Diplomatist Magazine Africa Day Special 2018 | Page 29

ANNIVERSARY SPECIAL
This should go hand in hand with promoting
the disciplines of science, technology, engi-
neering, entrepreneurship and mathematics,
as well as vocational and on-the-job training.
Policymakers should also favour the
migration of highly skilled workers across
the continent.
Cost: Policymakers must bring down
the cost of doing business. The barriers to
the same include energy, access to roads
and ports, security, fi nancing, bureaucratic
restrictions, corruption, dispute settlement
and property rights.
Supply network: Industries are more
likely to evolve if competitive networks exist.
Policymakers should ease trade restrictions
and integrate regional trade networks. In
particular, barriers for small and medium-size
businesses should be lifted.
Domestic demand: Policymakers should
offer tax incentives to fi rms to unlock job
creation, and to increase individual and
household incomes. Higher purchasing power
for households will increase the size of the
domestic market.
Resources: Manufacturing requires heavy
investment. This should be driven by the
private sector. Policymakers should facilitate
access to fi nance, especially for small and
medium enterprises. Further, to attract foreign
direct investments, policymakers should ad-
dress the region's poor risk perception. This,
invariably, scares off potential investors or
sets excessive returns expectations.
Increased productivity
The continental free trade area facilitates
industrialisation by creating a continental
market, unlocking manufacturing potential
and bolstering an international bloc with
negotiating power.
Finally, the continental free trade area
will also provide African leaders with greater
negotiating power to eliminate barriers to ex-
porting. This will help prevent the establish-
ment of agreements with other countries and
trading blocs that are likely to hurt exports
and industrial development. 
The goal of FTA
is to create a
single continental
market for goods
and services, with
free movement of
business persons
and investments.
* The author is a distinguished Fellow
at Stanford University's Center for African
Studies, a David M. Rubenstein Fellow at
the Global Economy and Development and
Africa Growth Initiative at the Brookings
Institution, and a Young Global Leader of
the World Economic Forum, Stanford Uni-
versity. This article was fi rst published by
The Conversation.
2018 • Africa Day Special • 25