Despite the African Continental Free Trade Area (AfCFTA) being ratified in almost all African countries, intra-trade within the continent is still very poor, a report by the Economic Commission for Africa (ECA) has revealed.
The report on assessment of progress on regional integration in Africa shows Africa’s regional integration agenda is progressing, but very slowly. Also, the Programme for Infrastructure Development in Africa has seen mixed results in its efforts to enhance infrastructure. While progress has been made in the areas of roads and ICT, advancements in rail transport and energy infrastructure have been almost non-existent, with financing posing a significant hurdle.
ECA Director, Regional Integration and Trade Division, Stephen Karingi, said unconstitutional changes in government across the continent, unemployment and poverty remain top challenges facing the continent. “The rising number of unconstitutional changes of government highlights the ongoing challenges afflicting African countries, including weak governance, persistent poverty and limited employment opportunities. The effective implementation of the agreement will determine the extent to which the continent can derive the benefits of free markets and trade integration for the overall benefit of the people on the continent,” he said.
The report further noted that although the agreement establishing AfCFTA officially started on January 1, 2021, the anticipated improvements in trade between African countries are yet to materialise. The proportion of intra-African trade relative to worldwide trade decreased from 14.5 per cent in 2021 to 13.7 per cent in 2022.
During this time frame, the share of intra-African exports out of total exports dropped from 18.22 per cent to 17.89 per cent and the share of intra-African imports out of total imports fell from 12.81 per cent to 12.09 per cent. Africa continues to grapple with a significant yearly shortfall in infrastructure funding, estimated to be between $130 billion and $170 billion.
To bridge this gap it said, innovative financial mechanisms such as blended finance, bonds focused on environmental, social and sustainability goals as well as debt-for-nature swaps are being explored.
