AfCFTA to propel Covid recovery
By Business Reporter
THE advent of duty-free trade within the African Continental Free Trade Area (AfCFTA) has come at a critical time for the global economy and will ultimately boost sustainable post-Covid-19 economic recovery for the African continent, AfCFTA secretariat secretary general, Wamkele Mene has said.
Trading under AfCFTA has been effective as of January 1, with the implementation date having been delayed by six months, owing to Covid-19-related challenges. However, Mene believes this timing may prove beneficial in terms of a post-pandemic recovery.
“This is Africa’s opportunity for rapid economic recovery, post Covid-19. Other parts of the world are able to provide significant stimulus packages to reignite dynamism into their economies, to assist small, medium and microenterprises. The US has provided close to US$6 trillion in stimulus aid, while the European Union has provided about €800 billion. Not a single African country is able to match that.
“The best chance that we have as Africans at economic recovery is implementing this agreement, such that trade becomes the driver of Africa’s economic recovery and becomes a significant contributor to African growth, year-on-year, from 2021 onwards,” he commented.
‘The African Continental Free Trade Area: Economic and Distributional Effects’, a World Bank report published in July last year, notes that the AfCFTA will create the largest free trade area in the world – if measured by the number of countries participating.
“The pact connects 1.3 billion people across 55 countries with a combined gross domestic product valued at US$3.4 trillion. It has the potential to lift 30-million people out of extreme poverty. As the global economy is in turmoil, [owing] to the Covid-19 pandemic, creation of the vast AfCFTA regional market is a major opportunity to help African countries diversify their exports, accelerate growth and attract foreign direct investment (FDI),” notes the report.
AfDB president Dr. Akinwumi Adesina, speaking at the Virtual 2020 International Forum on African Leadership last month, noted that Africa must further accelerate the development of digital infrastructure.
He commented: “We must rethink infrastructure and for a Digital Africa. As economies recover, the world will become more digital. People, businesses, financial institutions and governments have to rapidly adjust to this new normal.
“The role of technology, especially digital technology, artificial intelligence, robotics and the Internet of Things, will further revolutionise financial inclusion, delivering services, climate information, insurance, and health delivery, especially new models of telemedicine for better access and affordable care.”
Trade Law Centre for Southern Africa executive director Trudi Hartzenberg, recently speaking at the AfDB-hosted webinar, echoed this sentiment, adding that the Programme for Infrastructure Development in Africa has taken on new significance in the current context, as countries need to factor fibre, satellite and other digital infrastructure into their development plans to bridge the digital divide.