Africa possesses a more powerful tool in the African Continental Free Trade Area (AfCFTA) for accelerating regional and economic integration, the UN Economic Commission for Africa (ECA) has said.
The Executive Secretary of the United Nations body, Ms Vera Songwe, stated this on Tuesday in a virtual panel discussion to mark the inaugural Africa Integration Day set aside by the African Union to mark the implementation of AfCFTA.
According to Songwe, Africa does not need a Marshall Plan to ride out the ongoing COVID-19 crisis.
Integration, she said, was key for Africa’s growth and attainment of Agenda 2030 for sustainable development and the continent’s development aspirations as contained in Agenda 2063.
“We need to talk about Africa and the AfCFTA. Our Marshall Plan is the AfCFTA. The AfCFTA is our plan, so let us take it and run with it,” she said.
Songwe said with the AfCFTA, Africa had collectively penned its own blueprint for growth.
“The Marshall Plan for Europe was about 160 per cent of their GDP traded to bring back growth after the war.
She added that the ECA had estimated that economic growth in Africa in 2020 would drop from 3.2 percent to -2.8 percent to about zero percent growth as a result of COVID-19.
According to her, this situation is disastrous.
“COVID came and has taken us quite far behind because we need to reassess where is it that we want to go and how we want to go.
” We definitely need to do things differently,” she said.
The Executive Secretary added that it was crucial for Africa to integrate its financial systems to create a mutualised system of financial stability that works for the continent or regional monetary cooperation as in East Asia.
“The Afreximbank Exchange Facility is an excellent step in the right direction. But more is needed to integrate our economies and financial sectors,” she said.
” When there is a crisis, we come together and we pool and mutualise our resources so that those who are the most hit get some resources.
“So, we do not need to go the long distance of common currency to get a mutualised system of financial stability that works for the continent.
“We need to ensure that as we build the AfCFTA and trade integration, we begin to build stronger, much more robust monetary and fiscal systems that can ensure that as a continent we actually can work with each other in a more effective way,”Songwe said.
She shared with the panel what the ECA had been doing since the crisis began in helping African nations, the private sector and civil society to understand and draw strategies to contain the pandemic as well as prepare for the future.
Songwe said COVID-19 had given Africa an opportunity to assess its weak health delivery systems with countries like South Africa, Ethiopia and Morocco among others building new health infrastructure.
“Africa must produce internally. The continent imports $14.7 billion worth of drugs, over 95 percent of its demand.
“Countries like Egypt, Kenya, South Africa, Ethiopia and Cameroon can produce drugs for the continent.
“What needs to be worked on are Intellectual Property Rights issues,” she said.
The News Agency of Nigeria reports that Songwe was joined on the panel by Mr Mukhisa Kituyi, Secretary-General of UNCTAD and Mr Benedict Okey Oramah, the President of the African Export-Import Bank (Afreximbank).
Others were Mr Wamkele Mene, first Secretary-General of the AfCFTA; Mr Chileshe Mpundu Kapwepwe, Secretary-General COMESA; and Mrccy Paolo Gomes of AfroChampions.
The panelists agreed that AfCFTA was the best stimulus for Africa to come out of the COVID-19 pandemic.
They also agreed the crisis was a great opportunity the continent should not waste, using lessons learned for Africa’s industrial development by producing its own drugs and saving billions of dollars in the process.
They further agreed that digital inclusion was paramount in addition to working closer together as one united continent with the private sector.
Edited By: Kamal Tayo Oropo/Mufutau Ojo) (NAN)
Stakeholders task African continent on institutionalising financing of AFCFTA
Stakeholders have tasked African continent on the need to put in place institutional and policy mechanisms for the provision of finance for the implementation of Africa Continental Free Trade Agreement (AFCFTA).
The News Agency of Nigeria reports that they disclosed this at a webinar on Tuesday, organised by Conversation with Africa.
The online meeting was entitled: ‘Financing Implementation of the African Continental Free Trade Agreement at both Individual and Continental levels.’
In his address, Dr Thapelo Matsheka, Minister of Finance and Economic Development, Botswana and guest of honour at the event underscoref the need to rub minds towards economic freedom.
Matsheka stated that a major policy shift will be required to be developed by member states individually and collectively to give effect to the new economic dispensation.
“African continent will need to put in place institutional and policy mechanisms for the provision of finance to provide structure; short, medium and long term finance to support trading activities.
“It is therefore necessary to explore the appropriate institutional mechanism through which risks in international trade financing can be managed and mitigated to allow enhanced flow of finance.
“The private financial community will have to play a more aggressive and proactive role in laying down financial facilities for the regional international trading community.
“It is therefore a call upon the commercial trade investment financing houses to step forward and formulate innovative strategies to meet this demand in Africa,”he said.
Also, Chief Sola Abodunrin, the President, Ibadan Chamber of Commerce and Industry and a panelist at the event emphasized the need for full implementation which he said would increase inter African trade by 52 per cent.
Abodunrin stated that financing for AFCFTA should come from the political will of member states and in collaboration with African Development Bank and other international financial organisations.
“There are a lot of prospects if pension schemes, sovereign wealth funds and insurance funds can be harnessed.
“Most of these funds are invested in Europe and it has to be re-mobilised back to Africa to develop the infrastructure gap that is in Africa.
“It was estimated that Africa has $108billion infrastructural gaps. These funds will help to facilitate trading activities by building rails and roads that will inter cross Africa and make transportation of humans and goods easy,”he said.
Other panelists, Mr Kiprono Kittony, the Vice Chairman Africa, International Chamber of Commerce and Mr Gobusamang Keebine, President Business Botswana, reiterated the need for full implementation of AFCFTA, adding that implementation is always the challenge for any project.
Kittony said: “The financing for AFCFTA can be sought through the capital markets which are very effective ways to galvanise capital and raise money to achieve any long term project.
“Development banks are another option and government funding.
“It is important that African countries should try to prioritise within their budget funding to allow for effective implementation of AFCFTA.”
Edited By: Remi Koleoso/Kayode Olaitan (NAN)
AfCFTA: Feedback expected from Heads of State on feasibility of July 1 take-off — Sec. Gen
Mr Wamkele Mene, Secretary General, Africa Continental Free Trade Area (AfCFTA) Secretariat, says a recommendation has been sent to African Heads of States on the feasibility of sticking to the July 1 take off date of trading among countries under the agreement.
He said that the feedback from the Heads of State was being awaited.
The News Agency of Nigeria reports that Nigeria is among the African countries that have endorsed AfCFTA which aims to redefine trade relations within African states and beyond.
It proposed creating a single market for goods and services, with free movement of people and investments across 54 countries.
The agreement also has a dispute settlement mechanism similar to the one set up by the World Trade Organisation (WTO).
Mene said a recommendation had been made to African leaders on the implementation of the agreement, following the ongoing Coronavirus pandemic that had forced many countries to shut their borders.
He said: “Trading is supposed to begin on July 1 and 28 countries have already ratified the agreement to be bound with the legal obligations out of the 54 countries that signalled their intention.
” However, due to the COVID-19 pandemic, 42 countries in Africa are under border closure or partial lockdown.
“The governments are focused on saving lives and businesses, which makes a lot of sense.
” We have sent a recommendation to the Heads of States on the feasibility of sticking to the July 1 take off date and we are waiting for them to give us feedback.”
The secretary general maintained that proper implementation of AfCFTA would help Africa mitigate the economic impact of the COVID-19 pandemic, as it would lead to mutually beneficial investments and job opportunities.
According to him, Africa has a market of 1.2 billion people; it has a combined Gross Domestic Product of $2.5 trillion, and about 400 continental companies that earn annual revenues of $1 billion or more.
He said: “Through the AfCFTA, we have an opportunity to reconfigure our supply chains, to reduce reliance on others and to expedite the establishment of regional value chains that will boost intra-Africa trade.
“AfCFTA is an opportunity to confront the significant trade and economic development challenges of our time, including market fragmentation smallness of national economies; over-reliance on the export of primary commodities and narrow export base.
“This is caused by shallow manufacturing capacity; lack of export specialisation; under-developed industrial regional value chains; and high regulatory and tariff barriers to intra-Africa trade amongst others.
“The result of all of this, is a very low percentage of intra-Africa trade of 18 per cent,” he said.
Mene said AfCFTA had the potential to be a catalyst for industrial development, placing Africa on a path to exporting value-added products, improving Africa’s competitiveness both in its own markets and globally.
He maintained that AfCFTA should not be perceived to be benefiting only a handful of relatively industrialised countries in Africa but all African businesses.
Edited By: Chioma Ugboma/Oluwole Sogunle (NAN)
ECOWAS will focus on regional integration programmes in 2020 – Official
The ECOWAS Commission says its focus in 2020 will be on the implementation of regional integration programmes and monetary policies.
Dr Aderemi Ajibewa, the commission’s Director of Political Affairs said this in an interview with the Nigeria News Agency on Friday in Abuja.
He noted that focus on the implementation of the regional integration programmes and policies were in furtherance of the directives of the Authority of ECOWAS Heads of State and governments.
Ajibewa said that the authority had at its 56th Ordinary Session held in Abuja on Dec. 21, instructed the commission to implement the policies.
According to him, the attention will be on the implementation of sociopolitical, economic, monetary, and humanitarian policies as well as programmes aimed at promoting the free movement of goods and services through the African Continental Free Trade Area (AFCFTA), energy and infrastructure, among others.
“With respect to what ECOWAS will be doing in 2020, the Communiqué of Dec. 21 in Abuja has been given a backing to that.
“So, it can be looked at from the sociopolitical, economic, monetary as well as the humanitarian dimension.
“On the respect to the issue of the implementation of the regional integration programmes, these would be implemented in 2020 against the backdrop that the macroeconomic environment in member states would be structured along the transformation of their economies, to facilitate achievements of a monetary union by 2020.
“Also, on the creation of the monetary union, it also seem that efforts have been made by Member states in 2020, as directed by the heads of state,” Ajibewa said.
He said that the proposed symbol of ECOWAS on the single currency, Eco, would be adopted and not only that, it would also be seen to align with the Central Bank of West Africa.
“So, regarding the single currency, we have all listened to the various issues going on UEOMA, Authority of Heads of State and Government, and within the ECOWAS , and both organisations would work together to facilitate its integration into the ECOWAS Monetary zone, that is ECO.
“Some areas are still lingering over there, and that would be resolved so that a single common offer could be sent to the African Union Commission,” Ajibewa said.
He noted that this has also helped in arriving at a common position on the schedule of specific commitments in this area, and this would be further intensified in 2020.
With respect to the energy and infrastructural development, Ajibewa said that ECOWAS would also intensify its commitments with member states in 2020.
Ajibewa said that collaboration with member states to step up on implementation of the regional structured projects, would help in opening up some countries and ensuring seamless intra-community trade, and enhance security.
Edited by: Folorunso Poroye/Emmanuel Yashim
Buhari inaugurates AfCFTA Action Committee, says Africa’s socio-economic integration must be rule-based
Nigeria’s position in the African Continental Free Trade Area (AfCFTA) remains that African economic and social integration must be rules-based and with built-in safeguards against injurious practices, says President Muhammadu Buhari.
President Buhari stated this on Friday in Abuja, when he inaugurated members of the National Action Committee for the Implementation of the AfCFTA Agreements.
Nigeria News Agency reports that the AfCFTA is an important part of the African Union- 2063 Agenda to promote economic and social integration on the continent.
Buhari said the mandate of the members is to support the efforts of Ministries, Departments and Agencies (MDAs) of government, stakeholder associations and businesses to realize the benefits of AfCFTA, while putting measures to address any threat (to Nigeria’s national interest) that may arise.
He, therefore, maintained that all parties must work together and not allow any loopholes that might prove injurious to the Nigerian economy.
Buhari said: “”We are very hopeful of creating a single African market for ‘Made -in- Africa’ goods and services.
“”This trade, together with free movement of people and capital, will result in faster integration of African economies.
““As a government, we must ensure that Nigeria’s position remains that, such integration must be rules-based with built-in safeguards, against injurious practices.’’
The President added that Nigeria’s approach to the AfCFTA has been very measured and consistent.
“”Our logic was simple: As Africa’s largest economy and most populous nation, we cannot afford to get it wrong.
“”We consulted all key stakeholders. We also conducted a rigorous impact and readiness evaluation.
““It was after these consultations and studies, and satisfactory reports that I signed the AfCFTA Agreement on behalf of Nigeria in July this year.
““We know the benefits and understand the challenges.
“It is clear that, for us to fully benefit from this agreement, we must have an implementation programme that reflects our national trade objectives and development plans.
““This therefore requires aligning, restructuring existing development projects, programme and initiatives. Where there are gaps, we must address them,’’ he said.
The President explained that, already, the government had established the National Action Committee on AfCFTA.
He also disclosed that he had directed all key ministers and senior government officials to provide maximum support to the Committee.
““For us as a government, our expectations from this agreement include job creation for our youths, increased production of our local raw materials and ultimately, exporting quality ‘Made-in-Africa goods’.
“”You are to submit quarterly reports on your progress, and I look forward to receiving your first report in March 2020,’’ Buhari reminded members of the committee.
Earlier in his remarks, the Minister of Industry, Trade and Investment, Otunba Adeniyi Adebayo explained that AfCFTA was being negotiated in two phases.
He said the Phase I agreement comprises of the framework agreement; the protocols for trade in goods and trade in services; and the mechanism for dispute resolution.
“NAN reports that the Phase I agreement came into force on May 30, 2019 , one month after the 22nd African country ratified the agreement.
“”Although, the main Phase agreement has been completed, negotiations are continuing on the annexures and appendices.
“”Notable items being negotiated include among others, the schedule concessions for Goods and Services and the product specific Rules of Origin for the remaining 12 per cent of tariff lines.
““It is estimated that the Schedule of Concessions will become effective in July 2020,’’ Adebayo said.
The minister also revealed that the Phase II negotiations would start in Jan. 2020 and would focus on investment; competition policy; and intellectual property rights.
According to Adebayo, in the preparations and actual negotiations, the relevant entities of government are involved.
He said stakeholders are also consulted and allowed to participate in the negotiations as observers.
“”Nigeria undertook an extensive nationwide stakeholder consultation and rigorous technical studies prior to signing on to the AFCFTA agreement on July 7, 2019.
““From the stakeholder engagements and technical studies, we established that the AfCFTA can facilitate economic growth and diversification through preferential access to Africa’s market.
“”We also established that, in order to get the full benefits of the Agreement, Nigeria needs to: Increase her production and service capacities; and Implement adjustment measures, such as retooling and upscaling of existing businesses.
The Minister said that the mandate of the National Action Committee includes: Conclusion of a common undifferentiated ECOWAS schedule of concessions for trade in goods and trade in services for AFCFTA and Common External Tariff (CET) negotiations.
Also, NAC is mandated to Championing programmes to resolve the critical continental level challenges such as smuggling and abuse of rules of origin, production capacity constraints as well as border and trade rules enforcement.
Edited by: Kamal Tayo Oropo/ Sadiya Hamza