Africa’s trade needs to expand for deeper regional integration – ECA

 

The Economic Commission for Africa (ECA) has restated the need for African countries to expand their trade for deeper regional integration.

ECA’s Director of Regional Integration and Trade Division, Mr Stephen Karingi, made the declaration in Addis Ababa on Monday.

He was speaking with the ECA’s communication team on the side-lines of the 55th session of the ECA.

Karingi noted that Asia, Europe, and Latin America deepened their regional integration through trade expansion; hence, Africa should take a queue and do same.

“Collective efforts are required from all member states, regional economic communities, key partners and stakeholders to realise the economic benefits of integration and the African Continental Free Trade Area (AfCFTA),’’ he said.

He added that the AfCFTA was working at tackling this by encouraging countries to remove tariff barriers, which were a major constraint to intra-African trade.

He noted also that connectivity was still making business on the continent very expensive, adding that producing similar products was not an issue in cross-country trade as African consumers liked variety.

“It is about the standards, tariffs and cost of moving goods. Currently, traders in most countries do not have regional value chains and supply chains.

“A regional supply chain needs financing. But if you do not have the money, people will start demanding and sourcing the goods from elsewhere.

“Consumers want to see the product they prefer all the time. This has to do with production and ability to supply it all the time,’’ he said.

The director called on institutions, partners and governments to work together to develop strategies needed to implement the AfCTA.

“Member states will need to address integration challenges, which include inadequate financial resources; poor infrastructure networks; increasing violence, terrorism and political instability.

“Furthermore, the integration agenda is experiencing slow implementation of policies and agreements.

“For instance, the Protocol on the Free Movement of Persons, Right of Residence and Right of Establishment needs ratification because it is the bedrock of deepening integration.

“It interacts with the ability to move goods and services and help to optimise the AfCFTA,’’ Karingi stressed.

He noted that countries with enough financial resources could finance their strategies through their budgets.

“But if they do not have the resources, they need to engage partners and the private sector for financial support.

“The ECA will help countries to identify which part they can trade and source for finances needed to implement their strategies,’’ he said.

He assured that the ECA had other forms of support for member states in the formulation and implementation of economic policies and enhancement of macroeconomic integration,

“ECA has developed a prototype macroeconomic model and provided support and training in 15 countries.

“On the fiscal side, ECA supported taxation policy reform and revenue collection in Ethiopia, Kenya, Tanzania and Zambia.

“We plan to have a peer learning group on the AfCFTA strategies to help countries learn from those that have developed their strategies and how they use their experience,’’ Karingi said.