African finance ministers and policy makers on Tuesday wrapped up their 5-day conference in Ethiopia’s capital Addis Ababa reaffirming their commitment to the African continental free trade area (AfCFTA).
Under the theme “African Continental Free Trade Area: Creating fiscal space for jobs and economic diversification”, the conference deliberated on issues related among others to agriculture, infrastructure, illicit financial flows, and an integrated strategy for the Sahel.
Reiterating the pivotal role of the private sector in pushing the AfCFTA forward, the conference of the UN Economic Commission for Africa (ECA) has called for concerted and common approach to advance trade facilitation.
The conference has urged policies and investments necessary to capture the economic benefits of the proposed trading bloc.
The ministers have reiterated the potential of the AfCFTA to advance industrialization, economic diversification and development to foster prosperity for all on the continent.
It has also recognized the challenges including concerns over the impact upon the tax base arising from a single continental market for goods and services.
“The short-term impact is likely to be minimal and will be outweighed in the medium and long term by the positive impacts of revenue from other sources of taxes,” said a ministerial statement of the 51st session of the Council of Ministers.
Indicating that the new sources would arise from economic growth and diversification from trading in a bloc of 1.2 billion consumers, the ministers have urged simplified trade regimes for informal cross-border traders and upgraded trans-boundary infrastructure to facilitate trade.
The Executive Secretary of the ECA, Vera Songwe, reaffirmed the commitment of her organization to support governments in moving towards economic integration through its convening, thought process and operational functions.
The meeting recognized the preeminent role of human and institutional capacity building that would enable the AfCFTA to meet many of the continent’s development needs.
“Africa is waiting. Our challenges are huge but we are on the way to solving them through the AfCFTA,” noted the Executive Secretary.
The meeting forms part of wider consultations on the historic deal that was signed by 44 African countries in Kigali, Rwanda, in March 2018.
Kenya and Ghana have already ratified the AfCFTA agreement and documented the ratification to the African Union (AU).
Other countries will be required to ratify and implement the legal instruments of the agreement that would create a trade bloc with a combined gross domestic product of more than 3 trillion U.S. dollars together with an additional 300,000 direct and 2 million indirect jobs, according to the African Union (AU).
A minimum of 22 ratifications are required to enable the agreement to get into force. Enditem