2 November 2017

Africa: What Africa Needs - Roads and Bridges, Cooking Oil and Cement

Photo: Nation Media Group
Port of Dar es Salaam.

Addis Ababa — Roads and railways, bridges and harbours - that's what we need to invest in if we are to grow Africa's economies and provide jobs for the millions of young people who want to become part of the continent's growth.

That - and the need for trade among African countries in goods ranging from cooking oil to cement - is the message coming from a major conference in Addis Ababa.

The executive secretary of the United Nations Economic Commission for Africa, Vera Sogwe, told delegates at the conference that "overcoming infrastructure gaps remains critical if the continent is to unlock its economic potential".

The gathering opens UNECA's Tenth Session of the Committee on Regional Cooperation and Integration.  Its theme is "Implementation of the Continental Free Trade Area and Shared Gains", and it brings together scores of delegates from various spheres - including representatives of governments, civil society and NGOs.

This year's session, Songwe said, builds on the history of supporting Africa's regional integration agenda since the first meeting in 1999. "The tenth session therefore meets at a time of considerable relevance for further deepening existing regional processes on the continent".

She reminded the audience that they would be considering a report which presents the "ECA's articulations" of Africa's structural transformation "through inclusive economic growth and sustainable industrialization".

She said there was a consensus that "quality economic infrastructure in Africa is a catalyst to its industrial development". This, she said, was exemplified by current efforts that focus on scaling up infrastructure facilities at national and regional levels.

"Implementation of initiatives for promoting regional investments... as well as the Continental Free Trade Area need to be supported by all member states to achieve the free movement of goods, services, capital and labor that create a veritable continental market," Sogwe added.

At its 18th ordinary session held in 2012, the African Union adopted a decision to establish the CFTA, which among other things aims to create a single continental market for goods and services; and also to expand intra-African trade "through better harmonization and coordination".

"When we trade among ourselves – although that trade volume is low – but 46% percent [of that low volume of trade] is value added product," David Luke said to allAfrica on the sidelines of the meetings. He's ECA's African Trade Policy Center Coordinator.

"We are talking here about cooking oil, cosmetic products, gasoline, cement," he said.

Luke said "more jobs, investments and technological adaptation" come with value addition. "But when we trade with external partners, 80 percent of what we send is just basic commodity; no processing."

He said in order to boost intra-African trade, tariffs needed to be brought down. The average tariff within Africa is eight percent, he said; whereas with "our external partners, it's two percent". A speaker noted that he spent about U.S.$700 to ship a container to China, but ten times that amount to ship the same good from Addis to Nairobi.

Another speaker at the opening session, Ethiopia's Foreign Minister Bekele Bulado, said it was prudent that the CFTA negotiations take into account the different levels of development: "The modality should also accommodate the Least Developed Countries, landlocked, small islands and
vulnerable economies with regard to improving their productive capacity."

Bulado said closer integration with African states has been a long-standing objective of Ethiopia. "We firmly believe that strengthening our trade relations among African nations from the current
lowest level compared to the other regions in the world, through the implementation of Continental FTA, is very important."

The committee, which meets on a biennial basis, reviews the work undertaken by the ECA on regional integration and trade. Organizers say this year's session, which will last until the 2nd of November, provides a platform for member states to deliberate on issues affecting the continent, "including ways and means of promoting and accelerating the CFTA".

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