BY VICTORIA ONU
THE United Nations Industrial Development Organisation, the African Union, United Nations Economic Commission For Africa and the African Union Commission have called on countries in Africa to begin a process of massive industrialisation to be able to maximise the potentials of the African Continental Free Trade Agreement.
The UNIDO Regional Representative to ECOWAS and Regional Director, Nigeria Regional Office Hub, Jean Bakole, while reading the joint statement, said at an event to commemorate the 2020 Africa Industrialisation Day, that the AfCFTA opened up opportunities for African countries to diversify away from commodity dependency towards increased intra-African trade in manufactured goods.
The AfCFTA, which was signed last year and was supposed to take off on July 1, this year, had been delayed due to the coronavirus disease outbreak that had set back negotiations on the protocol for trade in goods, including tariff concessions.
Based on projections by the United Nations Economic Commission for Africa, the AfCFTA is expected to boost intra-African trade by between $50bn to $70bn in monetary terms, with a 40 per cent to 50 per cent increase over the first 20 years of its implementation.
Bakole was represented by the National Programme Officer, UNIDO Regional Office Hub, Nigeria, Dr. Osu Otu.
According to him, this year’s commemoration presents a unique opportunity to consolidate the continent’s vision to build a self-resilient and self-reliant Africa using the platform of continental economic integration.
He explained that the pact would ensure the opening up of economies of scale for member countries as well as attract increased investments from both small and large-scale enterprises.
According to him, the operation of the AfCFTA also signals Africa’s commitment to preservation of the multilateral trading system.
He said the event with theme, “Inclusive and Sustainable Industrialisation in the AfCFTA era,” provided a renewed opportunity to re-affirm the commitment of African Union Member States and that of the international community towards accelerating the inclusive and sustainable industrial development of the African continent.
Bakole said the choice of this year’s theme for AID, could not have been more appropriate, given the fact that trading is expected to commence under the African Continental Free Trade Area on 1 January 2021.
Moving forward, Bakole said implementing the agenda for Africa’s industrialisation would require a new way of looking at Africa’s unique position and potential to engage and effectively insert itself in regional and global value chains.
He said, “Without a transition from commodities to value addition and economic diversification, including tradeable services, as well as embracing the rapidly evolving technologies, African economies will have limited room to grow national incomes, or expand fiscal space.
“Thus the greatest prospect for Africa’s accelerated pace to industrialise, rests on the development of regional value chains, to inform viable cross border investment decisions.”
“That way, the pace and impact of regional, and continental integration can become a reality, strengthening the continent’s SMEs, and large-scale enterprises’ capacities to plug into global value chain production systems,” he added.
The Minister of State for Industry, Trade and Investment, Mariam Katagum, said the role of African countries in the global economy had gone beyond the provision of raw materials to other continents, adding that time had come to boost production in order to stimulate growth.
She said with the ratification of the AFCTA by the Federal Government, the ministry and all stakeholders would ensure the smooth implementation of the agreement.
This, she said, would be achieved by ensuring that the manufacturing sector played a leading role in ensuring the diversification of the economy away from oil to non oil.
She said, “The ACFTA will help to attract investment into our economy, particularly where we have competitive advantage.
“The ACFTA is one of the biggest markets in the world with one billion people and it will increase competitiveness of African products by enhancing economies of scale, better allocation of resources, reducing price differential among African countries, development of specialisation, reducing vulnerability of African countries to trade shocks and reduce external borrowing.
Katagum explained that with the plan to commence the implementation of the agreement in January next year, the ministry would accelerate investment to have a strong response as a buffer to complement the government intervention in the aftermath of the COVID-19 pandemic.
The AfCFTA will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class, and a combined Gross Domestic Product of more than $3.4trillion.
In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organisation.
Estimates from the Economic Commission for Africa suggest that the AfCFTA has the potential both to boost intra-African trade by 52.3 per cent by eliminating import duties, and to double this trade if non-tariff barriers are also reduced.
The main objectives of the AfCFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union.
It will also expand intra-African trade through better harmonisation and coordination of trade liberalisation and facilitation and instruments across the RECs and across Africa in general.
