Africa’s plans for a Continental Free Trade Area (CFTA), as a means to facilitate trade and build productive capacities for industrialization, was the focus once again of attendees to the 11th African Economic Conference.
The three-day conference, which took place from 5 – 7 December in Abuja, Nigeria, was co-organized by the African Development Bank (AfDB), United Nations Development Programme (UNDP) and the UN Economic Commission for Africa (ECA).
Established by the Economic and Social Council (ECOSOC) of the United Nations (UN) in 1958 as one of the UN's five regional commissions, the Economic Commission for Africa’s (ECA) mandate is to promote the economic and social development of its member States, foster intra-regional integration, and promote international cooperation for Africa's development.
Made up of 54 member States, and playing a dual role as a regional arm of the UN and as a key component of the African institutional landscape, ECA is well positioned to make unique contributions to address the Continent’s development challenges.
Over 300 participants, including researchers, policy-makers and development partners converged at the conference to share ideas on topical African development issues including how to end hunger and ensure food security in Africa.
The meeting was officially opened by Nigeria's President Muhammadu Buhari, AfDB President Akinwumi Adesina; Acting ECA Executive Secretary, Abdalla Hamdok; UN Assistant Secretary General and Director of UNDP Regional Bureau for Africa, Abdoulaye Mar Dieye.
Participants at the African Economic Conference focused on discussing the situation where, despite overall macroeconomic growth and improved broad governance across the continent, African still has the highest rates of poverty and hunger in the world. No fewer than 230 million of the 795 million people suffering from chronic undernourishment globally live in Africa, resulting in the highest prevalence of undernourishment worldwide.
Among the topics up for discussion were a full range of key African trade policy issues, including Africa’s trading relations with Asia, Europe, the United States and emerging markets. Also in focus was how trade can support gender equality and empowerment, as well as perspectives from the regional economic communities (the RECs). However, the centerpiece of the conference was the Continental Free Trade Area (CFTA) negotiations and related flanking measures.
The CFTA presents Africa with a critical opportunity for continent-wide development. Research shows that a CFTA in goods alone, if complemented by action on trade facilitation could boost Africa’s GDP by 1 percent, with every African country and region experiencing income gains. A similar level of increase could be achieved through trade in services liberalization, with most African countries seeing their income rise by over 1 percent and all African countries and regions studied benefiting, in response to a 50 percent reduction in services trade restrictiveness.
Given that the CFTA negotiations will also cover investment, and assuming the same level of increase relative to the share of investment in Africa’s economy, this would add another 0.5 percent to Africa’s economic output. Adding this up, the CFTA could add up to 2.5 percent to Africa’s annual economic output, which is around $65 billion based on data for 2014.
Perhaps more importantly, and unlike much of the commodity driven growth that Africa has experienced recently, the CFTA is also likely to make growth in the African economy more sustainable and inclusive. This is because many of these gains are forecast to be in the industrial sector which, as ECA has shown is the key to sustained, inclusive and job-rich development. As a result, the CFTA can be expected to give a serious boost to Africa’s industrial sector, with intra-African trade in industrial products expected to rise by $60 billion annually due to a CFTA in goods if accompanied by robust trade facilitation measures.
The conference called on all concerned parties to seize the opportunity and find ways to turn the CFTA into a reality.