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Continental free trade area will have to work for regional integration first – index shows integration is low

Continental free trade area will have to work for regional integration first – index shows integration is low

An index that measures regional integration across the continent was released over the weekend at the ongoing Conference of Ministers in Morocco. Preliminary findings indicate that regional integration remains low and will be detrimental, if not addressed first, to the eventual success of the African Continental Free Trade Area (AfCFTA).

The Index, known as ARII, was set up to monitor and evaluate the status of economic integration among African countries and to provide a basis for member states to track their progress. Its findings reveal that the Southern African Development Community (SADC) is the most integrated region in terms of trade, with South Africa as the most integrated country on the continent. In the five areas that were analysed – trade integration, regional infrastructure, productive integration, free movement of people and macroeconomic integration – South Africa topped the rankings.

South Sudan, on the other side of the scale, is least integrated mainly because of its modest performance in regional infrastructure and financial integration.

Meanwhile, integration in services, contributed more than 53% of the continent’s Gross Domestic Product but ratification of the protocol on the free movement of people has been slow, despite the 2016 launch of the Common Electronic Biometric African Passport, and the AU Protocol on Free Movement of Persons. The continent’s large infrastructure deficit remains a major hindrance to intra-regional trade.

“It is up to Africans themselves to ensure that the initiative benefits them through hard work and efficient implementation of the mechanisms of the CFTA,” said David Luke, Co-ordinator of the African Trade Policy Centre, Regional Integration and Trade Division of the Economic Commission for Africa (ECA).

Leila Mokadem, Country Manager and Resident Representative in Morocco for the African Development Bank stated that despite the “tremendous” political support for the AfCTFA, there are still major challenges ahead in terms of implementation and pushing the agenda forward to meet the goal of increasing intra-African trade to 25% by 2023 from between 15% and 18% currently. She cited weak productive capacity in Africa, high production costs, large infrastructure deficits and other challenges that affected Africa’s competitiveness. This is compounded by the number of small markets and 16 landlocked countries. “We can not gloss over the challenges but it is important to underscore the fact that it can not be business as usual if Africa is to progress.”

The final ARII and the accompanying Assessing Regional Integration in Africa IX Report will be released later in the year.

The Economic Commission for Africa is one of five regional UN agencies, mandated to promote the economic and social development of its member states, boost regional integration, and promote international cooperation for Africa’s development. Its headquarters are in Addis Ababa.


 

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