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Trade Issues - Continental Free Trade Area

In 2012, Heads of State of the AU decided that Africa must establish the Continental free Trade Area by 2017. What is the Progress in this?

Work has already started and the project will be done in two phases. Phase I involves working with regional economic communities like the Common Market for Eastern and Southern Africa (COMESA); Southern African Development Community (SADC); East African Community (EAC); West Africa; Economic Community for Central Africa States and North Africa to move towards a free trade area before 2017. Phase II will involve bringing all these blocs together.

How far along are we in terms of integration?

When you talk of integration there are number of schemes. There is integration where goods, labour and services move freely. There is integration that also allows for capital movement. There is also physical integration — unfortunately, in this area, we have not done much.

In which Area is Africa lagging behind most?

We are lagging behind in the area of infrastructure where over 40 per cent of our competitiveness is lost because of the absence of or poor and inefficient infrastructure. The continent only accounts for 2.5 per cent of global trade, with the continent’s manufacturing sector only accounting for one per cent. Our intra-African trade is the lowest in any region at 12 per cent compared with about 40 per cent in North America and about 60 per cent in Western Europe. Africa remains politically and economically fragmented, with 54 small markets instead of one. Non-oil and non-mineral exports remain low at an estimated one per cent since 1992. .

What opportunities does Africa present to the rest of the world?

Africa has about 300 million middle class citizens who provide a viable market. We now need to integrate this market so that it turns into a powerhouse that can drive economies. Africa has huge natural reserves. All we now need is to put in place good governance structures to ensure resources benefit the people; that we exploit them in a sustainable manner and also add value. .

One of the roles of the AU is to promote peace, stability and good governance as conditions for inclusive growth. However, we are seeing a lot of intra-country conflicts.

We have set up the Africa Peace and Security Architecture, which has five main goals: To monitor and identify trends in society — they predict conflict. The second is the Panel of the Wise that includes former heads of state and government. They are able to approach any country that we feel is harbouring conditions that could precipitate a conflict and offers advice without being seen to interfere with a country’s internal affairs. Those who accept the advice have been able to avoid conflict. The third is mitigation management and conflict resolution. At least 60 per cent of our time and effort is spent on managing conflict within Africa. The fourth is post-conflict recovery, where we support countries that have emerged from conflict to put structures in place.

Do the trade agreements that individual countries have with bilateral partners affect Africa’s integration?

We must ensure the deals we are getting into are in line with Africa’s agenda. We must make sure that what we commit to is in the best interests of the continent. .

The Pan African Chamber of Commerce and Industry was established in 2009 by 35 founding national business chambers to influence government policy and create a better operating environment for business.

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