unctad.org | 8th Ordinary Session of the Conference of AU Trade Ministers
Statement by Mr. Mukhisa Kituyi, Secretary-General of UNCTAD
8th Ordinary Session of the Conference of AU Trade Ministers
Addis Ababa
23 Oct 2013

[AS PREPARED FOR DELIVERY]

Your Excellencies,
Distinguished Delegates,
Ladies and Gentlemen,

It is a great pleasure for me to address this gathering for the first time in my capacity as Secretary-General of UNCTAD.

As many of you know, UNCTAD and the African Union are from the same generation - born in the wake of decolonization. If the AU has already celebrated its golden jubilee, UNCTAD's fiftieth anniversary will take place next year. And for five decades, we have shared a common objective: To ensure that integration in the world economy becomes a tool for development. The African Union focuses on its continent, while UNCTAD is considering the challenge from a global perspective.

As we reflect on the trade challenges facing Africa today, a lot of attention will naturally focus on the forthcoming WTO Ministerial in Bali, and its stakes for Africa. My friend Yonov has already spoken on this issue. And yet - irrespective of the outcome - Bali will only be one step along the way. Truly harnessing trade for development will require a broader agenda to build productive capacities and much-needed infrastructure, and fostering innovation and higher-value added.

The African Union Action Plan for boosting intra-African trade holds significant potential in this regard. Standing at a mere 11.3% of total trade, intra-African trade pales in comparison to that of other regions: In Asia, it is 50%, in Latin America and the Caribbean 21%, and in the European Union a staggering 70%. Vast opportunities for intra-African trade are currently not being exploited. This is particularly the case in agriculture: Africa has 27 percent of the world's arable land, and yet 37 African countries are net food importers. And yet, only about 17 percent of Africa's total trade in food and livestock takes place within Africa. Surely, a greater proportion of Africa's food needs could be met from within the continent.

But agriculture is not the only area where boosting intra-African trade can bring benefits. UNCTAD has shown that intra-regional trade flows tend to be more intensive in manufacturing. Indeed, in the 1990s, 53% of intra-African Trade was composed of manufactured goods. Thus, expanding intra-African trade can help to promote industrial upgrading. And these are only a few of the benefits. The challenge is to realize them.

In this context, UNCTAD has recently issued an analytical report dedicated to boosting intra-African trade. Allow me to highlight just three of its major policy-recommendations for the way forward. They are: Implementation of existing Regional Trade Agreements, Developmental Regionalism and Private Sector engagement.

Firstly, Implementation of Regional Trade Agreements: If African governments want to make significant progress in boosting intra-African trade, they have to address the problem of lack of implementation of regional trade agreements. While the regional economic communities have made some progress in recent years, it is well-known that the implementation rate is generally very low. Here, the introduction of a monitoring tool, such as the internal market scorecard of the European Union, which measures the extent to which Member States have transposed regional trade rules into national laws, could help to enhance implementation of agreements on the continent. Selected regional institutions could be mandated to report on this indicator every two years and the results could be presented at the African Union summit.

The second recommendation relates to what I call Developmental Regionalism: African governments should move away from the traditional approach to integration, which focuses exclusively on the elimination of trade barriers, to a broader conception of developmental regionalism, which combines trade liberalization with measures to strengthen productive capacities. These measures include strengthening the capacity of the private sector to produce, building key infrastructure, promoting economic transformation, and building economic linkages among African economies through creation of development corridors. It also requires the adoption of a strategic approach to trade policy, the coordination of investment into identified priority areas, and strengthening of the institutions and capabilities of African governments for implementing economic policies. The integrated approach used in initiatives like the Greater Mekong Sub-region in East Asia could hold important lessons in this regard.

The third recommendation is on the critical role of constant dialogue between the State and the business community in the formulation and implementation of policies. Although, ultimately, Governments have the responsibility for setting priorities, making rules, designing policies and signing trade agreements, it is the private sector that takes the risks necessary to build production capacity. Unfortunately, when we talk about regional trade and integration in Africa, there is a tendency to focus on government policies and the role of regional institutions. Yet, the experiences of other successful regional integration arrangements shows that regular consultations with a private sector are crucial for a better understanding of the constraints they face and how to address them.

These three recommendations are just some of the key findings of our recent study on this important issue. My office will send copies to each Minister represented at this meeting. I will be glad to receive any feedback.

Ladies and Gentlemen,

Boosting intra-African trade, and the related challenge of meeting Pan-African CFTA, is a cause we share deeply. To this end, I am glad to announce, this morning, the launch of a special initiative by UNCTAD on capacity-building for the CFTA. Over the next three years, my officers will work closely with AUC and countries on operationalizing the resolution of February 2012 in pursuit of a CFTA by 2017. As many of you are aware, deliberations on the formulation of a post-2015 Development Agenda, including a set of goals to follow the current Millennium Development Goals, have begun in New York. The eventual goals and related indicators are likely to significantly shape the development landscape for years to come. I would therefore strongly encourage African countries, including the trade community, to ensure that their voices are heard in these deliberations. In this way, global efforts can be focused to achieve our common goals.

Thank you very much.



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