Biennial Lecture and Dialogue of the Brown Capital Management Africa Forum

OVERVIEW

On December 14, 2021, the Wilson Center Africa Program hosted the inaugural Biennial Lecture and Dialogue of the Brown Capital Management Africa Forum featuring His Excellency Wamkele Mene, Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat as the keynote speaker.

Ambassador Mark Green, President, Director, and CEO of the Wilson Center provided welcome and opening remarks, highlighting the importance of the AfCFTA for U.S.-Africa economic relations and Africa’s development and recognizing the many years of planning and work that came before the January 2021 commencement of trade under the agreement. He spoke to the agreement’s potential to make Africa the largest free trade area in the world, better facilitating the movement of people, goods, capital, encouraging and enabling entrepreneurship, connecting vibrant communities with global markets, and promoting African trade and innovation on the global stage—particularly in high-value sectors. Ambassador Green stressed that the AfCFTA’s articulation with existing U.S. programs such as Prosper Africa and the African Growth and Opportunity Act (AGOA) will be crucial in shaping the future of U.S.-African trade and development, in both the public and private sector arenas.

Mr.Eddie C. Brown, Brown Capital Management Founder, Chairman, and CEO, then offered introductory remarks, reiterating the role of the Brown Capital Management Forum as a platform for substantive, policy-oriented dialogue on key issues surrounding U.S.-Africa trade, investment, and sustainable development. He emphasized that Africa does not receive the level of attention it deserves, and that the attention it does receive is often focused on its challenges instead of its opportunities. He stressed that Brown Capital Management, through its partnership with the Wilson Center, is committed to shining a spotlight on Africa’s development—particularly on the opportunities for mutually beneficial U.S.-Africa economic relations. The AfCFTA presents such an opportunity, Mr. Brown concluded, hence its choice as the topic for the inaugural Biennial Lecture and Dialogue on Africa of the Brown Capital Management Africa Forum.

Dr. Monde Muyangwa, Africa Program Director, then introduced the keynote speaker and moderated the event.

Secretary-General Mene’s lecture focused on the significance and current state of play of the AfCFTA’s implementation, key challenges facing the AfCFTA, and key opportunities presented by the agreement, including for the way forward on U.S.-African economic engagement and growth.

The Secretary-General began his address by highlighting damaging effects of entrenched misperceptions and negative attitudes about Africa, including on Africa’s trading potential and COVID-19 recovery, and emphasizing that these negative attitudes are disconnected from an Africa that has been a place of tremendous economic growth and development. The Secretary-General expressed that recent international travel bans on African countries appear to punish countries like South Africa and Botswana, who should instead be congratulated for their role in uncovering the Omicron variant, which he noted had been circulating in several Western countries before the two southern African countries brought it to the world’s attention. He stressed that such bans have a disproportionate, negative impact on Africa’s economic recovery and engagement with the global community—including on its ability to import life-saving medical resources for the fight against COVID-19, and he emphasized the need for global solidarity in combatting the pandemic.

Secretary-General Mene then offered a critique of why Africa continues to perform on the margins of global trade and development. He questioned why, after almost 60 years of independence, Africa has not been as competitive or developed as other regions in the international trade arena despite enormous natural resource wealth. He noted that this was mainly because African countries had sustained, instead of transforming, the colonial economic models focused on exporting a narrow range of primary commodities and importing manufactured goods, thus tying the continent’s economic success to the volatility of global primary commodity markets and preventing its economic integration and successful development. Having provided this backdrop, Secretary-General Mene pivoted to an overview of the current state of play of AfCFTA.

The Current State of Play of the AfCFTA:

Secretary-General Mene situated the AfCFTA within the larger umbrella of the African Union’s “Agenda 2063: The Africa We Want,” a blueprint for African transformation and development of which the AfCFTA is a Flagship Program. While acknowledging the difficulty in implementing a free trade agreement among 55 member countries of the African Union, Secretary-General Mene pointed out that the fact that 39 countries have ratified the agreement points to the widespread political will of African leaders for African economic integration and liberalization, and he signaled his confidence that the rest of the remaining countries would ratify in due time. The Secretary-General also highlighted that the AfCFTA is the fastest instrument to be ratified under the African Union since the union’s establishment.

Secretary-General Mene spoke to the extensive work that the AfCFTA had taken in the first phase of implementation, highlighting a few key areas of progress. He noted that the AfCFTA had concluded the protocols on trade in goods and trade in services, and operationalized a fully functional, forward-looking dispute settlement body that has been informed by lessons learned from the successes and failures of other trade dispute settlement mechanisms around the world—a crucial structure in signaling that the African continent is open for business and investment. In addition, the AfCFTA has completed 87% of negotiations on rules of origin, covering a range of productive sectors; identified five areas for immediate liberalization: financial, tourism, transport, communication, and business services; and established a timeline for publishing a clear and transparent AfCFTA tariff book that will be made easily accessible to investors and stakeholders in 2022.

With regard to next steps, the Secretary-General shared that the second phase of implementation would include protocols on the following areas: intellectual property rights, investment protection, competition policy, digital trade, and women and youth in trade.

He then elaborated on one issue related to intellectual property rights which had been brought to the fore by the COVID-19 pandemic: Africa’s large imports of pharmaceutical products and comparatively low manufacturing capacity for pharmaceuticals. He argued for the deployment of an intellectual property rights regime that captures Africa’s desired reforms, and provides and encourages investors while also serving Africa’s public health and industrial development imperatives.

Challenges Facing the AfCFTA:

Before discussing key challenges, Secretary-General Mene recalled that it took Europe 72 years to reach the depth of economic integration that we see today. He then acknowledged a few specific difficulties to full implementation of the AfCFTA, including the stark differences in economic development between African countries in terms of GDP, industrial base, and export capacity; the fact that Africa has 42 different currencies in use and the associated high cost of convertibility; and the infrastructure deficits that remain, even with the investments that many African countries have made in this area in recent years. 

The Secretary-General discussed the potential solutions in the works for these barriers, including a partnership between the AfCFTA and African Export-Import Bank (Afreximbank) to establish an AfCFTA adjustment fund to address economic disparities; the development of the Pan-African Payments and Settlement System (PAPSS) to improve ease of doing business and enhance the competitiveness of small and medium enterprises; and increased investment in hard infrastructure to support trade.

Opportunities under the AfCFTA and the Way Forward:

Finally, he emphasized the opportunities presented by the AfCFTA not only for potential investors, but also for ordinary Africans. He stressed that the AfCFTA will be one of Africa’s most important economic recovery tools in the post-COVID-19 context, with the potential to significantly increase Africa’s GDP, accelerate wage growth (particularly for women), and lift 30 million Africans out of extreme poverty. Secretary-General Mene specifically noted that the AfCFTA would enhance the ease of doing business, simplify customs procedures, reduce non-tariff barriers to trade, lower compliance costs for investors, and facilitate African businesses’ integration into global supply chains. Looking ahead to the future, Secretary-General Mene emphasized the AfCFTA’s long-term objectives of accelerating African industrial development, creating jobs for African youth, and better positioning the continent for global economic competitiveness. He invited U.S. investors and businesses who have not yet invested in the African marketplace to do so, and encouraged those already engaged to expand their investment through the market access opportunities offered by the AfCFTA. He noted that the AfCFTA, along with the Mastercard Foundation, has already developed a private sector engagement strategy, and that with the help of McKinsey & Company, has also identified the following high-priority value chains: pharmaceuticals, automotives, agro-processing, and financial technology.

Secretary-General Mene concluded by stressing that the cost of not rapidly implementing the AfCFTA is simply too high, emphasizing that Africa cannot remain on the margins of the global economic arena and offering the AfCFTA as Africa’s best chance for economic development and integration.

Secretary-General Mene’s lecture was followed by a question-and-answer dialogue with more than 110 participants who attended the event in-person and virtually. During this segment, participants engaged with the Secretary-General on the ways the United States can support the AfCFTA; the crucial role of small and medium businesses for African economic growth; the importance of mutual respect in U.S.-Africa relations; the logistics of reducing non-tariff barriers; and the need to better integrate women and youth into the broader African economy.

The event was followed by a private reception during which Secretary-General Mene, Ambassador Hilda Suka-Mafudze, and Ms. Alyson Grunder, Senior Diplomatic Fellow for Wilson Center Africa Program, offered welcome and opening remarks.

The topic of this event is of great significance to Africa and to U.S.-Africa relations, as was reflected in the high-level participants in attendance, including Ambassador Hilda Suka-Mafudze, African Union Ambassador to the United States, Ms. Dana Banks, Deputy Assistant to the President and Senior Director for Africa in the National Security Council, Mr. Clay Hamilton, Associate Administrator for the Foreign Agricultural Service at the United States Department of Agriculture, Ms. Diana Putman, Senior Deputy Assistant Administrator for the Bureau for Africa at USAID, Ms. Julie Cerqueira, Principal Deputy Assistant Secretary for the Office of International Affairs at the United States Department of Energy, Ms. Akunna Cook, Deputy Assistant Secretary for the Bureau of African Affairs at the United States Department of State, and several private sector attendees including Mr. Keith Lee, President and Chief Investment Officer of Brown Capital Management. In all, there were 21 representatives from the African Union, U.S. Government agencies, and the private sector who attended the event in person, and at least 91 members of the public tuned in to watch the live lecture webcast.

His Excellency Wamkele Mene was elected by the 33rd Ordinary Session of the Assembly of Heads of States & Government of the African Union, to the position of Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat. Prior to being elected Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat, he served as Chief Director: Africa Economic Relations, at the Department of Trade & Industry of South Africa. In this role, he was South Africa’s chief trade negotiator in the AfCFTA and Tripartite FTA negotiations. During his tenure as chief negotiator, South Africa ratified both the AfCFTA and Tripartite FTAs agreements, providing new export markets in fast growing and dynamic markets in East and West Africa. Prior to assuming this position, Wamkele was Director: International Trade Law & Investment Law at the Department of Trade & Industry, a role in which he was principal legal counsel on international trade law and international investment law. From 2010 until 2015, Wamkele represented South Africa at the World Trade Organization (WTO) in Geneva, Switzerland. During his posting to the WTO, Wamkele was elected by over 130 governments to the position of Chairman of the Committee on International Trade in Financial Services, a committee comprising trade negotiators, financial regulators and financial policy makers from over 160 countries. Prior to joining the government, Wamkele worked for the law firms Simpson Thacher & Bartlett LLP in London and Milbank, Tweed, Hadley & McCloy LLP in Hong Kong. Wamkele has written and lectured internationally on international trade law, international investment law and international business law. He holds a Bachelor of Arts (Law) degree from Rhodes University in South Africa, a Master of Arts in International Studies & Diplomacy (with specialization in International Economics) from the School of Oriental & African Studies (SOAS), University of London and a LL.M. (Master of Laws) in Banking Law & Financial Regulation from the Law Department of the London School of Economics & Political Science (LSE).