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Success of free trade zone in Africa will add $1trillion to global economy – Karingi

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Mr. Stephen Karingi
Mr. Stephen Karingi

Trade experts believe that when a Continental Free Trade Area in Africa is successfully established, it would lead to intra-African trade rising to 22% of total African trade and, in line with similar efforts worldwide, would add approximately $1 trillion to the global economy.

Jointly with the African Union Commission (AUC) and African Development Bank (AfDB), the Economic Commission of Africa (ECA) is developing the 6th edition of Assessing Regional Integration in Africa (ARIA VI). This publication will address areas of commonality and divergence in regional Rules of Origin, the difficulties and challenges countries face in their implementation, and will offer practical ways to harmonize them throughout Africa.

When published the ARIA VI would be a useful resource to assist member states in “negotiations on rules of origin and related trade liberalization measures” which “include areas such as one stop border posts, single windows, integrated border management, and trade and business information.”

Addressing the 8th Session of the Committee on Trade, Regional Cooperation and Integration of the ECA in Addis Ababa, Ethiopia Mr. Stephen Karingi, Director of the Regional Integration, Infrastructure and Trade Division of the United Nations Economic Commission for Africa (ECA) , has said despite the fact that intra-African trade is noted to be low, estimated to be around 12 percent, it is sophisticated.

According to him “though intra-African trade is low (about 12 percent), the composition of this trade tends to be more sophisticated in terms of trade in manufactures than is usually perceived”, amounting to 46 percent, relative to trade with the rest of the world.

He added that whilst intra-African trade in manufactures was relatively high, the amount of agricultural trade was low, at 15 percent. However, this was a trade area with “potential… in Africa as a key driver of growth, trade, employment and poverty reduction.”

Mr. Karingi indicated that the future of African trade and infrastructure is bright, and that with effective implementation at regional and sub-regional levels, a Continental Free Trade Area, supported by strong infrastructural development, is possible.

Mr. Karingi, optimistic about the direction of African trade, noted the decision of African Heads of State and Government to establish a Continental Free Trade Area by 2017.

This decision was reached at the 18th Summit of the African Union in Addis Ababa in 2012.

Commenting on current trends on trade in Africa, Karingi stated that, “though intra-African trade is low (about 12 %), the composition of this trade tends to be more sophisticated in terms of trade in manufactures than is usually perceived”, amounting to 46%, relative to trade with the rest of the world.

He called on African countries to harmonize the rules of origin and trade facilitation instruments across Regional Economic Communities (RECs) to facilitate the development of a Continental Free Trade Area.

By Emmanuel K. Dogbevi

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