IDDA3: Exploring strategies for the successful implementation of AfCFTA
The AfCFTA, launched by the AUC in March 2018 in Kigali, Rwanda, has enormous potential for catalyzing this structural transformation, as it will spur industrialization, economic diversification, and employment in Africa.
Heads of States, high-level representatives of governments, development financing institutions, and UN agencies together with representatives of the private sector, non-governmental organizations and academia met today at the United Nations Headquarters to discuss how inclusive and sustainable industrial development can support the implementation of the African Continental Free Trade Area (AfCFTA) agreement.
The event was organized by the United Nations Industrial Development Organization (UNIDO), the African Union Commission (AUC), the African Development Bank (AfDB), the United Nations Economic Commission for Africa (UNECA), and the Food and Agriculture Organization of the United Nations (FAO).
In the next decades, Africa is set to become the youngest and most populous continent in the world, with a working-age population expected to grow by around 70 percent to number 450 million people by 2035. Job creation in Africa is not keeping pace with the growing workforce and large parts of the rural population, the urban poor, women, and youth have not benefited from recent economic growth.
Unemployment and inequality still remain unacceptably high. Policymakers now acknowledge that the continent's economies need to undertake a systematic structural transformation from resource-based economies to more diversified economies, specifically by increasing the shares of manufacturing and agro-related industry in national investment, output, and trade.
The AfCFTA, launched by the AUC in March 2018 in Kigali, Rwanda, has enormous potential for catalyzing this structural transformation, as it will spur industrialization, economic diversification, and employment in Africa. It will create a continental market of 1.2 billion consumers and an African GDP of US$2.5 trillion and is expected to provide great business opportunities for trading enterprises, businesses, and consumers.
Welcoming the audience, Amina J. Mohammed, Deputy Secretary-General of the United Nations,highlighted that "real output growth is estimated to have increased by 3.6 percent in 2017, up from 2.2percent in 2016, and is poised to accelerate to 4.1 percent in 2018 and 2019" and added that "despite this positive economic growth, challenges remain for the achievement of meaningful inclusive and sustainable industrial development for Africa."
Addressing the New York meeting, LI Yong, the Director General of UNIDO, which is leading the implementation of the Third Industrial Development Decade for Africa (IDDAIII), said that, if the full benefits of the AfCFTA are to be fully realized, industrialization should be the central focus. He predicted that "the successful implementation of the AfCFTA will lead to an increase in demand for goods manufactured by small and medium-sized enterprises."
Also, the African Union Commissioner for Trade and Industry, Ambassador Albert M. Muchanga, emphasized that "the African Continental Free Trade Area and IDDAIII are complementary, and the alignment will offer win-win outcomes to Africa and the international community."
All speakers agreed that for the implementation of the AfCTFA to be sustainably successful it will necessarily require further enhanced and concerted efforts by all international and national stakeholders –especially through innovative global partnerships on a multilateral level. Pierre Guislain, Vice President of the African Development Bank, said that "the private sector has a critical role to play in driving Africa's industrialization and integration". He added that "boosting intra-African investment was as important as boosting intra-African trade" and called on governments "to accelerate adoption and implementation of the CFTA and create truly integrated regional markets that have the scale needed for large private investments". He indicated that industrializing Africa is one of the African Development Bank's top five lending priorities.
Vera Songwe, Executive Secretary of the UNECA, stressed, "if the AfCFTA is to catalyze Africa's industrialization through integrated markets then bridging infrastructure gaps and digitalizing economies across the continent is critical!"
Noting that the AfCFTA and industrialization strategies will need to exploit the full agribusiness potential of the continent, José Graziano da Silva, Director-General of the FAO, said, "Agro-industrial development that connects family farmers, herders and fisher folks to rewarding markets can create opportunities for young people, stimulate greener practices throughout the food system, and deliver healthier and safer food to consumers."
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