Finance ministers and policy makers from across the continent have reaffirmed their commitment to the African Consolidated Free Trade Area (AfCFTA) at the close of a high-level meeting widely praised for discussing real issues affecting the continent. The event, hosted by the UN Economic Commission for Africa (ECA) in Addis Ababa, Ethiopia, called for governments to ensure they make the policies and investments necessary to capture the economic benefits of the proposed trading bloc.
A ministerial statement from the 51st session of the Council of Ministers recognised the potential of the AfCTA to advance industrialisation, economic diversification and development to foster prosperity for all on the continent. It also, however, recognised the challenges including concerns over the impact upon the tax base arising from a single continental market for goods and services, reporting: “The short-term impact is likely to be minimal and will be outweighed in the medium and long term by the positive impacts of revenue from other sources of taxes.”
These new sources would arise from economic growth and diversification from trading in a bloc of 1.2bn consumers.
The summary also acknowledged the need for the bloc to advance trade facilitation measures. These include simplified trade regimes for informal cross-border traders and upgrading trans-boundary infrastructure to assist firms keen to penetrate the new markets opened up by the agreement. The private sector was recognised as playing the central role in achieving this project to create a more empowered, inclusive and transformed continent. It would also be essential for businesses to partner with governments to develop innovative financing solutions to tackle health, education, infrastructure and environmental challenges that could hold back Africa from effectively operating and benefitting from the bold economic plan.
The statement came after four days of dialogue and robust exchange on the theme ‘African Continental Free Trade Area: Creating fiscal space for jobs and economic diversification’ that addressed key issues for the continent including agriculture’s role in economic growth; financing infrastructure; tackling illicit financial flows; and an integrated strategy for the Sahel.
The theme of the meeting was considered highly relevant by the participants who commended the organisers for focussing on real African issues.
Dr Robert Nantchouang, Senior Knowledge Management Expert from the African Capacity Building Foundation, said the meeting successfully highlighted pressing issues related to the economic integration agenda.
“It was a timely and opportune moment for African countries to gather around a common issue that was embraced by all participants. Nobody was left behind in this discussion,” said Nantchouang.
Vera Songwe, ECA Executive Secretary, reaffirmed the commitment of her organisation to support governments moving towards economic integration through its convening, thought process and operational functions. The meeting recognised the preeminent role of human and institutional capacity building that would enable the AfCFTA to meet many of the continent’s development needs. She commented: ‘Africa is waiting. Our challenges are huge but we are on the way to solving them through the AfCFTA.’
The meeting forms part of wider consultations on the historic deal that was signed by 44 presidents and government leaders in Kigali (Rwanda) in March 2018. Countries will now be required to ratify and implement the legal instruments of the agreement that would create a trade bloc with a combined gross domestic product of more than $3 trillion together with an additional 300 000 direct and 2 million indirect jobs according to the African Union.