Boosting Africa’s economy through Special Economic Zones

The Regional Conference on Special Economic Zones is currently underway in Djibouti City, where the Republic of Djibouti is collaborating with the AfCFTA Secretariat to highlight Djibouti's strategic position as an African logistics hub on the Red Sea. To gain further insights into the conference and the initiatives of the African Continental Free Trade Area Secretariat, CNBC Africa's Editor Godfrey Mutizwa engaged in an enlightening discussion with Wamkele Mene, Secretary General of the AfCFTA Secretariat. The conversation delved into crucial issues surrounding boosting Africa's economy through the development of Special Economic Zones and the significant implications of President Donald Trump's tariffs on the continent's trade dynamics. Mene articulated the importance of expanding markets beyond national and regional boundaries to leverage the vast opportunities presented by the 1.4 billion strong African population. Drawing on examples from countries like Benin and Gabon, he emphasized the need for a coordinated strategy aligned with the AfCFTA to enhance competitiveness and drive sustainable growth. However, looming challenges arise from the disruptive impact of Trump's protectionist policies, particularly on countries reliant on exports to the U.S. market under programs like AGOA. With the impending closure of preferential trade agreements, nations like South Africa, Madagascar, and Kenya face immediate setbacks in their export competitiveness, necessitating a shift towards diversification and alternative markets. Despite short-term disruptions, Mene highlighted the potential for long-term benefits through strategic repositioning and the cultivation of sustainable export portfolios. Furthermore, the current global trade landscape underscores the urgency for Africa to strengthen its domestic market and reduce dependence on external trade partners. The ACFTA emerges as a crucial framework to bolster intracontinental trade and foster economic resilience amid evolving geopolitical dynamics. Political will among African leaders for collective action and market integration is gaining momentum, signaling a shared recognition of the imperative for unified efforts in navigating the complexities of modern trade agreements. However, Mene cautioned against rigid tariff reduction timelines established in preexisting agreements, advocating for a more adaptive liberalization approach tailored to current market realities. Notably, he emphasized the untapped potential of domestic agricultural production to meet regional demands, urging a shift towards self-sufficiency and reduced reliance on imported goods. Amidst the uncertainties surrounding the future of U.S.-Africa trade relations, Mene speculated on a reconfigured landscape characterized by bilateral engagements and recalibrated trade dynamics. While acknowledging the unilateral nature of past trade preferences like AGOA, he called for a reevaluation of Africa's strategic interests in pursuit of mutually beneficial trade partnerships. As Africa navigates the intricate maze of global trade challenges, the spotlight remains on fostering innovation, sustainability, and inclusivity within the continent's economic ecosystem.