Egypt’s Minister of International Cooperation, Rania Al-Mashat, has said that activating the African Continental Free Trade Area (AfCFTA) is an integral part of achieving sustainable development.
Africa should capitalize on this agreement to enhance joint cooperation between the African countries, increase the private sector’s engagement, facilitate restructure of regulatory legislations, and bolster e-commerce, she added.
Al-Mashat’s remarks came during a roundtable, entitled “Africa in the Age of New Trade Wars”, that took place during the Africa CEO Forum held on 28-30 September. This occurred with the participation of several high-level speakers, including Mauritania’s Prime Minister Mohamed Ould Bilal, and Managing Director of the International Finance Corporation (IFC) Makhtar Diop.
Al-Mashat said that before COVID-19, the world had already taken precautionary decisions, which accordingly impacted the mobility of international trade, emphasizing that when the pandemic hit at the beginning of 2020, it imposed more restrictions on international trade, causing a rise in the cost of international trade, which in turn harmed the consumers and increased the prices. This is in addition to negatively affecting competition and productivity in developing and developed countries.
The Minister further elaborated that the pandemic contributed to altering many global systems, norms and rules; shedding light on new challenges, including climate change, the world’s need for equality and the risks of migration. She stressed that responding to these challenges requires focused global, collective effort.
Moreover, the Minister expressed that the economic repercussions of the COVID-19 pandemic are still unclear, and its exact impact is unknown; referring to the International Monetary Fund’s (IMF) expectation of the global economy to shrink by 5.2% this year due to the pandemic’s negative impact. Not only that, Al-Mashat also noted that African countries are the most affected by the pandemic’s negative repercussions, as they are more dependent on imports with regards to medical supplies and primary commodities.
She further elaborated that AfCFTA, which is the largest in the world, has the potential to open the horizons of expanding the African economy and to be a model of multilateral cooperation and international trade. It is worth noting that exports between African countries in 2017 represented 16.6% of the global exports, compared to 68% in Europe and 59% in Asia, which underscores Africa’s immense untapped potential.
“Establishing AfCFTA aims to enhance Africa’s economies, which encompasses 1.3 billion people, with a GDP of $3.4trn. This could be the continent’s driving force for sustainable recovery and inclusive growth so as to help Africa overcome the pandemic’s repercussions,” Al-Mashat stated.
Al-Mashat stated as well that despite the challenges that may prevent establishing the African Continental Free Trade Area, such as weak infrastructure and logistical constraints, it is through tapping on the region’s e-commerce and digital transformation that it becomes possible to overcome these challenges.
According to the World Bank, the African Continental Free Trade Area (AfCFTA) presents a major opportunity for African countries to bring 68 million people out of extreme poverty; those who live on less than $5.50 per day. It also plays a role in enhancing the economies’ competitiveness, bolstering productivity, and achieving sustainable and inclusive growth, and most importantly, it is the key for enhancing the livelihoods of 30 million African people.
Concluding this discussion, the Minister tackled key measures undertaken by Egypt to enhance the private sector’s participation in the development agenda, in addition to enhancing its role in integrating African countries through launching a company to guarantee the risks of exports to the continent. One of the prominent steps taken towards the achievement of the continental integration is working on activating the Cairo-Cape Town road.
