Cities have integral roles in Africa’s regional economic integration

Economics Eca Report
Economics Eca Report

LA new report by the United Nations Economic Commission for Africa (ECA) has highlighted the leading role of cities in unlocking economic gains available through regional economic integration, particularly under the African Continental Free Trade Area (AfCFTA) agreement.

The report, ‘Cities: Gateways for Africa’s Regional Economic Integration,’ copied to the Ghana News Agency, which was launched Wednesday, is the first piece of comprehensive research to assess the linkages between Africa’s rapid urban transition and regional trade integration.

It seeks to answer several critical questions, including how African cities can benefit from AfCFTA, what strategic investments are needed for cities to drive accelerated regional trade integration and how AfCFTA may transform cities and spatial development across the continent.

In response to these questions, the report provides concrete steps for an increased policy focus on investment in Africa’s cities to realise the full economic potential from AfCFTA, thereby boosting economic growth, reducing poverty and fostering inclusion.

Key findings
According to the report, regional trade integration has the potential to raise living standards by connecting cities to new markets, thereby enhancing access to a wider and cheaper variety of goods and services.

The spatial effects of regional trade can transform Africa’s urban corridors, also contributing to the rise of small and intermediary cities and regional hubs, and better urban-rural connectivity.

The report also reveals that urban consumption can transform Africa if the demand is met through intra-regional production and trade.

It notes that cities need increased policy attention and investment to unlock their full potential hubs for regionally traded goods and services, whilst stressing that better connectivity among cities is necessary to develop regional value chains under AfCFTA.

Ms. Edlam Yemeru, acting Director of ECA’s Gender Poverty and Social Policy Division, in her remarks at the launch event, said Africa’s regional trade integration was happening in the context of rapid urban transition.

She added: “The way in which cities are planned and managed will impact regional trade integration. Similarly, regional trade integration will lead to the growth of existing and new cities, while impacting the well-being of urban dwellers. It is thus critical to integrate an urban lens into national and regional strategies for AfCFTA to leverage emerging opportunities.”

Ms Mama Keita, the Director of ECA’s Sub-Regional Office for East Africa, stressed that urbanization and regional economic integration were drivers of Africa’s economic growth and transformation on their own.

In his opening remarks, Mr. Ishaku Maitumbi, the Senior Technical Adviser at UN-Habitat, noted that the report made a “vital contribution” to the important phenomenon of urbanization and regional trade integration in Africa.

He said the report made it evident that Africa’s economic transformation can be achieved when there was a focus on urban consumption, regional trade and spatial planning.

Key recommendations
To take full advantage of Africa’s rapid urban transition and regional economic integration, the report made four key proposals that countries could adopt to unlock the untapped opportunities presented by AfCFTA.

It urged governments to implement trade policies with cities in mind, especially when designing and implementing their national AfCFTA strategies and investments be made in cities according to their role in regional trade, making sure small, mid-sized and large cities reach their full economic potential.

Again, it underscored the need for governments to ensure cities were prepared to take full advantage of emerging trade opportunities and called for solid decision-making on trade policy using spatially and gender-disaggregated data.

Panellists further discussed a range of opportunities that could be tapped to support productive urbanization and inclusive regional trade integration in Africa, including ways to strengthen the productive capacities of urban areas, digital connectivity, financing readiness of cities, the role of remittance, cross-border payments and the evidence on the different impact trade will have on cities.

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