands at just 15%, compared to 67% for Europe and 61% for Asia according to the United Nations Conference on Trade and Development (Unctad.) AfCFTA has come at a timely period, with much opportunity to change this trajectory.
The cultural economy can support greater intra-African trade and broader regional integration through more Africa-driven cultural exchanges, programs, and products. While the pandemic posed challenges to the takeoff of AfCFTA, the mutual benefits for the trade agreement and the cultural economy are clear. Successful implementation would allow African countries to further project a positive brand of the region at home and abroad.
As an example, Africa’s fashion industry has grown to $31 billion in value in recent years. With the expected reduction of tariffs and barriers expected to reduce the costs of trade, Kenya’s largest textile factory is positioning itself to take advantage by boosting its manufacturing capacity and creating new jobs.
By enforcing rules of origin, the trade agreement seeks to spur more locally manufactured products, including textiles. A successfully implemented trade agreement complemented with other investments in fashion could benefit Africa’s textile industry, generating $15.5 billion over the next several years.
A more competitive fashion industry, strengthened by AfCFTA, investments in infrastructure, regulatory reforms, and zero tariffs for African products, could not only strengthen intra-African trade but also potentially lift Africa’s share of the global fashion industry in the longer term.
African tourism and the African passport
In recent years, in tandem with the overall push for AfCFTA, efforts in the tourism sector have focused on African countries liberalizing their visa requirements, resulting in more countries permitting visa-free access to African travelers.
A highly anticipated, but as of yet, unrealized, single passport for Africans could potentially ease travel to all African nations in line with the Africa Union Agenda 2063 and AfCFTA. The trade agreement is expected to benefit the travel sector by boosting local travel by Africans for both business and tourism purposes.
Digitization in Africa
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 foster the growth of advertising and the sale of goods through online marketplaces. Local digital platforms for online transactions stand to benefit from these developments.
Benefits for the cultural economy could also include increased trade in products such as arts and crafts and services, for example streaming locally produced movies from Nollywood through digital technology platforms.
AfCFTA could further enhance the surge in mobile traffic and data consumption, particularly online video content for entertainment, due to reductions in cost 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).
Standardized intellectual property protocols inspired by AfCFTA to protect traditional knowledge and cultural expression, will provide incentives to foster innovation and entrepreneurship in the cultural economy across African countries.
An extensive range of innovative products and services may benefit from 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 culturally produced goods from the region, such as the staple teff from Ethiopia and fonio from west African countries. For example, inspiration can be drawn from emulating the efforts of the Colombian Coffee Federation to brand 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 across the African region can play an important role in championing and providing financial support for Africa-wide cultural programming, inspired by AfCFTA’s goal of greater regional integration.
These activities would serve to engage the public, and further build on the concept of pan-African identity. As AfCFTA becomes a reality, there are additional challenges that will be faced, such as overlapping geopolitical interests that may not align with AfCFTA. But with the right support from leaders across the business, policy, and cultural sector, AfCFTA has the potential to elevate the impact of the cultural economy.