BY DANIEL ALEMAYEHU
Africa could be labeled as the supplier of mostly unprocessed products to the world. It is crystal clear that the continent in its every part has the potential to provide the most important resources to the globe. One cannot deny that Africa still has untapped natural resources and human resources even after the long and bloody experience of colonization.
Needless to say, continents, apart from Africa, especially those in the northern hemisphere, have developed a special type of system that unites one another and fosters their development in every aspect. These continents have exerted their efforts to achieve their goals.
Though Africa could not achieve what the rest of the continents have accomplished, it is undeniable that Africa has sacrificed its opportunities for the sake of the rest to prosper uninterruptedly. It was a tough route for Africa to find its way to success.
It is the fact that in order to change the course of the system, African nations have designed special strategies to achieve their vision to create ‘Africa we want’ through the Agenda 2030 and Agenda 2063 of the African Union. In this long-term agenda, African nations, through their leaders, have signed multiple agreements to meet the desired goals.
Days before, the United Nations Economic Commission for Africa (UNECA) organized the 2023 ECA (Economic Commission for Africa) Conferences of Ministers dubbed ‘Fostering Recovery and Transformation in Africa to Reduce Inequality and Vulnerabilities’. At the Forty First meeting of the Committee of Experts of the Conference of African Ministers of Finance, Planning and Economic Development 2023, Acting Executive Secretary of the United Nations Economic Commission for Africa (UNECA), Antonio Pedro delivered a speech. He stated that at this time, Africa is leading the global poverty.
“The continent is home to more than half of the world’s poor – 54.8 percent in 2022 – overtaking South Asia with 37.6 percent. In the wake of the COVID-19 outbreak, 62 million people were pushed into poverty in just one year, with an additional 18 million estimated to have joined their ranks by the end of 2022. As many as 149 million non-poor – or about 10 percent of Africa’s population – remain at high risk of falling into poverty,” the Acting Executive Secretary disclosed.
The secretary further mentioned that 695 million Africans are either poor or at the risk of falling into poverty. The figure implies that half of the total number of the population of Africa is under poverty. In this regard, women and girls are more vulnerable.
As to Pedro, amidst those internal and external challenges that both Africa and the world have been experiencing, there are still way outs for Africa to achieve its ambition to be a developed continent. The secretary pinpointed that there are two major actions to be taken in the nearest possible time. The two actions are financing the continent’s development and aggressive pursuit of sustainable industrialization and economic diversification to transform Africa’s natural resources into tangible benefits for its people.
In order to grasp the potential benefits of what the secretary has highlighted, the formation of the African Continental Free Trade Area (AfCFTA) plays a great role. It was stated by the secretary that the free trade area will scale up the investment in manufacturing that leads to intra-Africa trade augmentation.
Pedro said, “This will bring supply chains closer to home and inject a degree of self-sufficiency in essential products such as medicines, food and fertilizers. It also provides us with a unique bargaining tool as we negotiate for fairness and equity in the utilization of our natural resources for development.”
According to a report presented in the conference on assessment of progress on regional integration in Africa by the Director, Regional Integration and Trade Division of the Economic Commission for Africa, Stephen Karingi, the establishment and beginning of the African Continental Free Trade Area in January 2021 was taken as one of the major progress to accomplish Africa’s ambition to create trade and market integration.
In October 2022, according to the report, 44 different African states signed the agreement to establish the continent’s free trade area. However, the report mentioned that challenges including the Ukraine war and prior to that the global pandemic, COVID-19 have created a major shake to the economic and social bonds of the world. Not only that, other socio-economic hurdles and inflation on food and fuel prices also made life hard for the people of Africa.
The report further highlighted the trade integration of the continent. It is stated “Africa’s contribution to global trade remains weak.” Besides, in recent decades, the service sector of the continent has shown better progress in order to assist the growth and overall development of the continent. As of a reliable data from 2021, service trade of Africa accounts for 1.7 percent of the global service exports.
The report further disclosed that starting from 2017; Asia has become Africa’s main trade partner, followed by Europe. To this regard, 43.7 percent of Africa’s trade in goods goes to Asia.
In the present climate, apart from the United States of America, China has become one of the countries with gigantic economic power. In recent times, many reports presented that China has become the main trade destination for many African states. Likewise, China also contributes 40 percent of the trade between Asia and Africa.
Here, what matters the most is that though African nations have traded with the rest of the world, the report affirmed just like the past many years, “African countries traded less with each other in 2021, with a reduction of intra-African exports by 34 percent over the period 2020-2021.”
Contrary to the previous way of doing trade, the report noted that Africa has taken tangible actions to secure greater intra-continental trade including the adoption of an action plan to boost intra- African trade and the agreement ratified by the states. In addition, the ratified agreement will open the door to eliminate over 90 percent of tariffs on goods.
It is also expected to liberalize trade in services gradually, and to create a single African market of more than one billion consumers with a total gross domestic product of more than $3 trillion. Such tangible actions will bring additional benefits to the people of Africa including job creation and economic growth. Again, the above benefits will unlock the long awaited continent’s sustainable industrialization and development.
Unlike the traditional free trade area, the new African Continental Free Trade Area will incorporate sectors such as investment, services trade, intellectual property rights and competition policy, women and young people in trade, and digital trade. Progressive actions have been taken by the member states’ negotiations on preferential tariff concessions and rules of origin, trade in services.
In this regard, as of November 2022, 47 tariff offers were submitted by member States of which 36 were technically verified and certified to have met the threshold. On trade in services, 43 countries submitted their offers and 22 schedules of specific commitments were adopted at an extraordinary summit held in Niger. Eight simultaneous negotiations on rules of origin have also been conducted, reaching agreement on 88.3 percent of tariff lines, it was reported.
Moreover, in recent years, regional economic partnerships have been strengthened. Accordingly, The Tripartite Free Trade Area, which incorporates three regional economic communities, namely COMESA, EAC and SADC, was officially launched in June 2015 in Sharm el-Sheikh, Egypt, with the aim of fostering integration and helping member States to circumvent the challenges arising from overlapping memberships in regional economic communities. As of July 2022, there were 22 signatories to the Tripartite Free Trade Area Agreement among the 29 States of the three regional economic communities, and 11 States had ratified it. Three additional ratifications are required to operationalize the Tripartite Free Trade Area.
To achieve what has been planned and see the ‘Africa we want’, every stakeholder coupled with the people of Africa must work for the unified goals. Organizations such as the United Nations Economic Commission for Africa (UNECA) confirmed that it will provide technical support and other necessary analysis in order to enhance the initiatives mentioned above.
The Ethiopian Herald 19 March 2023
