Business in Ghana
- Post 21 July 2012
- Last Updated on 30 November -0001
- Hits: 552
With the establishment of a Continental Free Trade Area (CFTA), Africa’s intra-regional trade is expected to increase by US34.6 billion dollars in 2022.
This would translate into real income gains of more than 290 million dollars, a report launched on the sidelines of the African Union Summit of Heads of States and Government has said.
A release issued by the Information and Communication Service of the Economic Commission for Africa (ECA) and copied to the Ghana News Agency in Accra on Friday said the summit was held in Addis Ababa, Ethiopia on the theme: “Boosting intra-African Trade.”
Entitled “Towards a Continental Free Trade Area”, the fifth edition of Assessing Regional Integration in Africa is expected to shape the debate and the move towards fast-tracking the establishment of a CFTA.
The report is published jointly by the ECA, African Union Commission and the African Development Bank (AfDB).
Speaking at a press conference, Mr Steven Karingi, Director, Regional Integration and Trade Division at the ECA said the report hadbeen published against the backdrop of a surge in the establishment of new Regional Economic Communities (RECs) and a commitment to strengthen existing RECs across the Continent.
He said with the small economic and population sizes of most African countries and the current global financial and economic
environment, “regional integration has become a formidable instrument for sustaining the current economic growth trends across Africa”.
“The ground-breaking tripartite initiative established by SADC, COMESA and the EAC is an encouraging sign – it is a springboard for achieving the CFTA with its sizable population of half a billion people, with a combined GDP of 630 billion dollars,” he said.
Mr Karingisaid the initiative is expected to have a domino effect and drive Africa closer towards the CFTA.
The report highlights a number of challenges, including the lack of or poor conditions of trade-related infrastructure, burdensome customs and legal procedures and the lack of diverse production structures across the majority of countries which have been the major culprits behind the slow progress in boosting intra-regional trade in Africa.
It emphasised that establishing the CFTA and boosting intra-African trade would therefore “require countries to look beyond the short term losses in tariff revenue and commit huge financialresources to eliminate trade facilitation bottlenecks”.
Speaking at the launch Mr Calvin Manduna, Principal Trade Expert at AfDB said: “There is greater enthusiasm; and we are seeing tangible changes taking place on the ground as ordinary traders and the private sector creates the demand to make the CFTA a reality,” he said.
“In some RECs, citizens have the right to move freely across borders without visas and establish and invest in businesses,” he noted.
Mr Manduna added that national and regional policies facilitated cross-border capital inflows, resulting in a six fold increase from 3.4 billion dollars from 2000 and 2002 to 21.7 billion dollars in 2010.