The African Continental Free Trade Area (AfCFTA) increased intra-African trade by 20 per cent in 2022.
This was disclosed by the Acting Executive Secretary of the Economic Commission for Africa (UNECA), Antonio Pedro, at the Ninth Session of the Africa Regional Forum on Sustainable Development in Niamey, Niger.
No time to celebrate: Meanwhile, the UNECA boss noted that despite the growth, it failed to hit the commission’s target of 52%. He said:
- “Certainly not yet. But the levels of intra-African trade have gone up from 13 per cent or so, before the African Continental Free Trade Area agreement was adopted, to now around 20 per cent but that is not good enough because other regions are trading amongst themselves.
- “I mean, above 70 per cent or so Europe, Asia. So, that certainly is our target.”
Increased Trade: Pedro added that the rise in intra-African trade, was already encouraging certain countries to trade amongst themselves.
- “Under the AfCFTA Trade Division, Kenya, a couple of other countries Ethiopia and so on and so forth. So now it’s really about scale, it is about making these movements that cover the entire continent.
- “One is to look at the product complementarity between our countries, so we could have African countries trading inputs with another country where, perhaps, you have a much larger processing capacity and one example that I like to cite is between, for example, Gabon and Cameroon.
- “Cameroon has processing facilities for palm oil products that require additional inputs coming from the sub-region, and in this case, one could look at certain processed palm oil products coming from Gabon being processed in Cameroon to produce from soaps to oils to all sorts of other things.”
He added the commission was making a trade decision supporting modelling, which was an exercise to identify the best export destinations for African countries.
- “In the case of Cameroon that we have done one study; Nigeria certainly is the closest trade destination, however, what is very interesting is that a country that is not far from Cameroon which is the Democratic Republic of Congo (DRC) is trade distance.
- “Countries that are miles away, China and the U.S. are closer trade-wise to Cameroon than DRC.
- “Why is it that DRC is a trade distance is because there are issues with infrastructure. There are issues with essentially the connections and we need to address those binding constraints to Africa trading amongst themselves such as infrastructure.
- “Some are hard infrastructure that we need to invest in improving links between our respective countries, others are soft infrastructure.”
What you should know: Recall Nairametrics reported in November 2022 that Nigeria adopted the Phase II Protocols of the African Continental Free Trade Area ( AfCFTA.
Phase II Protocols of the AfCFTA range on agreements from intellectual property rights to investment and competition protection.
