AfCFTA Can Spur Recovery, Transformation, Says ECA Integration &amp; Trade Division Director - ENA English
AfCFTA Can Spur Recovery, Transformation, Says ECA Integration & Trade Division Director
Addis Ababa, January 22/2021(ENA) The African Continental Free Trade Area (AfCFTA) can help drive the continent’s economic recovery from the deadly coronavirus pandemic and spur transformation, according to Economic Commission for Africa (ECA).
ECA Regional Integration and Trade Division Director,Stephen Karingi said during the 6th Program for Infrastructure Development in Africa (PIDA) Week that given that Africa does not have the fiscal space for trillion-dollar stimulus packages as it attempts to build, the AfCFTA, driven by the private sector, is going to be key in unlocking Africa’s potential.
He stressed that Africa will have to look for innovative alternatives to push its recovery efforts. Quality infrastructure development is crucial, too, if the AfCFTA is to spur economic growth on the continent.
Results from the liberalization of trade in goods alone under the AfCFTA reform show that Africa's global GDP and exports would increase, the director pointed out.
According to him, Africa’s GDP is forecasted to increase between 28 and 44 billion USD after full implementation in 2040, as compared to a baseline without tariff liberalization.
The bulk of the benefits of exports would be for intra-African trade, with intra-African exports foreseen to increase by around 50-70 billion USD.
“It is worth emphasizing that two-thirds of the latter gains would be realized in the manufacturing sector, providing invaluable opportunities for industrialization,” Karingi elaborated.
Furthermore, he emphasized that “integration policies should lead to convergence of incomes, and our findings are an important result.”
The AfCFTA agreement instructs state parties to liberalize trade in services, remove some of the non-tariff barriers (NTBs), along with adoption of trade facilitation measures.
The director said transformation through AfCFTA will occur by unlocking manufacturing potential and facilitating industrialization. It will also help build a robust and resilient private sector, which is vital for inclusiveness and sustainable growth.
He said the private sector will be key to the success of the AfCFTA and recovery from COVID19. It will bring in enhanced regulations and improved environment, and huge deficits in infrastructure services could be addressed by the scale and competition that the AfCFTA provides, helping to attract finance.
The Program for Infrastructure Development in Africa (PIDA) is the African Union’s strategic framework for regional and continental infrastructure development.