Asmara — The implementation of the African Continental Free Trade Area (AfCFTA) could result in welfare gains amounting to USD 1.8 billion and create two million jobs for Eastern Africa, a region that requires an additional 8.5 million jobs for new job entrants annually, Economic Commission for Africa's (ECA) Executive Secretary, Vera Songwe, said Tuesday.
In remarks to the 23rd Meeting of the Intergovernmental Committee of Senior Officals and Experts of Eastern Africa (ICSOE) in Asmara, Eritrea, Ms. Songwe said the AfCFTA was the investment programme for Africa.
"By signing the AfCFTA, African countries and African leaders came together to give and offer this region and the rest of Africa a blueprint for growth. The AfCFTA is not just another trade agreement, it is essentially the investment programme for Africa; it is the investment programme for job creation and regional integration and how as a continent we can collectively realise the dream of a prosperous Africa," she said.
Ms. Songwe continued: "Africa does not need a marshall plan, it has the AfCFTA. It has a more powerful instrument to use to accelerate regional and economic integration."
Many of the new employment opportunities created by the AfCFTA are likely to be in sectors where there is a heavy predominance of female labour thereby contributing to the economic empowerment of women in the region.
Crucially, Ms. Songwe said, the AfCFTA will accelerate industrialisation in the region as manufacturing will be among the principal beneficiaries from increased intra-regional trade and investment.
She said Africa cannot realise the benefits of the AfCFTA without peace which she said leads to investment, job creation and prosperity. Ms. Songwe also hailed Eritrea for forging ahead in a new era of peace.
"The value of the AfCFTA is not just that we have manufacturing in one country but it's that we build the supply chain across the sub-region. That it why when we talk about the AfCFTA we also talk about free movement of goods and people," the ECA Chief said.
Ms. Songwe said the full realisation of the potential benefits of the AfCFTA would require speedy ratification and effective implementation of the agreement, along with a range of supporting policies to address barriers to trade, investment and industrialisation.
A good illustration of the AfCFTA potential, she said, comes from the healthcare sector which is projected to be worth USD 259 billion in 2030.
"If we single out the pharmaceuticals sub-sector alone, today Africa manufactures less than two percent of medicines it consumes while it imports about 70 percent of its needs from outside the continent at an annual cost of $14.5 billion. The promise of the AfCFTA is that we can produce the drugs ourselves and market them; develop supply chains that can create these manufacturing companies that can in turn create jobs," said Ms. Songwe.
For her part, the UN Resident Coordinator for Eritrea, Susan Namondo Ngongi, applauded the fact that Eritrea was 'sending the message that she is engaged and open for business' allowing more and more people to appreciate that Asmara has the assets necessary to play its part in convening some of the world's international conversations and share its efforts aimed at sustainable development.
"Through my interactions with the government of the State of Eritrea, I know that all these themes (regional trade, job creation, boosting regional tourism, investing in energy, infrastructure and blue economy) are both relevant and prescient for a country that is set on forging a way ahead in a new era of peace. In addition, Eritrea has strongly signaled its interest in regional cooperation and economic integration. We in the UN family are keen to accompany, as best as we can, the efforts and needs of this new Eritrea and are excited that this conference is taking place here at this time," said Ms. Ngongi.
The meeting, which is being held under the theme; Leveraging New Opportunities for Regional Integration in Eastern Africa, follows hard-on-the-heels of a high-level joint AU-UN mission to Eritrea that was led by the UN Deputy Secretary General, Ms.Amina Mohammed, and the Khartoum process.