Digitalization will turbocharge the African Continental Free Trade Area: ECA Official

Addis Ababa, December 12, 2022 (FBC) – Digitalization will turbocharge the African Continental Free Trade Area (AfCFTA), stated the UN Economic Commission for Africa (ECA).

The Economic Commission for Africa (ECA) has launched two key publications making a case for Africa’s participation in global value chains and leveraging digitalization and furthering trade under the African Continental Free Trade Area (AfCFTA)

In remarks at the launch of the two publications, Deputy Executive Secretary and Chief Economist of the Economic Commission for Africa, Hanan Morsy, highlighted how Africa can leverage digital technologies and participate in global value chains.

The annual Economic Report for Africa for 2022 focuses on recent economic and social development in Africa and explores unlocking the potential of developing digital technologies to mitigate global supply-chain risks as well as leveraging digital technologies and regional value chains.

The Existential Priorities of the AfCFTA – a seminal book to guide and assist implementation of the AfCFTA over the next 15 years – book identifies some of the critical actions needed to achieve the vision of an inclusive, transformative, digital, rules-based, results-based, modern, comprehensive, and fit-for-purpose trade area.

Building on the AfCFTA has become fundamental given the multiple crises that affect and continue to affect the African continent,” Ms. Morsy told participants in remarks read by the ECA Director of the sub-regional office for East Africa, Mama Keita.

Ms. Morsy alluded to the fact that the multiple crises affecting Africa presented an opportunity to use digital technologies to enhance trade through the African Continental Free Trade Area (AfCFTA).

“The AfCFTA is a game changer in promoting industrialization in Africa by availing the key market, demand, and area for trade implementation,” she added.

Mactar Seck, Chief, Technology Section, Technology, Climate Change and Natural Resource Division at ECA, said the AfCFTA provides new opportunities for local businesses to build new linkages in the supply chains on inter-African trade and that governments must create enabling policies and support the harmonization of regional value chains.

The session was moderated by ECA’s Director for Southern Africa, Eunice Kamwendo, who noted that “Digitalization will turbocharge the African Continental Free Trade Area.”

Underscoring the importance of regional integration is very important to Africa, Joseph Atta-Mensah, Principal Economic Affairs Officer, Macroeconomic and Governance Division at the ECA, said integrating 55 economies on the continent into one was a powerful development. He warned that to harness the power of integration,  African countries must be competitive because barriers and tariffs will come down when the AfCFTA is fully operational.

The AfCFTA is good but if we want to go to the full frontier of benefits that it promises we need to go the next mile and implement full customs and free movement of people,” advised Mr. Stephen Karingi, Director, Regional Integration and Trade Division at the ECA.

Ms. Joy Kategekwa, Strategy Advisor, UNDP Regional Bureau for Africa, said at this point in time the AfCFTA was ‘in a state of capture’ because it did not deliver on implementation, was not clear of its capacities, and had not freed the movement of people across Africa’s borders.

“It is time to shift from trade policy into industry and focus on great blueprints at the African Union… and go big on effective capacity building and take the pedal off this idea that capacity building is about training,” Ms. Kategekwa said.

In rolling out a successful AfCFTA, women have to be included,  argued Mary Lucia Mbithi, Senior Lecturer of Economics at the School of Economics, University of Nairobi. Ms Mbithi is one of the authors of the Existential Priorities of the AfCFTA publication.

“If we have gender equality we are likely to see better outcomes of the AfCFTA,” said Ms. Mbithi, who is also the Director of Research at the Women Economic Empowerment (WEE) Hub in Kenya, adding that statistics show that countries with longer gender gaps tend to have lower per capita GDP, as per ECA’s statement.