The UN Economic Commission for Africa (ECA) has called for bold actions toward realizing the African Continental Free Trade Area (AfCFTA).
The call was made at the ongoing 51st session of the Conference of African Ministers of Finance, Planning and Economic Development in the Ethiopian capital, Addis Ababa.
The theme of the May 11-15 gathering is: “African Continental Free Trade Area: Creating fiscal space for jobs and economic diversification.”
Participants at the conference and side events will discuss the potential for AfCFTA as a powerful tool to drive industrialization, economic diversification and overall development on the African continent.
The five-day event aims to advance the ambitious initiative to form a regional common market that could boost intra-African trade to 52 percent by 2022, up from the current level of only 16 percent, organizers said.
Side events on Sunday covered such topics as sustainable development, agriculture and Africa’s transformation; financing infrastructure; education and employment; an integrated strategy for the Sahel; and priorities for tackling illicit financial flows in Africa.
This year’s conference has come after the signing of the AfCFTA by 44 of the African Union’s 55 member states earlier this year.
Kenya and Ghana last Thursday handed over to the African Union (AU) the documents ratifying the AfCFTA, becoming the first two countries to do so.
A minimum of 22 countries are needed for the AfCFTA to come into force.
Vera Songwe, executive secretary of the ECA, urged focus on how to operationalize the AfCFTA agreement in a manner that realizes its potential to the benefit of the average African.
She underlined the need to create the “fiscal space” to foster public and private investment, while ensuring economic diversification with the view to creating jobs.
Songwe acknowledged concerns that the AfCFTA may cause losses in tariff revenues, leading to “holes” in national budgets.
However, she said, the impact would be “small and gradual.”
“These tariff revenue losses may be outweighed by the additional revenues from growth to be generated by AfCFTA,” Songwe said.
African governments are also urged to take a broader review of macroeconomic policies, especially fiscal measures, to ensure they are “fit for purpose” to make the most of the AfCFTA.
“We need to improve our levels of fiscal space. This includes boosting tax revenues, improving the efficiency of public expenditure management, tackling illicit financial flows and making use of private finance for public projects,” she said. Enditem