There are a number of businesses, particularly small and mid-size enterprises (SMEs) in Ghana which do not consider the impact their capital structure has on their financial performance, market value and shareholders’ wealth. Most often, SMEs in Ghana mainly focus on getting capital to fund their projects or activities without really thinking through the impact (positive or negative) the mechanism used to raise that capital has on their business, therefore causing them future problems.
Made up of debt and equity, capital structure is the utmost business decision that determines the overall cost of capital and, eventually, the market value of a company. In my view, there are three types of capital structures: thus, all debt no equity; all equity no debt; and a proportion of debt and equity. Having to juggle between long-term and short-term interests of a company in terms of ability to retain earnings; satisfy shareholders; maximise value and improve the company’s credit-worthiness shows the gargantuan effect capital structure has on a company’s financial performance and shareholders’ wealth.
In an ideal market, it is imperative for companies to be levered – that is, combine both debt and equity. Deciding whether to be levered or unlevered is a decision that is vital for business managers to make, as both debt and equity have their advantages and disadvantages. For instance, debt financing allows owners to retain ownership and control of their business.
It also helps to reduce tax obligation because interest payments are tax deductible expenses in most jurisdictions. But debt has repayment obligations which might negatively affect a company’s credit rating when it defaults with debt repayment. Equity financing on the other hand will most likely lead to less control for business owners. Also, there is a strong notion that equity financing is comparatively costly to debt financing in the long-term.
The quest to determine the best capital structure in order to increase firm value lies within several factors: including size of company, profitability, risk, liquidity, market size, cost of research and development, real assets and others. This affirms that not getting its capital structure right might be detrimental to a company’s future.
Over the years, various approaches – such as The Net Income Approach, Net Operating Income Approach, Traditional Approach, Modigliani & Miller Approach, Pecking Order Theory, Trade-off Theory and Agency Cost – have been developed to throw more light on the various dynamics of capital structure. For instance, the Modigliani-Miller theory states that the market value of a firm does not depend on its capital structure but rather on forecasted upcoming revenue in an ideal market, assuming there are no taxes.
The Pecking Order Theory emphasises that due to asymmetric information, firms ought to opt for financing using internal funding sources such as retained earnings as their first option and then use debt financing as their second option before equity financing as a last option. There is another viewpoint that professes it is cheaper to fund investments with retained earnings than with debt or equity because of the cost of capital. Also, to reduce information failure and other factors, some companies mostly grow or execute projects with internal funding because it is believed a company’s management are more well-informed about their own operations than outsiders such as lenders and investors who most often also set rules of engagement for the company.
The value of a business increases when it is able to decrease Weighted Average Cost of Capital (combination of all sources of a company’s capital—including common stock, preferred stock, bonds, and any other long-term debt) leading to optimal capital structure. It is therefore imperative for businesses that want to increase profitability to pay key attention to their capital structure. This is because when a business adopts the right capital structure – ratio of debt and equity – that maximises return on assets and enables higher profit to be attained and retained, the business can increase its profitability; thereby increasing shareholders’ wealth.
In conclusion, to position a company to be financially superior thereby maximising its value and shareholders’ wealth, there must be an excellent ratio of debt and equity unique to that particular company. It is therefore significant for SMEs in Ghana to focus on this area and plan accordingly to future-proof their businesses.
About the writer:
King is a business strategist with expertise in executing projects and helping companies achieve their goals in diverse industries.
The protection that vaccines give against coronavirus infection, and potentially severe disease, is highly likely to wane over time so vaccine campaigns will continue for years to come, scientists told the British government’s advisory group.
“It is highly likely that vaccine induced immunity to SARS-CoV-2 infection, and potentially severe disease (but probably to a lesser extent) will wane over time,” according to an executive summary of a document considered by the government’s Scientific Advisory Group for Emergencies (SAGE).
“It is therefore likely that there will be vaccination campaigns against SARS-CoV-2 for many years to come, but currently we do not know what will be the optimal required frequency for re-vaccination to protect the vulnerable from COVID disease,” the scientists said.
The document, titled “How long will vaccines continue to protect against COVID?”, was written by prominent virologists and epidemiologists from Imperial College London, University of Birmingham and Public Health England.
Britain has approved and is using three shots – Oxford-AstraZeneca, Pfizer-BioNTech and Moderna – in a mass vaccination programme that started in December 2020.
Real world data show that these vaccines protect with 95% or greater effectiveness against the Alpha variant that dominated in Britain in early 2021, the scientists said, although the ability of the shots to protect against infection and onward transmission was lower.
They said it might be expected that vaccine effectiveness would remain high for severe disease but effectiveness against mild disease and infection could fall off over time.
Anecdotal reports from Britain and Israel, which rolled out a comprehensive early campaign, supported that concept, they said.
Israel will begin offering a third shot of the Pfizer-BioNTech COVID-19 vaccine to people aged over 60, a world first in efforts to slow the spread of the highly contagious Delta variant.
Since the emergence of the Delta variant, the Israeli health ministry has twice reported a drop in the vaccine’s efficacy against infection and a slight decrease in its protection against severe disease.
In a separate report to the UK government on July 22, scientists said there was a “realistic possibility” that new strains could emerge that could lead to more widespread severe disease or evade the impact of the current vaccines.
The emergence of such strains could lead to a return to tighter controls and lockdowns, with a consequent impact on economic activity. (Source: Reuters)
President Nana Addo Dankwa Akufo-Addo has admonished African governments to build robust financial compliance systems and ensure its strict enforcement, to protect and optimise the resources at the continent’s disposal.
He said for Africa to be able to transform herself, and become the epitome of economic empowerment and self-reliance, she needs to have the wherewithal to ensure effective resource management, and to prevent illicit outflows from the continent.
Speaking on the theme: “Financial Crime Compliance and ESG-The Future of African Investment”, at the EBII Africa Investments Risk and Compliance (IRC) Summit at the weekend, at the University of Oxford, the President referenced a recent report that put the cost of financial crime compliance across all financial institutions, globally, at an all-time high of $180.9 billion for the year 2020.
He pointed out that part of the reality in Africa was that there were huge illicit financial outflows, as captured in the 2015 Thabo Mbeki report on Illicit Financial Flows from Africa, which revealed that Africa was losing, annually, more than $50 billion through illicit financial outflows.
“Five years later, according to UNCTAD’s Economic Development in Africa Report 2020, the figure has gone up from US$50 billion to $88.6 billion each year. That is a lot of money in any currency, and it is money we ill-afford to forego. It is money that would make a significant addition to the investable funds of the continent,” he said.
President Akufo-Addo stated that persons, largely the multinational companies, who come to do business in Africa, are involved in these illicit transactions, with the complicity of some Africans.
“We must, therefore, build robust financial compliance systems, and ensure strict enforcement as a deterrent. A strong regulatory environment, whilst reducing these illicit outflows, would, in the end, lead to more private capital being attracted to the continent for genuine investment,” he added.
The President noted the Organisation for Economic Co-operation and Development’s (OECD) new initiative that would require multinationals to pay tax in countries where they have commercial, not jurisdictional, presence, was a welcome enterprise, saying, the “acid test of our friendship with countries, which are the hosts of these multinational corporations, should be the extent to which they oblige them to comply with this new initiative.”
He was pleased that the G7 Nations had accepted the OECD’s initiative, and backed the principle with a proposal for a 15% minimum tax rate for multinational groups on their revenues from the countries of operation.
We, in Africa, must be both vocal in defence of our interests, and vigorous in promoting remedial measures,” he stressed.
Whilst expressing relief that Ghana had been removed from the Financial Action Task Force (FATF) ‘Grey List”, following the renewal of the international community’s confidence in Ghana’s Anti-Money Laundering and Countering the Financing of Terrorism regime, President Akufo-Addo pointed out that many of the regulatory requirements put in place are cumbersome and expensive for small countries.
“For example, the FATF’s Recommendation 32 requires countries to take measures to prevent terrorists and criminals from using cash couriers to finance their activities, and launder their funds. Countries are required to implement a compulsory declaration system requiring everyone crossing a border and transporting currency or bearer negotiable instruments of a value exceeding a certain threshold to declare it to the authorities. To Africa’s predominantly cash-based economies, this is a daunting task.
“You might, thus, find your country falling foul of the regulations, not because you have done anything wrong, but because you do not have the means to keep up with the paperwork. It would be worthwhile for all stakeholders to agree on efficient, workable measures. And yet, there is not really an option of opting out,” he stated, reiterating “we would have to demonstrate that we can play by the rules, just as the investors should, and, thereby, safeguard the future of African investments,” if Africa is to be an integral part of the financial world. GNA
Ethiopian Airlines Cargo and Logistics Services and Liege Airport have announced that they have renewed their long standing partnership agreement until 2026.
Liege Airport, Belgium’s largest cargo airport and the 6th largest cargo airport in Europe, will continue to be Ethiopian Airlines cargo hub serving as a freighter gateway between Africa and Europe for the next five years. Ethiopian Airlines Cargo and Logistics Services, Africa’s largest cargo network operator, has been working with Liege airport for its freighter operations between Africa and Europe.
Ethiopian Airlines Cargo and Logistics Services Acting Managing Director, Mr. Enquanhone Minyashal said “We are glad to have renewed our partnership agreement with our long-standing partner airport at a time when we are registering tremendous growth in our cargo destinations and capacity. In collaboration with Liege Airport, Ethiopian Cargo and Logistics Services has been providing fast and secure cargo transportation service across Europe and beyond for the last 15 years of successful cooperation. In the next five years, we will work to transform our freighter operation to serve Europe better with our renewed commitment with Liege Airport. As the largest pan African carrier, Ethiopian Airlines will continue to strengthen its partnership with Liege Airport to boost its freighter operations between Africa and Europe.”
Steven Verhasselt, VP Commercial of Liege Airport said “First of all, Liege Airport would like to congratulate Ethiopian Airlines and all its staff and partners a very happy 75th birthday. It is with great pride that we are part of the Ethiopian’s success story for almost 15 years and LGG will continue to be Ethiopian Airline’s cargo hub in Europe. Looking back from the start to where we are today, Ethiopian has already operated 15,000 freighter flights into LGG, approaching an incredible 1 Million Tonnes of cargo carried. Still, Steven Verhasselt highlights, this is the past and can be considered as a very impressive start. Today, we celebrate the future. Ethiopian and
LGG have renewed their partnership agreement that not only confirms the European Cargo hub in LGG for the next 5 years but also states that Ethiopian will become much more than an airline flying into LGG. In the future a dedicated cargo hub can be established in Liege North, for which Ethiopian was the launch customer to start with. We are very much looking forward to this next step that will help Ethiopian to serve its customers even better. More than ever, LGG will be the hub for Ethiopian and the main freighter gateway between Africa and Europe.”
According to the African Airlines Association’s (AFRAA) report, Ethiopian has been ranked first by passenger and cargo traffic in 2020. Ethiopian carried 500 thousand tons of freight and 5.5 million passengers through its main hub, Addis Ababa Bole International Airport.
Ethiopian recently has been honored with gold award for the volume of cargo transported to and from Guangdong Airport in 2020 by Logistics of Guangdong Airport Authority Co. Ltd. during the seminar held in 2021 in Guangzhou. On the same month, Ethiopian Cargo and Logistics Services won the World Air Cargo Customer Care Award 2021 during the virtual Air Cargo Weeks Award program held on 05 May 2021.
Ethiopian has been contributing in saving the world during this pandemic. So far, the airline has operated 450+ charter flights of PPE shipment to combat COVID 19 and transported more than 30 million doses of vaccine to more than 24 countries.
1.The unit price of the Antonov An-225 Mriya is between US$200million and US$250million.
2. The term Mriya refers to the word dream or inspiration in English.
3. It is bigger than an Airbus 380 airliner and the Boeing 747 Freighter.
4. The An-225 Mriya can fly at a maximum speed of 850km/h.”
5. It requires at least six crew: pilot, co-pilot, two flight engineers, navigator, and radio operator.
6. It is designed as a Strategic Airlift Cargo Aircraft.
7. It has a passenger capacity of 70.
8. It was designed by the Antonov Design Bureau in the Ukrainian SSR within the Soviet Union during the 1980s.
9. Only one remains in operation
10. The Antonov An-225 Mriya the heaviest fixed wing aircraft in the world to carry 640t of cargo.
Ghana is one of the few countries where the aircraft has successfully transported strategic cargo.
For the African Continental Free Trade Area (AfCFTA) to achieve its main objectives of creating a single market for goods and services, promote industrial development and sustainable and inclusive socio-economic growth, African governments have been advised to embrace digitisation heavily.
Eric Osiakwan, the Managing Partner of Chanzo Capital, gave the advice when he spoke at a Business Executive Breakfast Series organised by MTN themed ‘Accelerating SME Growth and Development: The Role of Digitisation’.
“Digital breaks barriers, digital solves corruption, digital creates enablement, and digital creates effectiveness and efficiency. So, there are so many benefits that if governments put their heads to – and begin to drive their economies toward – digitisation, it is going to create a strong, enabling environment that drives a lot of the entrepreneurship needed; which will create a lot of incentives entrepreneurs need to lead the solutions that will push the economies forward,” Mr. Osiakwan stated.
Speaking from his base in Kenya, he urged Africa governments to create the needed enabling environment for digitisation, which he observed will prove very critical to the success or otherwise of the continental free trade area.
For decades, regional integration in Africa has been hampered by the lack of political will exhibited by member-states, political instability, the multiplicity of memberships to Regional Economic Communities (RECs), and inadequate funding.
According to the African Union (AU), intra-African trade is estimated to increase by 52.3 percent (US$34.6billion) under the AfCFTA.
The free trade area will cover a market of 1.2 billion people and a gross domestic product (GDP) of US$2.5trillion across 54 member-states. The continental trading bloc is expected to be the world’s largest free trade area since the World Trade Organisation’s (WTO) formation in terms of the number of participating states.
Ghana in 2020 handed over the secretariat of AfCFTA to the Chairperson of the African Union Commission, Moussa Faki Mahamat, at a ceremony in Accra.
Touching on the theme ‘Accelerating SME Growth and Development: The Role of Digitisation’, Mr. Osiakwan stressed that African governments need to create a policy framework for innovation so that the continent’s young entrepreneurs can envision creating new solutions to existing problems.
“We have seen a strong optimisation within the private sector, so it begs the question that if government were to become a strong enabler, would you have more companies and more opportunities in that area?” he stated.
Meanwhile, he commended the government of Ghana for embracing digitisation.
On his part, the Chief Executive Officer of McDan Group, Dr. Daniel McKorley, stated that digitisation has “brought us closer to success than we can ever imagine”.
The MTN Business Executive Breakfast Series is a quarterly platform created by MTN to discuss issues and proffer solutions to challenges facing the economy across all its sectors: including health, education, technology, SMEs and many more.
Flights from South Africa will remain suspended until July 6, Emirates Airline has said.
Daily passenger flights to Johannesburg will operate but outbound services remain suspended.
In addition, passengers who have been to, or connected through, South Africa in the previous 14 days will not be permitted on any Emirates flights bound for Dubai.
The decision was “in line with government directives that restrict the entry of travellers originating from South Africa, into the UAE,” the airline said.
All Nigeria flights off
Passengers will also not be allowed to travel to, or from, Nigeria until further notice.
People travelling to and from Lagos and Abuja will not be accepted for travel, nor customers who have been to, or connected through, the West African country in the past 14 days.
Flights between the Emirates and Nigeria were first halted in March after a strain that was markedly more resistant to vaccines, similar to the South Africa strain, was detected.
India flights still back on
On Saturday, Dubai’s Supreme Committee of Crisis and Disaster management said airlines were given the go-ahead to fly between India, Nigeria and South Africa from June 23.
Emirates said it would set out India flights soon, while Indian carriers were expected to put out flight details and tickets imminently.
Passengers from India will require a valid UAE visa to travel and must also have had both doses of a UAE approved Covid-19 vaccine.
They must also take a PCR test on arrival and agree to “institutional quarantine” until they receive the result. ( source: NUAE)
The airline has been gradually and safely rebuilding its route network and advancing its strategy to optimise its presence in key markets to serve leisure and growing business travel demand, as well as segments of travellers visiting friends and relatives. Today, Emirates serves 115 global passenger destinations, and by the end of July, it will have recovered close to 90% of its pre-pandemic network, operating 880 weekly services across 124 cities.
The airline will resume services to seven cities in July including: Venice on 1 July; Phuket, Nice, Orlando and Mexico City on 2 July; Lyon on 9 July and Malta on 14 July. Emirates will also launch flights to Florida’s second largest city and one of the world’s most popular holiday spots, Miami, starting 22 July.
Sheikh Ahmed bin Saeed Al Maktoum, Emirates Chairman and Chief Executive said: “Emirates is committed to keeping Dubai, businesses and communities around the world connected and we are working hard to rebuild our network and secure access to more destinations in partnership with various authorities and stakeholders. We are encouraged by the latest developments as many countries have begun to turn the page and reopen for international visitors, and we are seeing strong signs of pent-up demand wherever restrictions have eased.
Emirates is nimbly matching up flight services and identifying opportunities to grow our footprint, and provide customers more opportunities to safely get where they want to go this summer, offering best-in-class service, greater convenience and more choice.”
More flights to top destinations
Across its network, the airline will boost capacity and expand its schedules by layering on frequencies for the summer, connecting more customers with popular destinations and adding more choice and convenience as they plan their long-awaited holidays.
Emirates will be adding frequencies to 12 cities across Europe, Africa and North America as more destinations re-open for international visitors, and offer quarantine free travel. Emirates destinations with enhanced schedules for July and August include: German cities Munich, Dusseldorf and Hamburg; Zurich; Vienna; Prague; Madrid; Stockholm; Brussels; Lisbon; Chicago and Tunis. In Europe, the airline currently flies to more than 30 cities in 20 countries including popular holiday destinations Greece, Spain, Italy, France and Malta, which offer quarantine free arrivals.
In the United States, with rapid vaccine rollouts and the reopening of air travel at a rate outpacing the world, Emirates will continue to build its presence. With the addition of Miami to its network in July, Emirates will operate over 70 weekly flights to the US, offering over 26,000 seats across 12 gateways including Boston, Chicago, New York (JFK and Newark), Houston, Dallas, Los Angeles, San Francisco, Seattle, Washington DC and Orlando. The airline is also ramping up its trans-Atlantic operations Milan-New York and Athens-Newark to meet large passenger volumes and high demand across its premium cabins.
An expanded A380 summer network
Emirates will also boost its A380 network this summer, bringing its flagship experience to 15 cities on 129 weekly services. During the summer, the airline plans to activate over 30 of its A380s to augment its 151 strong fleet of Boeing 777s. The Emirates A380 experience continues to be sought after by customers, with many going out of their way to book their travel on an Emirates A380 for its signature products, spaciousness, quietness and unmatched levels of comfort.
Emirates will be deploying the A380 to the following cities during the summer period: Cairo, Jeddah, Amman, Guangzhou, London Heathrow, Manchester, Frankfurt, Vienna, Paris, Munich, Moscow, New York JFK, Los Angeles, Washington D.C. and Toronto. Stepping up of deployment of the A380 demonstrates the importance of the aircraft to Emirates’ recovery and growth strategy. The A380 ensures the efficient use of capacity on high demand routes, and enables Emirates to deliver its sought-after A380 experience to more customers, helping the airline to maintain its leadership position in key cities across its network.
Emirates customers can rest assured this summer while travelling that their health and safety continued to be a top priority with the latest health and safety measures in place. When flying out of Dubai, customers can take advantage of contactless technology at nearly every step of their journey for an added layer of safety. The airline will also be boosting its digital verification capabilities, providing its customers even more opportunities to utilise the IATA Travel Pass this summer, and customers flying out of Dubai can also enjoy a paperless experience when verifying their Covid-19 related medical records as part of the airline’s tie-up with the Dubai Health Authority.
Emirates leads the industry with customer centric solutions that make travel planning stress free with even more generous and flexible booking policies, an extension of its multi-risk insurance cover, and helping loyal customers retain their miles and tier status.
Takatso, the consortium picked to buy a majority stake in SAA, could raise its stake if the airline runs out of money, ensuring that the government is off the hook for any possible future recapitalisation efforts.
The consortium, which is made up of private equity infrastructure investment fund Harith and aircraft-leasing company Global Aviation, will own 51% of the shareholding in the airline, while the government will retain 49%.
Takatso, the black-owned private sector consortium selected as the government’s preferred strategic equity partner for SAA, has big plans for the airline, including a possible listing on the JSE in the next few years, as it looks to change the fortunes of the airline, which recently emerged from a 16-month business rescue process.
“If you consider the plans we have for SAA in the next three to five years and you consider the growth that is possible, we believe it will be a listable entity,” said consortium chairperson Tshepo Mahloele in an interview on Friday.
“It is an iconic brand that we should be able to use to promote more inclusivity. It will be part of the whole confidence-building exercise of getting the general populace to participate in the ownership of this iconic brand.” (SundayTimes/ BDaylive)
THE FUTURE OF WORK CAPSULES:
At the just ended Egyptian African Businessmen Association (EABA)’s African Women’s Conference organized under the theme: “the role of the African woman in promoting inter-regional trade post covid-19” held virtually on zoom with participants from most African countries and beyond; I made a strong business case for the African continent arguing it is about time African’s tell our own stories the African way.
Speaking on the topic the role of human resources in supporting African Businesswomen to boast intra continental trade post covid-19, it is vital to know decisive action from government, policy makers, stakeholders, entrepreneurs and all people of goodwill will support the realization of the African Continental Free Trade Agreement (AfCFTA) and the African Unions agenda 2063.
This is because beyond the numbers and negotiations, we need decisive actions and collective efforts of the African people to reach this realization. We have all come to the acceptance that AfCFTA is a legal instrument which seeks to create a single market for Africa. Just as AfCFTA represents much more that trade integration, I believe it also seeks to promote that significant milestone journey to African’s integration and development serving as a catalyst for new ways of doing business, producing, working and trading within Africa and the rest of the world.
To appreciate the role of human resources in supporting African business women to boost continental trade post covid-19, you will agree with me that HR plays a key role in the developing, reinforcing and culture change of an organization. Remuneration (pay), performance management, training and development, recruitment and onboarding become great ways we seek to reinforce those values of the company as essential elements of our business culture.
The same way, to project clearly the new African business culture, we should be interested in good performance management indicators, great wealth generation and creation mechanism as means to supporting our own citizens to create and generate wealth from within the African continent where the grass is supposed to be greener always as a result of all the rich natural mineral resources available to the continent.
As it stands now, there is a worrying trend where we see owners of wealth and resources including but not limited to gold, diamond, cocoa and several other minerals leaving them to journey to the west to beg for support. Could it be that, we are unaware of our fortune and wealth? To create a positive and sustainable African centered agenda, it must be driven by African people who must be walked along the new African continental business culture discovery agenda I call it to appreciate the mission, vision and value statement of the leadership, in order to support drive that change. For us to attain that integrated, prosperous and peaceful African agenda driven by its own citizens, the African story must be told the African way.
As put forward by Walt Disney, you can design, create and build the most wonderful place in the world, but it takes people to make the dream a reality.There must be a conscious effort to promoting economic growth for the continent. To make this a reality for Africa, we must focus on the complete African-ization of our body, soul and mind. We have to start from the very basic things we do not see to be perhaps relevant.
Let’s take a look at our reading and learning materials used in educating our citizens. Who writes that African story for our use? Which personalities, heroes and celebrities do we print on our pupils learning and reading materials (exercise books) for use in our educational system? What efforts are made to document all our inventions and patents as original ideas from the African people for the African continent? We can increase the number of days we appear in our own local African print and attire to work to support create jobs for instance.
Economic growth as most economists will explain comes from increasing the quality and quantity of the factors of production which consist of the four broad types such as land, labour, capital and entrepreneurship. Beyond this, the two main sources of economic growth will be assessed from growth in the size of the workforce and growth in the productivity of that workforce where productivity could be a function of output per hour worked for that workforce.
To increase the overall size of the economy, only strong productivity growth can increase ourper capital GDP and income. As a result, we must work to support the transformative African agenda by calling on all and sundry to put hard work above all else as hard work never kills. In as such as a greater percentage of its employees will be pretending to be working most especially within the civil service space and others as governments and other employers also pretend to be paying. At the end of the day, the take home pay earned cannot take most of the workers home. A major cause for corruption and nepotism in our dear African continent.
The complete African-ization of our body, soul and mind should cause us to patronize our own products and services. The quality issues and branding agenda must be supported with policy measures to encourage start-ups and small businesses scalability efforts. We can as well consciously learn success stories from other African countries and apply. We do not always need to reinvent the wheel. Our best bet will be to tailor this success stories to fit our own contextual agenda.
This way, we will be supporting solve our unemployment issues. The subject matter on technical vocational education and training is of great importance to this discussion, coupled with the digitization and the awareness creation about the future of work conversation helping us to act local but thinking global will be a great step in the right direction to supporting us attain that new African brand.
Come to think of it, AfCFTA represents a major opportunity for countries to boost growth, reduce poverty and broaden economic inclusion. Implementing AfCFTA would lift 30 million Africans out of extreme poverty and boost the incomes of nearly 68 million others who live on less than $5.50 dollar a day. It will as well boost Africa’s income by $450 billion by 2035 representing a gain of 7% whiles adding $76 billion to the income of the rest of the world. Increasing Africa’s exports by $560 billion, mostly in manufacturing as well as promoting equal work for equal pay shooting lager wage gains for women (10.5%) than for men (9.9%) knowing when women win we all win as a society. AfCFTA implementation should boost wages for both skilled (10.3%) and unskilled workers (9.8%) as put forward by the World Bank.
The implementation should be able to support the African continent see the biggest improvements in countries with currently high poverty rates. A greater implementation of the agreement should see West Africa see the biggest decline from 12 million representing more than a third of the total for all African in the number of people living in extreme poverty. Same way, Central Africa would see a decline of 9.3 million, Eastern Africa for 4.8 million, Southern Africa for 3.9 million and countries with the highest initial poverty rates would see the biggest declines in poverty rates. Particularly for Guinea-Bissau, the rate would decline from 37.9% to 27.7%. Same for Mail, we will see a decline from 14.4% to 6.8% and for Togo we will see a decline from 24.1% to 16.9%.
It is great to realize also that, most employees may be jobless as a result of the covid-19 pandemic and its related job loss issues; but are not really worthless and must be treated with some respect and dignity. For fewer sectors facing job losses, government will need to be ready to support workers with adequate safety nets and policies to retain workers, and increase the readiness of the workforce to take advantage of new opportunities.
The digital agenda must be high on our drawing board as more jobs move online currently. We must as a people focus on the digital transformation strategies to creating jobs and contribute to achieving the set agenda 2063. We must remove barriers to innovation that prevents smaller firms from competing in the digital age.
Women and youth account for majority of the population as such concrete policy measure and investments are needed for them. Africa’s recovery from covid-19 must enhance Africa’s resilience. As a block, trade of all types of goods and services will support achieve the Sustainable Development Goals (SDG’s) and the agenda 2063 of the African Union. As we anticipate trading under AfCFTA, the effective implementation of all the known factors will include support for women and the youth for us to succeed. The smartest thing to do is to invest in women and girls because when women success we all succeed.
To reduce poverty in sub Saharan African for instance, aside all known factors women must be allowed to become key decision-makers. This is because a world where we invest in girls and women looks prosperous, more economically stable and full of healthy mothers and newborns. This is the new Africa we want. Let’s support create that ideal Africa together. Join me pledge to telling the African story the African way.
Source :Baptista Sarah H. Gebu (Mrs.)