During the official opening of the 51st African Conference of Ministers responsible for economy development on Monday, Dr. Abiyi Ahmed, the Prime Minister of Ethiopia, said his country will ratify the African Continental Free Trade Area (AfCFTA) deal.
He urged the assembled finance ministers and policy makers to use their ‘collective vision’ to create the right conditions and commit the necessary resources for the creation of the world’s largest trading bloc.
The Prime Minister, who stated that his government is ready to ratify the AfCFTA deal and deposit its instruments to the African Union, said: ‘Let us finance our own development. There are no losers with the AfCFTA. We are all winners.’ He also stated it must create ‘inclusive prosperity’ for all Africans, including marginalized and vulnerable communities.
Discussions on the theme ‘The African Continental Free Trade Area: creating fiscal space for jobs and economic diversification’ addressed specific concerns in relation to falling tax revenues arising from the free movement of goods. According to the ECA, however, the ratio of tax revenue to gross domestic product is already low in African countries.
The ratio for many of them falls below 15 per cent, widely considered the minimum threshold for a state to function efficiently. Philip Lane, Ireland’s Central Bank Governor, drew upon his country’s experience within the European Union trading bloc to explain how such structures can offer economies sustained growth. Addressing the opportunities arising from such a bloc, he remarked: ‘A large export base provides stability, the diversification of markets and economic transformation through free trade.’ The resulting growth in prosperity leads to the tax base broadening, especially for small states whose ‘home market’ grows as cross-border trade expands to embrace other countries.
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The importance of infrastructure and logistics for the AfCFTA was a major focus for the meeting. Vera Songwe, Executive Secretary of the ECA, emphasised the importance of ensuring trading happens in a ‘seamless’ way along the vital road corridors of the continent. She observed: ‘If we provide the infrastructure and border reforms necessary through the AfCFTA we can create jobs and growth.’
Caution, however, was sounded by Prof. Emmanuel Nnadozie, Executive Secretary of the African Capacity Building Foundation, in relation to ensuring nations actually implement the plan. He observed, ‘Capacity is at the centre of the problem’ and recommended that robust institutional arrangements, appropriate regulatory changes and private sector involvement would ensure the AfCFTA is implemented in an expeditious manner.
A highlight of the gathering was the Adebayo Adedeji Lecture given in honour of Prof. Calestous Juma, a renowned supporter of harnessing innovation and technology to advance Africa’s development, who died last month. The lecture was given by Prof. Mary Teuw Niane, Senegal’s Minister of Higher Education, Scientific Research and Innovation.
Her lecture reflected upon envisioning a science, technology and innovation future for Africa. Each year the service of Prof. Adedeji, the longest serving ECA Executive Secretary, is remembered through a lecture given by a prominent individual who has made a special contribution to Africa’s development.