Wamkele Mene, Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat, says Africa is poised to develop a harmonized market space to promote the development of regional value chains that will be linked competitively to global value chains.
He said AfCFTA was in this respect expected to promote the development of manufacturing and agro-processing across Africa, and with them, accelerated economic diversification and competitiveness.
Mr. Mene was speaking at the ongoing Antalya Diplomacy Forum in Turkey on the theme: “A vision for development in Africa”.
The forum sought to stimulate discussions on continental development efforts and beyond Africa with emphasis on AfCFTA.
The Secretary-General said against a global backdrop of changing political and economic priorities, including the impact of the Covid-19 pandemic, Africa was charting a new course for its industrialisation and economic development, using the momentum of continental and regional integration.
He said Africa’s vision for development to build an integrated, peaceful and prosperous Africa, driven by its own citizens and representing a dynamic force in the international arena, was embedded in the AU’s Agenda 2063.
The AfCFTA, which was established in March 2018, is one of the flagship projects of the implementation plan of the Agenda 2063, Africa’s long-term development strategy for transforming the continent into the global powerhouse of the future. It also embraces the UN Agenda 2030 Sustainable Development Goals.
He said through the AfCFTA, Africa was reshaping her small and fragmented markets to create one integrated market with large economies of scale and scope.
Mr. Mene said Africa’s economic integration was no longer a matter of choice, it is necessary if Africa was to industrialize, develop intra-regional trade, strengthen capacities to benefit from globalization, reduce vulnerability to fluctuating overseas markets, mobilize and maximize scarce resources of capital and skills, and finally forge the way to effective African unity, both political and economic.
Currently, the countries of the continent survive mainly on exports of a very narrow range of primary commodities to traditional markets of the North while being heavily reliant on the import of capital goods.
As a result, African countries do not trade with each other that much.
He said as it was well known, Africa’s over reliance on exports of primary commodities is detrimental to the achievement of its economic development vision.
Exports of raw commodities generally attract low prices with insufficient foreign exchange revenues while downstream, along the traditional exports value chains in the destination market countries, considerable wealth and jobs are created.
“There is, therefore, the need to take action to dismantle this colonial economic model by transforming the structure of Africa’s economy from the primary commodity export-based one to a manufacturing industrial export-driven economy,” he added.
The Secretary-General said AfCFTA presented a renewed opportunity for Africa to steer its economic relations away from excessive primary commodity dependence and reliance on external creditors/donors to a new economic model based on self-reliant cooperation, value-addition and industrial activities, as well as higher levels of intra-African trade.
“With the AfCFTA, we have an opportunity to accelerate intra-African trade and to use trade more effectively as an engine for growth and sustainable development,” he said.
Mr. Mene said beyond trade in goods, the AfCFTA covered other trade-related issues that are critical to foreign direct investment strategies and activities including trade in services, competition policy, intellectual property rights, investment, dispute settlement and digital trade.
He said the finalisation of all these protocols would greatly contribute to deepening economic integration in Africa.
“With these additional protocols, we are further transforming the continent by removing physical and commercial barriers that have hitherto hindered trade among our countries,” he said.
Thus, far from being “a simple trade agreement,” the AfCFTA is “an instrument for Africa’s development.