By Kenneth Afor |
Wamkele Mene, Secretary General of the African Continental Free Trade Agreement (AfCFTA) has said that the structure put in place by the agency is capable of providing the needed succour for the continent’s falling economy as a result of the COVID-19 pandemic.
Mene asserts this Monday in South Africa during a virtual discussion organised by the Nelson Mandela School of Public Governance.
According to the World Bank, economies in the Sub-Saharan region will contract by between -2.1 percent and -5.1 percent in 2020 after it grew by 2.4 percent in 2019, this contraction will be the first economic recession to be witnessed in the region plunging the region in 25 years.
However, in the light of this projection, it will take a much higher hand to rescue the continent from this doldrum but due to the weak economic policies and lack of implementation from most governments in the region, the AfCFTA will be the resource available according to Mene.
He said, “Africa does not have those tools and so for us, the only economic relief package is the AfCFTA and implementing it in such a way that we significantly boost intra-Africa trade.”
Nigeria became a signatory to the AfCFTA in August 2019 in which it will allow free movement of goods to be traded within the African continent without any form restrictions whatsoever but as it stand and with the pandemic at hand the initiative is yet to commence.
The halt in economic activities has denied a lot of developing economies in the continent access to key commodities that will keep them afloat during this pandemic. It has also hampered the free flow of goods in the supply chain sector thereby delaying delivering of essential medical commodities that could serve as emergency response to those in critical conditions.
According to figures, Africa currently engages between 15 percent and 18 percent of intra-trade which is far below what is obtainable in other territories.
Mene suggests that the only to get the continent out of an imploding economy is for countries to engage aggressively by ramping up its intra-tade activities.
“Increased intra-Africa trade is really the only way that we can ensure that we have a stimulus package for Africa to drive economic growth and get Africa back on track for growth of above the 4 percent projected ahead of the pandemic,” he said.
Rob Davies, former Trade and Industry minister said there is need for the continent to ramp up production capacity which will address the supply deficit in medical commodities adding that attention to rev up the infrastructure could serve in averting future natural circumstances.
“We need to be fast-tracking our work on developing productive capacity, through regional value chains in areas that deal with health, such as pharmaceutical products and medical devices, and also infrastructure that can withstand flood and droughts. This infrastructure build can be a big stimulus to getting some of our value chains working.
“One of the big questions I think we need to be thinking about is what tweaks and changes do we need to be making to the architecture of the AfCFTA as we develop learnings from the value chains – that might include how we approach tariffs towards the rest of the world to support the emergence of industries and value chains within our continent,” said Davies.
Policy implementation of the AfCFTA has been put on hold till January 2021 as a of the pandemic.
Share this
