AfCFTA increases Intra-African trade by 20% in 2022 – UNECA
The United Nations Economic Commission For Africa (UNECA), has reported that the African Continental Free Trade Area (AfCFTA) increased trade between countries in the region by 20 percent in 2022.
Antonio Pedro, acting executive secretary of UNECA, spoke on the success of the AfCFTA project. The commission, in 2018, projected that the AfCFTA would increase intra-Africa trade by 52 percent by 2022.
While commenting on not achieving the projected 52 percent by 2022, Pedro said the level of trade had increased but not up to its target. He further said the rise in intra-African trade, however, was already encouraging certain countries to trade amongst themselves.
“Certainly not yet. But the levels of intra-African trade have gone up from 13 percent or so, before the African Continental Free Trade Area agreement was adopted, to now around 20 percent but that is not good enough because other regions are trading amongst themselves, above 70 percent or so in Europe and Asia. So, that certainly is our target.
“So, now it’s really about scale, it is about making these movements that cover the entire continent. One is to look at the product complementarity between our countries, so we could have African countries trading inputs with another country where, perhaps, you have a much larger processing capacity, and one example that I like to cite is between, for example, Gabon and Cameroon”.
“Cameroon has processing facilities for palm oil products that require additional inputs coming from the sub-region, and in this case, one could look at certain processed palm oil products coming from Gabon being processed in Cameroon to produce from soaps to oils to all sorts of other things.”
Pedro said the commission was making a trade decision supporting modelling, which is an exercise to identify the best export destinations for African countries.
However, he said the distance between African countries was much farther away than the distance between Africa and other continents.
“In the case of Cameroon that we have done one study; Nigeria certainly is the closest trade destination, however, what is very interesting is that a country that is not far from Cameroon which is the Democratic Republic of Congo (DRC) is trade distance,” he added.
“Countries that are miles away, China and the U.S. are closer trade-wise to Cameroon than DRC.
“Why is it that DRC is a trade distance because there are infrastructure issues. There are issues with essentially the connections and we need to address those binding constraints to Africa trading amongst themselves such as infrastructure.
“Some are hard infrastructure that we need to invest in improving links between our respective countries, others are soft infrastructure, and some other measures.”
Meanwhile, AfCFTA is expected to boost African nations’ trade by 60 percent by 2034.
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