Kudzanai Sharara in CAIRO, Egypt
Aggressive implementation of the Africa Continental Free Trade Area (AfCFTA) is Africa’s recovery tool from the impact of the Covid-19 pandemic and the ongoing conflict in Ukraine, Secretary-General of AfCFTA’s secretariat Wamkele Mene said yesterday (Thursday).
Speaking at the ongoing Afreximbank Annual Meetings (AAM2022) here, Mr Mene said the Covid-19 pandemic and the conflict in Ukraine had impacted African economies in multiple ways highlighting the vulnerabilities of the continent from high dependency on other global countries for trade.
He said the continent’s overreliance on the export of primary commodities and an overreliance on Europe as a primary export market means Africa continues to have a narrow export market base, with a narrow basket of export products to the rest of the world.
“The result is what we are witnessing, a 53 percent reduction in exports to Europe in the year 2020-2021, and a 27 percent increase in the cost of wheat and other cereals.”
Further, amid the impact of the pandemic, the conflict in Ukraine has also triggered an increase in international commodity prices and disrupted supply chains resulting in inflation trending upwards, Mr Mene said.
In addition to high prices and shortages, the pandemic has caused job losses on the continent and reduced Africa’s gross domestic by US$165 billion while it has pushed almost 30 million Africans back into poverty, according to the African Development Bank.
Amid such challenges, which mainly affect the youth, Mr Mene believes with AfCFTA, there is “an opportunity to change the narrative and harness the potential of the youthful population to achieve Africa’s sustainable development”.
“It is time to implement policy and institutional actions that will remove the encumbrances and unlock opportunities for Africa’s youth.”
One such policy or economic tool is aggressive implementation of AfCTA as boosting inter-Africa trade becomes the driver of Africa’s economic recovery year on year, whether talking about the services sector, digital trade or merchandise trade.
According to Mr Mene, through the establishment of continental value chains and supply chain networks facilitated by the rules of the AfCFTA, Africa certainly has the capacity to have an economy that can withstand future crises and external shocks.
However, Mr Mene said implementation of the AfCFTA is not going to be easy.
It will be challenging and it shall require disciplined adherence to the rules decade after decade, he warned.
“We have seen how difficult economic integration is from the experience of the EU”.
Mr Mene, however, quickly pointed out that the alternative of not implementing AfCFTA will mean that the continent will forever languish on the periphery of the global economy and be permanently trapped in a colonial economic model.
The Afreximbank Annual Meetings 2022 were officially opened yesterday (Thursday) by Egyptian President Abdel Fatah El-Sisi.
In his address, President El-Sisi emphasised the extensive work required to realise the goals of the Africa Continental Free Trade Agreement (AfCFTA) and called on African governments to pursue greater integration with their fellow African countries.
He said, “If we would like to change the face of the African continent and make it a continent that is able to achieve the hopes of its people and youth, we need to develop the infrastructure to get us there.
The first challenge of the African continent is to achieve continental infrastructure initiatives.. and huge investment is needed to achieve the goals and ambitions of an integrated Africa.”
In his remarks, Prof. Benedict Okechukwu Oramah, President and Chairman of the Board of Directors of Afreximbank stressed the need for African institutions to do more to strengthen and unify economic development on the continent.
He said, “Afreximbank is a firm believer that Africa can only begin to resolve issues affecting Africa’s trade through aggressive pursuit of intra-African trade promotion and implementation of the African Continental Free Trade Agreement (AfCFTA).”