Continued Research Key As Africa Moves Towards Implementation of Game-Changing AfCFTA

20 October 2020

Addis Ababa — Thorough research and continuous interaction between researchers and policy makers is crucial to ensure the African Continental Free Trade Area (AfCTA) delivers for the continent, in particular consolidating African markets into a single market of more than 1.2 billion people and a GDP of over US$2.5 trillion.

This was said by Stephen Karingi, Director of the Regional Integration and Trade Division of the Economic Commission for Africa (ECA) in a keynote address to the Seventh Common Market for Eastern and Southern Africa (COMESA) Annual Research Forum on the theme; "Harnessing Intra-COMESA Trade through the Interface with the African Continental Free Trade Area (AfCFTA)".

"By investing in capacitating researchers and enabling their interaction with decision-makers, the forum enhances the quality of research outputs. It also facilitates the uptake of research findings and recommendations towards moving forward COMESA's and Africa's integration agenda," said the ECA Director of the forum that seek to strengthen research capacities in the region.

He said the AfCFTA offered tremendous possibilities for businesses across the continent while expanding tax base for governments as a result of expanded or new business opportunities, adding the successful implementation of the pact will also depend in part on Regional Economic Commissions (RECs), both in terms of leveraging RECs achievements and also learning from and avoiding some of the pitfalls and challenges they have faced.

"There is a multiplicity of intervening enabling and impeding factors, including capacity constraints, which would shape and structure the AfCFTA-REC interface. These have the potential to determine the success or failure of these otherwise transformative integrative initiatives. These factors and forces need to be properly analyzed, understood and engaged, including through research and continuous interaction between researchers and policy makers," said Mr. Karingi.

With a membership of 21 states, a population of some 560 million people and a combined GDP of US$769 billion, COMESA is one of Africa's biggest RECs and has made significant progress in many areas of integration.

Intra-COMESA trade growth, however, remains low compared to the region's trade with the rest of the world both in terms of exports and imports.

"It is envisaged that a fully operational AfCFTA would among others, herald greater policy convergence, certainty and predictability; simplify rules across the different African trade regimes; as well as put in place mechanisms that would address the removal of non-tariff barriers and enhance trade facilitation," said Mr. Karingi.

"Importantly also, the larger market space of the AfCFTA would serve as an incentive for investors, as well as facilitate the transfer of technologies, promote industrialization and the enhancement of productivity. The cumulative effects of these, it is hoped, would be the boosting, not only of inter-REC trade, but more importantly, intra-REC trade, including among COMESA member States."

Mr. Karingi said the AfCFTA-COMESA interface, if properly managed, would generate a range of win-win outcomes for various stakeholders in Africa's integration agenda. The agreement provides COMESA countries with opportunities to position and reposition themselves on critical nodes of regional value chains for both goods and services, he said.

According to recent estimates by ECA, by 2040 the AfCFTA could increase the annual value of agricultural and food exports by US$16.8 billion, energy and mining exports by US$9 billion, and industrial exports by US$43.3 billion.

Largest percentage increases, that is over 25% in intra-African exports for industrial sectors are found in textile, wearing apparel, leather, wood and paper, vehicle and transport, agro-foods such milk and dairy products, sugar, beverages, vegetables, fruit, nuts and rice.

For her part, COMESA Secretary General, Chileshe Kapwepwe, said the theme of the forum could not have come at a better time when there is renewed impetus for shaping the African political, economic and social development.

"Indeed, the ACFTA is the strategic framework for delivering on Africa's goal for consolidating a single market, fostering structural transformation, and attaining inclusive economic growth and sustainable development," she said.

Ms. Kapwepwe said the capacity building interventions in research and training carried out by COMESA were aimed at enhancing not only the capacity of the COMESA Secretariat but also the capacity of the Member States in economic and trade policy analysis and research, as well as trade negotiations.

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