Boosting food security through regional integration, trade and investment |25 May 2022

Africa, a vast continent, is often overlooked as a potential market for investment, tourism, and trade. This may be due to the low frequency of exposure to the continent by Seychellois. Even if the numerous logistical challenges to conducting business in Africa are well documented, there are still opportunities in the offer. The many opportunities that could be explored which can bring significant benefits to consumers include a cheaper supply of food and other consumables. 

Africa is becoming an increasingly attractive source and destination for investment. An estimated 600 million people will be working in Africa by 2040, overtaking both China and India, and the business environment is steadily improving, making Africa the next big economy. With extra money in their pockets, Africa's emerging middle class can be an important tourism market for Seychelles, as Africans are increasingly interested in travel and leisure, and a sizeable portion of the continent's middle-class population can afford it. The large expatriate market representing people working in Africa also presents a potential source for tourism. This includes a large workforce of people working for international organisations. 

Trade in the Comesa region 

Despite Africa's potential, some significant challenges remain. African countries are losing billions of dollars in potential trade every year because of a fragmented regional market, and cross-border production networks that have spurred economic dynamism in other regions, especially East Asia, have yet to materialise in Africa. Intra-regional trade among the 21 member countries of Comesa was estimated at 7% in 2020. This low performance is attributed to inadequate infrastructure, high tariffs and non-tariff barriers, and low levels of economic integration. This lack of economic integration has prevented African countries from reaping the benefits of increased trade and collaboration. Despite those challenges, Comesa countries have embarked on several initiatives to boost intra-regional trade, including developing an Integrated Regional Market, establishing a Free Trade Area, and adopting a Common External Tariff. 

The African Continental Free Trade Area (AfCFTA) 

The African Continental Free Trade Area (AfCFTA) has the potential to boost trade in Africa significantly. The AfCFTA is a free trade agreement that aims to promote trade and economic integration across the African continent. The agreement came into force in May 2019 and covers a market of 3 billion people with a combined GDP of $4 trillion. The AfCFTA is expected to boost trade in Africa by reducing tariffs and other trade barriers and creating a single market for goods and services. The agreement is also expected to promote investment and facilitate the movement of people and capital across the continent. The AfCFTA is likely to impact the economies of African countries positively. 

There is no doubt that Africa is a continent on the rise. With its growing wealth and its increasing pace of development. Africa must connect its markets – including the Indian Ocean, increase regional integration, and adopt reforms that increase competitiveness to transform its economic gains into sustainable growth. The African continent has many opportunities for trade, food sources, tourism, and cultural exchange for Seychellois, who are willing to look closer to home, and beyond Seychelles' traditional market and supply chains.  

Contributed by the Regional Affairs Division, Foreign Affairs Department  

References (World Bank, Comesa)