The African Union (AU) and the United Nations Economic Commission for Africa (UN-ECA) on Thursday stressed the need to keep the momentum going in the realisation of the Continental Free Trade Area (CFTA) for Africa’s development.
AU Commission Chairperson Moussa Faki Mahamat and Vera Songwe, Executive secretary of the UN-ECA, affirmed on Thursday that AU member states should focus on the effective implementation of the Continental Free Trade Area, saying that it would propel trade in the continent. The decision to establish the CFTA was adopted in January 2012 during the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union with an indicative date of 2017.
According to AU, the CFTA, among other things, helps to create a single continental market for goods and services, with free movement of business persons and investments, and thus paving the way for accelerating the establishment of the Continental Customs Union and the African customs union.
Faki indicated that the continental free trade area is one among the three flagship projects the pan African block targeted during the ongoing summit, together with the free movement of people and the Single African Air Transport Market (SAATM).
Faki, who called on African foreign ministers who are currently in Ethiopia’s capital Addis Ababa as part of AU’s 32nd Executive Council meeting to give due emphasis to the Union’s plans, stressed the need to improve intra-Africa trade connectivity.
Vera Songwe also stressed that “the CFTA presents a great opportunity for Africa to trade itself out of poverty.” “Consolidating this continent into a single trade area provides great opportunities for trading enterprises, businesses and consumers across Africa and the chance to support sustainable development in the world’s least developed region,” Songwe added.
ECA estimated that the CFTA has the potential to boost intra-Africa trade by 53.2 percent by eliminating import duties and to double such trade if non-tariff barriers are also reduced. According to Songwe, the CFTA can also produce more jobs for Africa’s burgeoning youth population as small and medium sized enterprises are able to penetrate regional market and eventually oversea market. The contribution of the continental free trade area for Africa’s women population, who constitutes the continent’s 70 percent of informal trades, is also said to be massive.
According to the ECA, the CFTA, by reducing tariffs, simplifying trade and clearing procedures as well as reducing import duties, would make business more affordable for informal traders to operate via formal channels, which also offers more protection.
However, experts and organizations expressed their concern that trade on the African continent would not improve much with the current poor state of Africa’s infrastructure.
“Africa needs safe, reliable, efficient, affordable, and sustainable physical infrastructure to support economic activities and to provide basic social services, especially for the poor,” Songwe said.