African leaders need to think critically about the opportunity presented by the Continental Free Trade Area in taking forward the agenda to boosting intra-African trade and to delivering prosperity for its people, says UNCTAD in its latest Policy Brief.
In June 2015, at the 25th Summit of the African Union (AU) held in South Africa, African Heads of Government agreed to the creation of the Continental Free Trade Area (CFTA) by 2017 through negotiations on liberalization of trade in goods and in services.
The initiative presents major challenges as well as opportunities to boost intra-African trade. While strengthening the multilateral trading system remains vital, a parallel negotiating process to expeditiously launch the CFTA and monitor the implementation of the agreement is also important. Also in order to multiply the benefits of the CFTA and promote development regionalism in Africa, a comprehensive vision of trade and development needs to be in place.
Expanded markets for African goods and services, unobstructed factor movement, and reallocation of resources should promote economic diversification, structural transformation, technological development and enhancement of human capital.
The CFTA must be ambitious in dismantling barriers and reducing costs to intra-African trade, and improving productivity and competitiveness. The intraregional trade liberalization needs to be contextualized in a broader developmental framework that will provide benefits in terms of realizing Africa’s Agenda 2063 and the UN 2030 Agenda for Sustainable Development.
Development oriented regionalism will contribute spearheading Africa’s achievement of development goal, build resilience to external financial and economic crises, and foster inclusive growth. It would have spill-over benefits in terms of helping foster peace, security and political stability in the continent.
UNCTAD, working in partnership with the African Union Commission, African States and other development partners is committed to supporting the attainment of these objectives embodied under the CFTA.