Compiled by Eamonn Ryan from the presentation transcript
At the 2024 GCCA Africa Cold Chain Conference held on August 23 in Cape Town, Donald MacKay, CEO of XA Global Trade Advisors, delivered a presentation on market expansion and trading opportunities facilitated by the African Free Trade Agreement (AfCFTA). This is Part 1 of a five-part article.
MacKay highlighted both the immense potential and the challenges that accompany this landmark agreement.
Kicking off his presentation, MacKay emphasised the crucial role of data in shaping trade strategies. He acknowledged that data collection in Africa poses significant challenges, but improvements are underway. “Data is a problem in Africa, but it’s one that’s being recognised,” he stated, underscoring the necessity of quality data for informed decision-making.
MacKay delved into the political landscape surrounding the AfCFTA, noting that while the agreement opens up a vast market for exporters, it also faces resistance. “Everyone wants to be an exporter, but no one wants to let products into their markets,” he explained. He pointed out that many African nations rely heavily on border taxes for revenue, which complicates the situation. In countries like Uganda, border taxes account for nearly a quarter of total revenue, making reductions in duties a politically sensitive issue.
To illustrate the potential of the African market, MacKay shared insights into the continent’s demographics. He revealed that by 2050, Africa will constitute 26% of the global population, growing to 38% by 2100. This demographic trend is vital for businesses, particularly those reliant on consumer demand.
The population pyramid he presented showcased Africa’s youthful demographic, with a median age of just 19 years, in stark contrast to countries like China, where the median age is 39. This youth bulge indicates a growing consumer base, which could drive demand for various products, including food, technology, and healthcare.
MacKay emphasised the need for Africa to attract investment from the aging populations of the world. He posed a critical challenge: “We must retain our best talent in Africa, or risk losing them to opportunities elsewhere.” He framed the issue as not just about local employment but about securing a future where young Africans can thrive without migrating abroad.
MacKay’s presentation was a call to action for stakeholders involved in the African market. While the AfCFTA presents significant opportunities, the interplay of data, politics, and demographics will be crucial in realising its potential. As Africa moves forward, it must cultivate an environment that supports trade, attracts investment, and nurtures its youthful population, ensuring that the continent can leverage its demographic dividend effectively.