Addis Ababa — At the PTA Bank's 29th Annual General Meeting in Addis Ababa, the Deputy Executive Secretary of the Economic Commission for Africa, Abdalla Hamdok said the share of intra-African trade "could more than double within the next 10 years if the Continental Free Trade Area is implemented by 2017, along with improvement of customs procedures, port handling and inland transport."
Speaking at a roundtable on priorities and interventions to accelerate intra-regional trade and infrastructure in the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Southern Africa Development Community (SADC), Mr. Hamdok said that combined, the 26 countries that comprise this Tripartite area have a population of 527 million and a Gross Domestic Product (GDP) of USD 624 billion.
"Together, they contribute to nearly 60% of the GDP of all African Union member States," stated Hamdok, referencing the latest ECA's joint publication on Assessing Regional Integration in Africa.
He reflected on a number of challenges faced by the three Regional Economic Communities, stating that trade between the Tripartite and the rest of Africa is incredibly marginal.
"The Tripartite area mainly exports to and imports from outside the African continent, with the European Union being the Tripartite's main trading partner, followed by the United States and emerging economies (such as the BRICS)," he said.
He added that the Tripartite faces tariff barriers within itself and when exporting to the rest of Africa. "This is so, especially in agriculture and food as well as in some industrial sectors," he said; and stressed that the establishment of an effective CFTA would contribute to removing such existing barriers.
He presented a number of policy options following the formation of a Tripartite Free Trade Area and urged the adoption of trade facilitation measures, in addition to the Tripartite FTA and CFTA reforms.
These, he said, "would be critical to ensure large benefits in terms of both real income and trade to all tripartite countries as well as for boosting intra-Tripartite trade and its industrialization."
In addition a full elimination of tariff barriers on goods within Africa accompanied by procedures to ease trade across borders would offer new market opportunities as the tripartite exports towards other African partners would substantially increase. "Most of this additional trade creation would take place in industrial sectors," he said.
He called for policy measures to accelerate infrastructure development in the Tripartite Region, such as mobilization of resources, especially domestic resources; encouraging Foreign Direct Investment (FDI) from emerging economies; accelerate institutional and governance reform; and promoting a regional approach to infrastructure development.
"By pooling their resources and exploiting their comparative advantages, African countries can devise common solutions and use resources more efficiently to achieve better outcomes," said the Deputy Executive Secretary.
The three Regional Economic Communities have committed to establishing a Tripartite Free Trade Area (TFTA) by 2014. This commitment is bolstered by the African Heads of State and Government of the African Union Action Plan to boost intra-African trade and establish a Continental Free Trade Area (CFTA) by 2017.
The meeting was attended by Ethiopia's Minister of Finance and Economic Development, Mr. Suffian Ahmed, Zambia's Minister of Finance, and the Chairperson of PTA Bank of Governors, Mr. Alexander Chikwanda, among others.
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