With the African Continental Free Trade Area (ACTFA) coming into force, Singaporean companies hope to invest more in Africa’s manufacturing industry, according to Linn Neo, the Regional Director – East Africa Enterprise Singapore.
Neo made the remarks during a press briefing that her office Organised ahead of the biennial Africa Singapore Business Forum (ASBF), a platform for business exchange and fostering trade between Africa and Asia scheduled for August 23 to 24.
“We do see a lot of potential. I think with the Africa continental free trade agreement coming into force,” she said.
“This presents an entire continent to Singaporean manufacturers. We are not new to doing manufacturing from the ground. We do have a number of investors who have been doing manufacturing in Tanzania, Uganda, Nigeria, Ghana, and we think that with the ACFTA coming into force, this will assist our companies and encourage even more manufacturers from Singapore to do manufacturing from Africa,” she added.
Trading under the ACFTA agreement commenced on January 1 this year, and it is expected to create growth opportunities for Rwandan and African producers and exporters in general, especially in untapped markets.
The ACFTA is the largest in the world in terms of the number of participating countries since the formation of the World Trade Organization.
The agreement requires members to remove tariffs from 90% of goods, allowing free access to commodities, goods, and services across the continent.
The United Nations Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52 percent by 2022.
For Rwanda’s case, the ACFTA mechanism is expected to drive Rwanda’s exports to the African continent from the current $1.6B annually to about $5B in 10 years.
According to the Ministry of Trade and Industry, among the markets that will bring fortunes to local exporters and traders including neighbouring DR Congo which is one of the leading markets for Rwandan produce.
Other markets that Rwanda is eying include the Economic Community of West African States namely Nigeria, Ghana and Senegal and Economic Community of Central African States (ECCAS) including Gabon, Congo Brazzaville and Angola.
The CFTA will also see Rwanda easily import raw materials for industries such as textile for value addition and exports which could see Rwanda reduce the import bill.
Singapore has been a long-time development partner in Africa, for instance, the Asian country’s development models have been used to influence manufacturing, sustainable infrastructure, innovations, and technology across the continent.