Africa Integration Day, hope grows for the African Free Trade Area (AfCFTA)
The AU launched at very short notice a series of fascinating online panels and sessions over the week of 6-9 July and proclaimed African Integration Day on 7 July. The EFA attended as many of these events as possible to represent the pan-African ecommerce sector. The date should have seen the physical meeting of Heads of State in Pretoria under the Chairmanship of the AU Chairman, President Ramaphosa, but that event has been postponed until the end of the year or early 2021. Online negotiations under Phase 2 of the AfCFTA are already underway. These are concentrating on removing 90% of all intra-Africa tariffs and dismantling non-tariff barriers. Ecommerce will be discussed in Phase 3 starting in Jan 2021, and EFA is already in touch with the SA government.
The COVID pandemic is expected to cost Africa up to $79 billion in lost economic output in 2020 with the risk of millions of job losses. World Bank researchers estimated the AfCFTA would lift 30 million Africans out of extreme poverty and 68 million from moderate poverty by 2035. “In this context, successful implementation of AfCFTA would be crucial,” a World Bank report said. “[It] is a major opportunity for Africa, but implementation will be a significant challenge. Lowering tariffs is only the first step.” Once in force, the AfCFTA will bring together 1.3 billion people across 54 countries with a combined gross domestic product of $3.4 trillion. Full implementation could increase real income in Africa by 7%, or nearly $450 billion, mainly by reducing the cost of trade through the elimination of tariffs and red tape. Ivory Coast and Zimbabwe – countries with the highest costs of trade – could see income gains of 14%. Readers interested in the digital economy and the AfCFTA should read the SAIIA report – https://saiia.org.za/research/the-digital-economy-and-e-commerce-in-africa-drivers-for-the-african-free-trade-area/
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