The African Continental Free Trade Area (AfCFTA) can transform Africa’s economy and lift up to 68 million people out of poverty, according to Vice President Yemi Osinbajo.
Osinbajo made this projection while delivering his remarks at the closing of the 2021 Conference of African Insurance Practitioners, themed “Rebuilding Africa’s Economy: An Insurance Perspective.”
He said when hurdles are removed to facilitate intra-African trade, income gains of more than $450 billion can be derived from the free trade agreement.
“The free trade agreement presents a major opportunity for African countries. By some estimates, if we get it right, we can bring several millions out of extreme poverty and raise the incomes of 68 million others who live on less than $5.50 per day,” he said.
“There are potential income gains of up to $450 billion, and just cutting red tape and simplifying customs procedures alone could drive up to $250billion of that sum.”
The vice president urged African insurance practitioners to leverage opportunities in the AfCFTA, saying every smart economic grouping, whether governments or businesses, must be thinking, planning and strategizing for these new times.
Osinbajo said, “So, what does all this mean for the insurance industry in Africa? Well, plenty of opportunities. More trade in goods will mean a greater need for insurance services, brokers, in particular, should expect a boom; demand for trade facilitation services will rise, but obviously companies that already have market presence in other African countries, even if by collaboration, will benefit more than others.”
“We can expect to see more well-capitalized insurance providers from other African countries coming to compete in the Nigerian market. And we shouldn’t be surprised if this happens quickly.
“Services can be set up faster than manufacturing plants. Nigerian financial services companies, especially banks, are already in many African Countries, the likes of Zenith, Access and UBA.
“How about Insurance companies? We should now be looking at developing homegrown international African insurance conglomerates. The time is now.”