African countries continue to trade more with the outside world than among themselves, according to findings of the Economic Commission for Africa (ECA) assessment report on progress made on regional integration, the continent’s share of global trade stands at less than 3 percent. Infrastructure development through the Programme for Infrastructure Development in Africa achieved mixed results. While roads and ICT advanced, rail transport and energy infrastructure progressed little. Africa still faces a massive annual infrastructure financing gap estimated between $130 and $170 billion.
The African share of global trade remained at less than 3 per cent, driven largely by merchandise trade, an indicator that African countries continue to trade with the rest of the world more than among themselves, according to a new report on the Assessment of progress on the regional integration in Africa by the Economic Commission for Africa (ECA) ahead of the 4 to 5 March ministerial segment of the Conference of African Ministers of Finance, Planning and Economic Development. Despite progress in monetary and financial integration, member states have not met the macroeconomic convergence criteria. Intra-African trade as a share of global trade has declined from 14.5 per cent in 2021 to 13.7 per cent in 2022.
“We should make a decision that’s a minimum of 30%of the reserves of each one of us. Our reserves should be invested in the African multilateral institutions. I speak about the ADB, AFREXIM Bank which will strengthen their balance sheets and strengthen their capabilities also to facilitate more and more resources for our development”.
Nana Akufo-Addo, President of the Republic – Ghana
From the report of the ECA on the assessment of progress on the regional integration in Africa, there has been some progress in the fulfillment of the first 10-year implementation plan (2014–2023) of Agenda 2063: The Africa We Want, of the African Union, including the adoption of the Agreement Establishing the African Continental Free Trade Area and the creation of the Single African Air Transport Market. The Market is expected to increase the frequency of flights along existing air routes by 27 per cent and allow for gains through economies of scale of about 500 million dollars from passenger fares, free competition, the opening of new commercial routes, environmental protection and the development of the private sector in civil aviation
“The effective implementation of the Agreement will determine the extent to which the continent can derive the benefits of free markets and trade integration for the overall benefit of the people on the African continent,”
Stephen Karingi, Director, Regional Integration and Trade, ECA – Kenya
As part of the solutions to promote trade within the African continent, the African Continental Free Trade Area (AfCFTA) was launched in January 2021 by the African Union. This indulges signatories to remove tariffs on 90% of goods for other signatories, to progressively liberalize trade in services and to address other non-tariff barriers. The objective is to increase Africa’s income by 450 billion dollars by 2035. Beyond the policy transformation and reforms, the AfCFTA seeks to ensure inclusivity of women and youth, including youth in the rural areas, development of Small and Medium Enterprises (SMEs) and overall industrialization of the Continent.