This is a guest post from Africa Canada Trade and Investment Venture Inc
(Member since 2022)
The Government of Canada has continually stated its commitment towards strengthening Canada’s connections to the global economy. A key part of this strategy is around increasing overseas exports by 50 percent by 2025 as well as attracting Foreign Direct Investment to Canada (see international.gc.ca for more information).
Canada will require an “outside the box” export and investment attraction strategy to meet this target. It will require a focus on “non-traditional” high traffic markets in a bid to penetrate these markets. As always, the Government of Canada must create the necessary “comfort” programs to give private sector businesses access these markets.
As of today, Canada’s major trade partners include USA, China, Japan, and the European Union. The focus on the Asia-Pacific region was a result of the rise of the middle class in Asia; a diversification strategy was developed in line with the changing demographic, and this strategy has yielded visible results to date. However, in light of recent socio-political events affecting China (to a larger extent) and the USA (to a lesser extent) — as well as the Brexit situation in the UK and the rest of Europe — a business case for diversification into new markets has become a focus for discussion.
The recently enacted Africa Continental Free Trade Area (AFCFTA) made Africa the world’s largest free trade area. Along with AFCFTA and a market of 1.2 billion people, Africa seems to be a logical destination to support Canada’s Trade and Export Diversification Strategy. Africa today accounts for around 17% of the world’s population. Countries such as Nigeria (a population of over 200 million people), South Africa, Kenya, and Egypt all lead the pack with consistently growing economies (4.5% average) and unlimited international trade opportunities. The AFCFTA agreement will not only boost intra-African trade — it will also make it easier for exporters to access the African market.
According to data from Nova Scotia Department of Finance and Treasury Board as well as OECD, Nova Scotia’s top exports include rubber products, seafood products, fishing and aquaculture products, pneumatic tyres, and uncoated paper. These are all products sought after in the African Market. Specifically, Nigeria currently imports more than 2.5 million tonnes of seafood annually and South Africa currently imports paper and paper board estimated at $800 million USD annually. Services and products related to IT, engineering, and technology all present opportunities for companies based in Nova Scotia to explore.
A recent review focused on major companies based in Europe and the USA who have made major successes in Africa. According to the review, their strategies included building partnerships with local companies in the target market and developing mutually beneficial relationships with suppliers. Critical to the success of this strategy for Nova Scotian businesses will be utilising the various supports available for businesses looking to export their products and services.
As we move into the post-pandemic recovery phase, with the “economy reset” button turned on, it is imperative that Nova Scotian businesses seek out new export markets outside the traditional export destinations. With recent socio-economic and political changes in China, the USA, and Europe, there has never been a better time to explore the markets in Africa.
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