Kigali, 20 March 2018 (ECA) - The key to creating an effective free trade area in Africa is to increase production on the continent, to tap on the huge opportunities offered by the African market, which will reach 3.6 trillion dollars by 2025, said Vera Songwe, the Executive Secretary of the United Nations Economic Commission in Africa, ECA. With the historical signing of the African Continental Free Trade Agreement (AFCFTA) set to happen this week in Kigali, she added, “we are witnessing a substantial paradigm shift on the continent, we are saying that Africa can determine its terms of trade”.
Mrs. Songwe made this point during the AfCFTA Business Forum taking place today in Kigali, ahead of the Extra-Ordinary Summit of the African Union, and attended by African Heads of State, representatives of the private sector and the civil society.
The ECA Executive Secretary argued the AfCFTA will create many new trade opportunities in industrial products, rather than the commodities on which Africa’s economies have become too dependent. Intra-African trade in manufacturing goods has already reached 60% for SADC, she said, showing that similar progress can happen in other regions.
The AfCFTA, claimed Mrs. Songwe, will help African businesses benefit from economies of scale, and create supply chains that will allow the continent to reduce its import bills, especially for industrial inputs. Currently, she added, tariff and non-tariff barriers are major impediments to the development of intra-African trade.
In his keynote address, Paul Kagame, President of Rwanda, insisted on the importance to involve the private sector to ensure the success of the AfCFTA. “Profit and power are not an end in themselves, they are a tool for creating prosperity for every African.”, he claimed, urging Member States to commit themselves to implement other African flagship projects of the Agenda 2063.
The AfCFTA Business Forum, organized by the African Union Commission, focused on the importance of investment and trade for the continent’s economic transformation. Other panelists included Mukhisa Kituyi, Secretary General of UNCTAD, who called African Member States to prioritize collective action for African integration rather than focusing on bilateral free trade agreements outside the continent.
The African Continental Free Trade Area is expected to create a single market between the 55 African countries. With a population of 1.2 billion, which will reach 2.5 billion by 2050, representing 26% of the global working age population, the AfCFTA will be the world’s largest free trade agreement.
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