Africa Trade Forum: States encourage to boost intra-African trade
Stakeholders attending the second Africa Trade Forum from 24-26 September concluded their deliberations with proposals on the way forward for Regional Economic Communities and member states engaged in shaping the establishment of the Continental Free Trade Area (CFTA). The forum was held on the theme: Boosting intra-African trade and establishing the Continental Free Trade Area (CFTA). The recommendations are aimed at the October joint meeting of Ministers of Trade and Ministers of Agriculture, on boosting intra-African trade, agricultural transformation and ensuring food and nutrition security.
The Forum, which kicked off Monday sought to build on the current political expression of support for the continental trade agenda as agreed by two Summits of Heads of State and Government held this year on the same theme. The stakeholders represented a broad base of actors in academia, business, policy-makers, finance, non-governmental organizations, as well as the media.
Their presence at ATF2012 contributed to the “kind of mobilization needed towards the achievement of this vision,” according to Alan Kyerematen, Head of the Africa Trade Centre. They concluded with recommendations aimed at addressing some major impediments to boosting intra-African trade in the areas of investment finance; enhancing productive capacity and improving industrial performance; enhancing trade facilitation; infrastructure for trade and the establishment of
the Continental Free Trade Area (CFTA).
Earlier in the week, Mr. Stephen Karingi, Director, Regional Integration and Trade Division at the ECA had underscored that doing well in trade facilitation, on top of removing existing trade barriers and tariffs, formal intra-African trade would increase from 11% to around 22% according to studies by the ECA.
In this regard, participants agreed on the need to simplify trade regimes to facilitate cross-border trade undertaken by SMEs, and the establishment of projects to support the private sector in improving supply chain efficiency. In addition, member states were urged to enhance the “corridor approach to integrated regional transport” and in this regard, aim to match developments in ports, such as establishing links to road and rail. They further called on member states to enhance border efficiency and trade-related processes, through the use of national and regional single window systems, as well as One-Stop-Border-Posts, such as the one at the Zambia-Zimbabwe Chirundu border.
In the area of infrastructure for trade, member states were urged to allocate 1% of their GDP to fund national infrastructure projects, including rural infrastructure. “At the continental level, an African infrastructure fund would need to be established as a special purpose vehicle co-guaranteed by member states,” said participants.
Further, governments were urged to engage all major stakeholders in infrastructure development, including but not limited to public private partnerships. Other related calls included implementing integrated energy infrastructure projects, deepening telecommunications infrastructure and honoring obligations to the Programme for Infrastructure Development in Africa (PIDA).
With respect to the establishment of the Continental Free Trade Area, participants agreed that although the CFTA agenda is government driven, it would require the participation of civil society actors, private sector, parliamentarians and development partners. As part of their commitment to promoting the trade and development agenda, journalists attending the Forum committed to forming a network they named, Journalists for Trade and Development in Africa (J-Trade Africa).
The need for a cost-benefit analysis was requested of ECA and its partners, AUC and AfDB, as an “important component to promoting the CFTA, in particular among countries that have expressed concerns regarding loss of revenue.” Further, the need for the engagement of the RECs in the CFTA negotiations was emphasized, as well as the importance of underpinning the CFTA on the principle of variable geometry.
Among other issues, participants urged member states to identify specific strategic sectors to promote value chains and productive linkages and introduce requisite legal and regulatory frameworks to support value chain development. In addition, countries were urged to establish a comprehensive industrial policy that includes industrial performance.
On promoting trade and investment finance, the need for SME banks was emphasized; while AfDB, Afreximbank and Africa Trade Insurance were urged to establish a consortium program to deliver an integrated trade finance program around performance-based industry development, export development and SME development programs.
Mr. Karingi expressed ECA’s commitment to moving the CFTA agenda forward in collaboration with partners.
For her part, Ms. Treasure Maphanga, AUC’s Director for Trade and Industry expressed her appreciation for the involvement of the private sector through the Pan African Chamber of Commerce and Industry and said the AUC would seek to translate the ATF decisions at the Joint Conference of Ministers of Trade and Ministers of Agriculture in October 2012.