The Communique of African Sub-Sovereign Governments Durban, KwaZulu-Natal, 18 November 2021
On the sidelines of the IATF2021 Trade and Investment Conference, the Kwazulu-Natal Government and the African Export -Import Bank (Afreximbank) co-hosted a conference of African Sub-Sovereign Governments on 18 November 2021 under the theme: “African Sub-Sovereign Governments Network as a Vehicle for Promoting Intra-African Trade and Investment” in Durban, Kwazulu-Natal, South Africa.
The Conference objectives were as follows:
· To understand the capacity of sub-sovereigns in conceptualising and implementing development programmes.
· To understand the role sub-sovereigns can play in implementing the AfCFTA.
· To agree on the need for setting up a sub-sovereigns network as well as the form it should take.
· To define membership i.e. who is a sub-sovereign for the purpose of membership.
· To define the objectives of the network.
· To agree on potential benefits of the network and implementation plan.
Intra-African trade and investment
The Conference noted concerns about the small size and slow growth of intra-African trade as well as the barriers that account for this limitation. Intra-African trade and investment still account for a fraction of the total African trade with the world despite decades of pursuing continental and regional economic integration.
The Conference welcomed the establishment of the African Continental Free Trade Area as a platform for promoting and enhancing intra-African trade and investment, seeing it as an opportunity for stakeholders like sub-sovereign governments to contribute to growing intra-African trade and investment. The Conference saw this as key to achieving the objectives of the AU’s Agenda 2063.
The Conference noted that promoting intra-African trade would enable Africa to reduce over-reliance on export of primary commodities and the risks of reliance on global value chains. It would also help increase economic integration and build the resilience of African economies against the vagaries of a global economy subject to fluctuations.
The Conference acknowledged that there would be great value added by local enterprises in local and regional economic development. Sub-sovereign economies have opportunities that can contribute towards trade across African regions.
The Conference recalled that with 16 African countries landlocked, there was currently no continental transit guarantee system to facilitate the movement of goods under a single transit bond. The only region that is implementing a regional transit bond scheme was the Common Market for Eastern and Southern Africa. As a result, the Conference recommended that there should be a transit mechanism supported by a single transit bond to facilitate the movement of goods across Regional Economic Communities as well as throughout the continent in support of the AfCFTA.
The Conference noted and appreciated the support that is provided by Afreximbank through various other products and initiatives to facilitate intra-African trade, which include financing, capacity building, export and investment promotion, linkages and partnerships, digital solutions, and policy advisory services. It was noted that this support is also available to the sub-sovereigns as well.
Sub-Sovereigns can also benefit from other initiatives that are being implemented by Afreximbank such as industrial parks and special economic zones to promote industrial development and export development.
African Sub-Sovereign Economies and Intra-African Trade and Investment
The Conference further recognised that African sub-sovereign authorities and economies have a critical role to play in expanding, growing, and deepening intra-African trade, thus contributing to the overall economic development and integration of the continent.
The Conference welcomed efforts to strengthen sub-sovereign governance across the continent as a sound basis for economic development including intra-African economic trade and investment.
The Conference however took note of the fact that there is no platform or mechanism dedicated to promoting dialogue, cooperation, and collaboration among sub-sovereign governments in respect of intra-African trade, investment, industrialisation and development.
The Conference thus resolved:
To establish the African Sub-Sovereign Governments Network as a vehicle for enhancing their role in expanding, growing, and deepening intra-African trade and investment.
The Network will help African Sub-Sovereign governments to participate effectively in the AfCFTA with a view towards promoting an integrated African economic market and achieving the objectives of the AU Agenda 2063.
The Network is a platform for sharing ideas, skills, knowledge, and peer learning for the benefit of intra-African trade and investment across sub-sovereign governments.
The Network to encourage the building of trade carrying/enabling infrastructure and capacities for intra-African economic integration.
To use the Network as a platform for exchanges on existing financing instruments in the form of financial products, programmes and initiatives for trade financing, facilitation, and technical assistance to sustain the initiatives.
To use the Network to enhance human, technical, financial, and institutional capacities to support the participation of sub-sovereign economies and authorities in intra-African trade and investment.
To utilise the Network to generate opportunities for enhancing intra-African trade and investment that stretches into the African diaspora that is designated as the sixth region of the African Union.
The Network will also promote industrial development in a manner that is sensitive to transitions towards green economies in a careful and just way by enhancing export development.
To use the Network to help enhance the role of export trading companies and other catalysts for cross-border trade.
To use the Network to help improve the participation and impact of sub-sovereign economies in the Intra-African Trade Fairs and such initiatives through information sharing and coordination.
The Network membership to include African sub-sovereign authorities duly recognised as such by the national constitutions of African countries.
The Network to hold annual meetings hosted by various members on a rotational basis through an open selection process, allowing potential hosts to express interest in hosting sub-sovereign conferences.
The Network to consider setting up an institutional framework to support the full operationalisation of the Network.
The Network welcomes the commitment by the Afreximbank to support the operationalisation of the Network.