Africa free trade area (AfCFTA) – which way forward now?

Sierra Leone Telegraph: 9 July 2019:

The ninth edition of the flagship Assessing Regional Integration in Africa report (ARIA IX) was launched on 6 July 2019 at the African Business Forum in Niamey, Niger.

Titled ‘Next Steps for the African Continental Free Trade Area (AfCFTA), the report argues that AfCFTA’s success will be measured largely by its ability to actually change lives, reduce poverty and contribute to economic development in Africa.

During the launch – which took place in the presence of Niger’s president, the chairperson of the African Union Commission (AUC), heads of UN Agencies and top business persons from across the continent – the executive secretary of the Economic Commission for Africa (ECA), Vera Songwe emphasized that:

“For us to make the AfCFTA work, we need to make competition, industrial policies and property rights work well.” That is what the report is saying, she noted, adding “and I really urge you to read it.”

ARIA IX is jointly published by the ECA, UNCTAD, AU and AfDB.

The secretary-general of UNCTAD, Mukhisa Kituyi, also spoke at the launch and highlighted “competition, investment and intellectual property rights” as crucial requirements in the next phase of the AfCFTA, as expounded in the report.

Mr. Kituyi expressed his “solidarity and partnership with ECA and AUC” and urged the African business community to “take ownership of the integration effort” on the continent.

ARIA IX notes that traditional investment treaties predominate on the continent, with major repercussions for the policy and regulatory space available to policy makers. It holds, however, that the AfCFTA investment protocol represents an unparalleled opportunity for AU member states to revamp the investment policy landscape.

The report recommends that ratification of the AfCTA, which went into force on 30 May 2019, must be followed by effective implementation and that implementation will be more effective if national AfCFTA committees are created by country trade ministries.

Looking ahead, the report considers e-commerce and integration in a digitizing Africa, and how the digital economy can interact with the AfCFTA and trade in Africa.

The Implementing the AfCFTA is about dispelling the crisis of implementation of AU decisions and initiatives and validating the AU and its Agenda2063.

It is a litmus test of African countries’ commitment to economic integration.

Download the report here:

United Nations Deputy Secretary-General, Amina J Mohammed, on Sunday pledged the UN’s full support to the African Union as nations begin to earnestly operationalise the landmark African Continental Free Trade Area (AfCFTA) that is expected to unleash the continent’s all-inclusive economic potential.

In remarks to the 12thextraordinary session of the African Union on the AfCFTA, Ms. Mohammed said the UN stands ready to work in partnership with African countries as they move to implement the historic and game-changing AfCFTA.

“We are already working with 16 African governments to develop national strategies to maximise the opportunities created by this agreement, and we will increase this number from next year,” she told the summit.

“We are committed to working with African institutions to mobilize the resources that will be required for full implementation of the African Continental Free Trade Area. In the first instance, the African Regional Integration Trust Fund will support countries to mobilize resources to finance regional integration.”

Ms. Mohammed said the UN will work with the African Union to coordinate and leverage complementary funding sources from the African Development Bank’s Africa50 Fund, to the African Union’s Programme for Infrastructure Development in Africa (PIDA), and China’s Belt and Road Initiative.

The United Nations Economic Commission for Africa (ECA), she said, is supporting the process of mainstreaming gender and youth employment initiatives into national strategies.

“This will help to ensure that trade policy is both gender-sensitive and responds to demographic realities, thereby contributing more fully to sustainable development,” the UN Deputy Chief said.

“Trade can contribute to either widening or closing inclusion and gender gaps, depending on how the process is managed. So we are also working with governments to counterbalance the distributional and gender-differentiated effects of trade liberalization.”

Ms. Mohammed said it was essential to act now, not only to ensure that women benefit from the AfCFTA but also the African youth given the demographic challenges facing the continent.

She told the African leaders gathered for the landmark occasion to officially launch the AfCFTA that entry into force of the accord was a momentous step.

“But as you have recognised, it is a first step. Realizing its full potential will require changes and improvements in several important areas, including infrastructure development, capacity to export, and non-tariff barriers,” Ms. Mohammed added.

The African Union’s Phase II of the AfCFTA negotiations will tackle competition, investment, and intellectual property rights, which the UNDSG said were some of the regulatory obstacles that create dysfunction in integrated markets.

“I urge you to move decisively and quickly during the transitional period up to 1 July 2020 to reap the rewards of this historic agreement,” she said, adding Africans should take particular pride in reaching this agreement at a time of growing protectionism and rising trade tensions that threaten economic stability and progress around the world.

From free trade to climate change and migration, African countries and regional organizations are developing progressive policies that demonstrate global responsibility and forge a new path for multilateralism and sustainability, Ms. Mohammed said.

“The entire United Nations System will continue to support African countries as you accelerate the continent’s development. Together, we will realize our shared vision of Agenda 2063 and the Sustainable Development Goals, leaving no one behind,” she added.

The world’s largest free trade area, encompassing 54 countries and 1.2 billion people the AfCFTA will bring the promise of trade-led economic growth closer to reality for Africa’s entrepreneurs, industrialists, investors, innovators and service suppliers, said Ms. Mohammed.

“It will create jobs and contribute to technology-transfer and the development of new skills; it will improve productive capacity and diversification; and it will increase African and foreign investment,” she said.

“Perhaps most important of all, the African Continental Free Trade Area demonstrates the common will of African countries to work together to achieve the vision of the Africa Union’s Agenda 2063: The Africa We Want.”

It is a tool to unleash African innovation, drive growth, transform African economies and contribute to a prosperous, stable and peaceful African continent, as foreseen in both Agenda 2063 and the 2030 Agenda for Sustainable Development, Ms. Mohammed added.

Nigeria and Benin signed the historic agreement during the opening session of the summit.

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