This ground breaking agreement by the continent’s leaders has the potential to kick-start Africa’s creative sector’s development trajectory, but creatives must still check the finer details.
BY Edward Tsumele
On Saturday, December 5, the African continent was gifted with an early Christmas present when the continent’s leaders through the auspices of the African Union, (AU) finally agreed on dropping tariffs for goods and services manufactured or designed on the continent’s 54 countries. This deal will come into effect on January 1, 2020. The agreement and details aboutAfCFTA were finalised at a virtual African Union (AU) summit held on Saturday and chaired by President Cyril Ramaphosa.
This ground breaking agreement by the continent’s leaders has the potential to also among other sectors on the continent, kick-start Africa’s creative sector’s development trajectory, but creatives must still check the finer details.
This is a significant development on the continent, in fact a game changer when it comes to how intra-Africa trade will unfold from then onwards, as well as how it is going to trade with the rest of the world as a block with a market value of 1.4 billion people. With such a huge market and presenting itself to the rest of the world as one market block, with the ability to negotiate with other countries of the world from a point of strength when it comes to preferential trade agreements, this has huge implications and spin offs for businesses.
Significantly the majority of the African countries, including the most influential ones in regard to the sizes of their economies, such as South Africa, as per Summit agreement, will start duty-free trading of goods with each other as theAfrica Continental Free Trade Agreement (AfCFTA) comes into effect.
But what does this ground breaking development means for the arts sector? This is a question many in the creative sector must and should be mulling over? For example, where tangible goods are concerned it is a simple and straight forward matter, as goods will be able to be traded across borders duty free, for as long as they have been manufactured on the continent (and there rules that define what constitutes a good’s origin), but where it gets complicated or is unclear at the moment, is when it comes to services that will be traded across borders, and a good portion of the creative sector trades services such as performing comedy, theatrical entertainment, or music shows, such as concerts and festivals.
Does this agreement caters for ease of trading in these creative products in a form of say, issuing free VISAs or completely removing VISAs for touring crew and performers performing in one country from another African country?
Better still, when it comes to literary products such as books, or video products such as films or audio products such as music CDs, will producers of such be able to take these products across borders and set up stall in another country without the need to pay duties? After all these are goods that are currently facing challenges when it comes to intra-Africa trade under the current regimes of trade rules, especially when it comes to custom duties.
Putting it contextually, can a publisher of books in Botswana decide to take the PDF of his book to a printer in Johannesburg who is cheaper and shape the products back to Botswana as books without the need to pay custom duties as he crosses the border?
Similarly can an enterprising film producer in Lagos, shoot his films in South African studios because the quality is better than back home, book a movie screen-house here in South Africa for two weeks before flying back home to screen the same movie there without facing customs tariff barriers?
It is telling that South Africa’s Trade, Industry and Competition Minister Ebrahim Patel is of a view that the agreement will encourage foreign investors to invest in Africa, for example by relocating their manufacturing plants to Africa because presumably because the costs will be cheaper with regards to such things as labour and even rentals. Even more importantly, such a decision and a move, would provide such investors with a much larger market (1.4 billion people), as one marketing block, more than that which is currently provided by Africa’s 54 countries acting as individual entities.
Will this for example make some of the best and biggest studios in Hollywood to relocate or at least have their subsidiaries here, that would commission, produce, market and distribute their products, such as and music here, making them enjoy the benefits of locally made products on the continent?.
Can you imagine, for example, what would happen to the African film and television industry If Netflix would establish a local subsidiary, located in Johannesburg or Cape Town, and locally registered, that would produce all its African content from here and sell them to the continent?
And, so clearly, this development is encouraging and has the potential to kick-start the African creative industry’s development trajectory, even though businesses in the creative sector should watch this agreement closely, to make sure that they again are not forgotten by their governments as they prioritise other sectors over the creative sector. After all, most politicians on the African continent seem to regard the creative sector as nothing more than just entertainment, and not business.
The contribution of the creative sector to the country’s economies must never be underestimated.
For example, one well remembers the news a few years ago when South Africa’s economy was announced then as the biggest, only to be surpassed by the Nigerian economy a few years later, when Nigeria growing film industry, Nollyhood’s contribution to Nigeria’s GDP was calculated and added. One also realises the contribution of America’s entertainment sector to its economy.
That is why businesses in the creative sector must raise their eyebrows, worried when the architects of AfCFTA) at the end of the Summit identified the sectors that still remain to be thrashed out as priorities, with regard to this agreement as: business services, communications, finance, tourism, health, education and transport.
Without doubt these sectors are important in our everyday living, and so is the creative sector. And where is the creative sector in this? Am I missing something, or maybe, in the tones and tones of papers of complicated business and legal jargon of AfCFTA), the creative sector is also included.
However the African creative sector must never take anything for granted, including the fact that they may not be adequately catered for in this game changer of how business trade on the continent will unfold come January 1, 2021. The creative sector must not be caught napping. They must peruse the agreements by their governments thoroughly before celebrating with everyone else. After all, they say the devil is in the detail, and the is a reason for that.