ADDIS ABABA – A greener African Continental Free Trade Area (AfCFTA) can be achieved if governments on the continent adopt proactive environment-friendly policies and enforce environmental standards, a trade economist said Sunday.
Maximiliano Mendez-Parra, a senior researcher at the ODI gave the advice during the webinar jointly organized by Economic Commission for Africa and the Overseas Development Institute (ODI) on the sidelines of the annual Conference of African Ministers of Finance, Planning and Economic Development.
“Trade in Africa will play a decisive role in the continent’s transformation and climate change action should not restrict it,” Mendez-Parra said at the virtual event on building back better through greening the AfCFTA.
Instead, in itself, “the AfCFTA can increase resilience to climate change,” he said.
Under the trading bloc which commenced transactions on 1 January this year, he said opportunities abounded to produce environment-friendly goods and services liberalization, harmonize and strengthen environmental standards, incentivize and facilitate the diffusion of green technologies as well as promote and facilitate green investment.
Despite the opportunities, Mendez-Parra identified what he called “significant roadblocks” constituting barriers to climate action such as limited understanding of climate risks, lack of supportive policies, and finance.
The AfCFTA provides an opportunity for Africa to create the world’s largest free trade area with the potential to unite more than 1.2 billion people with a gross domestic product of more than $2.5 trillion which is expected to usher in a new era of development.
Trading under the pact commenced on 1 January this year after a postponement for six months as a result of the COVID-19 pandemic.