ECA Chief urges Africa to invest in infrastructure to bolstor free trade
ADDIS ABABA – Africa has to bridge the infrastructure gap in order to reap the benefits of the African Continental Free Trade Area (AfCFTA).
This is according to the Acting executive Secretary of the UN Economic Commission for Africa Antonio Pedro.
“To reap the AfCFTA opportunities we must address Africa’s infrastructure gap,” Pedro told participants at the 12th Annual Investment Meeting late last week.
“To attract sustainable cross-border investments to Africa, hard and soft infrastructure must be addressed.”
Africa’s infrastructure investment gap is estimated at more than $100 billion per year, affecting the living conditions of Africans and its competitiveness.
The theme of the Africa Regional Session was the ‘The AfCFTA Investment Protocol – An Investment Paradigm Shift for Africa’ which set out to discuss the role of the AfCFTA and its Investment Protocol to create a new framework for attracting sustainable and productive investments to the continent and the investment opportunities that are arising as a result of that.
According to Pedro, it is not because of the lack of blueprints, Africa has not achieved structural transformation, but rather the lack of policy space to pursue the agenda.
He called on African countries to support the implementation of the AfCFTA with “harmonized continental, regional and national trade and industrial policies that will help move from ideas into action”.
The AfCFTA entered into force in 2019 and constitutes a single continental market with a population of about 1.3 billion people and a combined GDP of approximately US$ 2.5 trillion.
At its full realization, the AfCFTA with the mandate of eliminating trade barriers, will be the largest free trade area in the world bringing together the 54 countries.
The AfCFTA and the Program for Infrastructure Development in Africa (PIDA) of the African Union will help deepen regional integration and build regional value chains, Pedro noted, highlighting the importance of building beyond Africa’s comparative advantage of resource endowment and low costs.
“We need to invest in science, technology and innovation to stay competitive in the long run and build Regional Value Chains that can generate more value added to increase the market share of African businesses,” he said.
Africa can leverage its natural resources to create sustainable regional value chains such as the battery and electric vehicles value chain in the Democratic Republic of Congo (DRC), as per ECA’s acting executive Secretary.
“Green industries are important for Africa’s competitiveness in future net-zero carbon markets”, said Pedro.