PRECIOUS MOLOI-MOTSEPE: More than just fashion — AfCFTA, Agoa and Africa’s future
Small businesses need support to contract into regional value chains
It is a great time to work in the African fashion and textile space.
Our mission has been to develop, aggregate and grow the fashion industry on the continent to global competitiveness by creating a pan-African platform to showcase African fashion and design; providing decent work in the fashion supply chain, especially for women; and helping bring more circularity and a smaller ecological footprint into a notoriously wasteful industry.
We now have a database of more than 240 African and pan-African designers we have promoted and collaborated with to promote their brands and contribute to their growth in sales, with designs showcased locally as well as in the United Arab Emirates (UAE), Botswana, Rwanda, Kenya, Brazil and the US.
African designers and creatives are finding their voice, and due to the demand for their products and more investment in this sector, the economic and job-creating potential is immense. We have the chance to make African designers and labels, producers and workers a global success story within this generation.
The reasons for my optimism are:
- Growing global interest in African identity and perspectives on key questions such as the relation between tradition and innovation and between the individual and the social, as these are represented in African creative work.
- Acceleration of digital technologies, which are transforming production, marketing and supply chains, enabling Africa’s designers to showcase globally and produce competitively at smaller scale.
- The once-in-a-generation potential inherent in the African Continental Free Trade Area (AfCFTA), particularly when combined with a new African Growth & Opportunity Act (Agoa) arrangement, which should further open up access to the US market for African exporters.
For too long intra-African trade has been stifled by high tariffs and non-tariff barriers, relegating the continent to exporting natural resources and primary commodities to global markets. This has limited the growth of African manufacturing and knowledge economies because domestic markets have been too small, and it has essentially represented a large income transfer to the rest of the world.
For example, if a fifth of current African imports were diverted from non-African to African exporters the additional income to African economies would be about $120bn a year — more than R2-trillion — and generate about 5-million more African jobs.
As we reduce tariffs and drive free, fair, mutually beneficial trade we not only promote local industrialisation and innovation and retain more income and jobs regionally, but build globally competitive sectors through partnership and co-operation between African countries trading freely with each other along the entire value chain.
This will also mean we can take greater advantage of Agoa, which offers African countries preferential tariffs on a wide list of goods, a list that is likely to increase further in the new agreement from 2024.
Harnessing the potential of Agoa and an AfCFTA will not happen automatically though, and a key dimension of ensuring success is supporting small businesses so they can contract into regional value chains and reap the rewards of trade liberalisation and access to US markets.
To do this we need to expand the scope of concessional public loans, focusing on areas such as the creative economy in which the arguments for higher growth are sound. We need to keep evaluating the regulatory burdens small business face, and keep what is essential but no more than that.
Public and private procurement can also more effectively target small businesses, and large organisations should incorporate mentoring and business incubation support as part of their procurement frameworks.
It is essential that we prioritise closing the digital divide and ensure Africans have digital skills and access to the digital economy, a game-changer in education, health and entrepreneurship.
We must continue to support women entrepreneurs, recognising that they face objective hurdles and often an internalised idea that they cannot make it as entrepreneurs.
Many investment opportunities will arise in Africa over the next decade, enabled by Agoa and AfCFTA and supported by digital technologies. They range from the strictly commercial to the social entrepreneurial; we need to make the arguments for Africa as an investment destination clearly and powerfully.
Perhaps the most important guiding idea is that of effective partnership. We cannot rely solely on the public sector or the private sector or the donor community or investment community or civil society to get to where we want to go. We need a workable, pragmatic sense of shared goals and direction.
I am sure we can do this and grasp this historical moment firmly.
• Dr Moloi-Motsepe is CEO of African Fashion International.
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