Boosting intra-Africa trade is the most effective way to bring economic growth and development to the continent, says African Union Commission Deputy Chairperson, Ambassador Kwesi Quartey.
In a speech at the 51st session of the Conference of African Ministers of Finance, Planning and Economic Development in Addis Ababa, Ambassador Quartey said Africa’s ability to trade with itself, as well as with the rest of the world, will be an absolute game changer.
Commenting on the recent signing of the African Continental Free Trade Area Agreement (AFcfta), which he said was a truly historic development, the AU Deputy Chief said the potential for intra-African trade to drive value creation and development was both palpable and real.
“But in order to trade, Africa first has to produce. And not just primary commodities. We must begin to apply science and technology to production. Statistical evidence has demonstrated that intra-African trade has tended to be mainly in processed foods, that is, goods and commodities to which value has been added,” he said.
Mr. Quartey said Africa’s ability to trade and do business with itself is what will drive the African Continental Free Trade Area.
“The potential of Africa’s integration and intra-Africa trade are enormous if we are able to take advantage of the economies of scale, creation of job opportunities and generation of income, mobility of investment capital and exploring our consumer market of nearly one billion people,” he said.
“Whilst the benefits are clear and widely acknowledged, there is also the underlying need to review the strategies to drive intra-Africa trade and integration agenda and whose successes, would reinforce Africa’s place in the global economy and strengthen our bargaining power in international negotiations.”
Ambassador Quartey said as the rest of the world became increasingly fractured, Africa must advance its integration agenda and move from 55 fragmented markets into a larger market with the prospects of a combined GDP of over three trillion dollars annually.
The AfCFTA is expected to boost consumer spending to about US$1.4 trillion in 2020 and increase intra-African trade by as much as US$35 billion per year, or 52 percent above the baseline by 2022.
He said Africa must scale-up its infrastructure investments to improve connections between and within African countries; make trade more conducive through the elimination of trade non-tariff barriers such as the restrictive travel policies and visa regimes; harmonize trade policies; increase manufacturing and processing capacity; enhance linkages for rural communities to urban markets and vice versa; focus on capacity development to be able to participate in the knowledge economy, and be ready for the digital economy.
“We cannot afford to be illiterate or innumerate,” said Mr. Quartey, adding nations should address the governance, democracy and impunity deficits by empowering institutions to perform better.
“We must focus like a laser on human capacity development. Let us make deliberate efforts to educate and develop the skills and talents of our youth and children. Without a numerate and literate youth, we shall continue to bear the brunt of our demographic vulnerabilities. With education and training, our youth will develop human capital, that is, value which creates more value.”
Mr. Quartey said for Africa to realize its goals, nations must seek to improve their domestic resource mobilization.
He also spoke about AU reforms saying 22 member states were at various stages of actualizing the decision on financing the Union, while 12 states were collecting funds levied from imposing the 0.2% levy on eligible imported goods.
He encouraged more states to implement the decision for the AU to be self-reliant and to ensure predictable funding of AU activities and projects.