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Africa hopeful free trade area will block second-hand imports

Monday December 13 2021
African Continental Free Trade Area

President Uhuru Kenyatta signs agreements on the African Continental Free Trade Area (AfCFTA) in 2018.AfCFTA aims to create the largest free trade area in the world measured by the number of countries participating, bringing 1.4 billion people across with a combined gross domestic product (GDP) valued at S$3.4 trillion into one pot. PHOTO | FILE | NMG

By Charles Onyango-Obbo

Behind our hotel along Independence Avenue in the Ghanaian capital Accra, runs Liberia Road.

Towards the end of Liberia Road stands the assertive Africa Trade House, the headquarters of the African Continental Free Area (AfCFTA) that was commissioned in August last year.

Nestled in the Africa Trade House, is also the African Export Import Bank (Afrexim), the Cairo-headquartered pan-African lender that provides loans for trade and other project related finance. More than any other continental institution, Afriexim Bank has poured massive sums into personal protective equipment (PPE) and Covid-19 vaccines.

Opposite the Africa Trade House, a little worse for wear, is Cedi House, a 14-storey building that houses the Bank of Ghana and the Ghana Stock Exchange. Next to Cedi House is another of new age complexes, home to South African giant First National Bank (FNB) and other financial institutions. Then, directly across the road from FNB, is the well-appointed National Theatre.

It is the perfect setting to beg the question; if you had to take a play across the road to the stage at the National Theatre about the dream of a pan-African market and the possibilities for the money people to make a fortune, what story would you tell?

AfCFTA aims to create the largest free trade area in the world measured by the number of countries participating, bringing 1.4 billion people across with a combined gross domestic product (GDP) valued at S$3.4 trillion into one pot.

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The story one could bring to the National Theatre might draw from scenes at the flank of Africa Trade House at the edge of Independence Avenue.

It’s an oddity, but there in this upmarket part of the city, is a thriving street second-hand clothes (mitumba) market. The mitumba would star in the play with the second-hand cars, that other fixture of the modern African consumer economy, that always seem to be stuck in the traffic jam next to the street market.

In 2019 Ghana was among the top importers of second-hand clothes in the world, and the leaders in sub-Saharan Africa, chalking up mitumba worth $168 million, with Kenya a close second, putting down $165 million. Mitumba is a complicated business. That year the otherwise fabulously cash-rich United Arab Emirates spent $151 million. This tells you that the rich buy a lot of mitumba for re-export. For $168 million, Ghana likely resell some of it around West Africa.

Exact figures are elusive, but annually Africa imports over $1 billion of mitumba. We have a better handle on the figures for second-hand cars. Speaking at the Intra-Africa Trade Fair in Durban, late November, South Africa’s minister of Trade Industry and Competition Ebrahim Patel referenced the figure of four million used cars imported into Africa annually.

He argued that between 20 and 25 new vehicle assembly plants could be established in Africa if it was able to convert those four million mitumba vehicles into new vehicle demand.

That would be even more economical if the common free market AfCFTA is hoped to deliver worked. The chaps at Afriexim might just put some money into the quest. It might not become reality tomorrow, but would make for a hopeful stage play.

Charles Onyango-Obbo is a journalist, writer, and curator of the “Wall of Great Africans”. [email protected]

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