‘How CFTA will drive economic integration, reduce barriers’
If Nigeria and other African countries embrace the Continental Free Trade Area (CFTA) agenda, which becomes operational by 2017, the continent may witness a mutually benefitting relationship by all parties, the United Nations Conference on Trade and Development (UNCTAD) has said.
Specifically, UNCTAD expressed concerns over the low level of intra-African trade, emphasising the need for African countries to embrace the full benefits of the CFTA to achieve economic integration.
Indeed, while the three Regional Economic Communities (RECs)—the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern African Development Community (SADC)—have reached an agreement to expedite the process towards the operationalization of the tripartite Free Trade Area by finalising outstanding issues, the ECOWAS region continues to lag behind as the region continues to grapple with infrastructure and red tapes.
The CFTA, which is expected to be in place by October 2017, will bring together 54 African countries with a combined population of more than one billion people and a combined gross domestic product of more than $3.4 trillion.
With the CFTA, African leaders aim to, among other things, create a single continental market for goods and services, free movement of business persons and investments and expand intra-African trade.
The CFTA is also expected to enhance competitiveness at the industry and enterprise levels.
The Africa Regional Head, UNCTAD, Dr. Joy Kategakwa, explained that the best way for African economies to go is to grab the momentum of CFTA that the African Heads of States have agreed on, in order to eliminate barriers to trade and create opportunities for African people in Africa.
Kategakwa, during a dialogue session organised by the Lagos Chamber of Commerce and Industry (LCCI), tagged “Challenges of economic integration in West Africa”, said: “Regional integration is a cornerstone and a key path to get strength and numbers to create big amount share of the international trade. UNCTAD believes in the catalytic role that regional integration plays in economic development. We are here to help and also to learn the better structure to support the projects that we have.”
“Intra-African trade has huge potential and this is why we have to work relentlessly to make it happen more but official figures tell us that it is in the range of 12 to 14 per cent, but of course we are not good at capturing what happens in informal trading which is a huge part of trade landscape in Africa.
“For me, the figure is low but the opportunity is huge and this is why opportunities within ECOWAS, at the continental level must fully be embraced to bring into fusion the possibilities of opportunities that businesses in Africa have.”
She added that one of the biggest challenges affecting intra-African trade is lack of infrastructure which has crippled many business opportunities, noting that the CFTA will go a long way to address the challenge.
She added, “We can do this by streaming down the cost of tariffs, rules and regulations, creating opportunities for African people to have businesses wherever it is in Africa.
“We are working with the African Union (AU), ECOWAS and member states to position them to better manage technically and analytically how the integration will be a success,” she said.
She noted that UNCTAD has a long credible experience in supporting countries to develop trade and trade related policies across different sectors, maintaining that it would prioritise trade and trade related policies with its regional operations in Africa.
Also speaking at the event, the Deputy Governor, Lagos State, Mrs. Idiat Adebule, represented by the Director in charge of Administration and Human Resources, Mrs. Yetunde Odejaiye, said the theme of the event is apt and timely as it hinges on identifying the underlying challenges and prospects critical to achieving the fundamental objectives of promoting cooperation and integration under the auspices of ECOWAS.
She said as member states, African economies have common challenges and similar prospects, stressing the need to build on the gains already achieved in trade, commerce, transportation, communication amongst others.
“We also need to build enduring institutions that cuts across and remove any manifestation of ideological differences, colonial or political affiliations. We need to come together and focused to ensure that we turn these challenges to our gains. We need to put in place infrastructures and ensure adequate security to attract both local and Foreign Direct Investments (FDIs).
“African nations must continue to encourage entrepreneurship and allow more private concerns to create jobs, develop our industries in order to be self-reliant. We should focus attention on critical change that will attract FDI and stimulate the economy. African nations must look inward and diversify their economy to meet the needs of the people in order to increase productivity, encourage industrialisation and remove all impediments that will inhibit the flow of economic activities within the region of member countries,” she said.
The president, LCCI, Dr. Nike Akande, explained that integration is the main vehicle for boosting trade within the sub region, saying that with integration, West African economies would be stronger and also be able to cope with the challenges of globalisation.
She added that in these days of raging forces of globalisation, individualistic disposition and outlook may not be sustainable, calling for the need for west African countries to broaden its perspectives and thinking beyond individual countries.