Dr. Benedict Oramah
President of The Africa Export-Import Trade Afreximbank
The signing of the African Continental Free Trade Area (AfCFTA) Agreement by the overwhelming majority of African countries is a historic step towards rationalising Africa’s regional trade arrangements to deepen economic integration and draw on economies of scale and development of regional value chains to accelerate the process of structural transformation of African economies. As a flagship project of the African Union Agenda 2063: The Africa We Want, the AfCFTA will bring together 55 African countries with a combined population of more than 1.2 billion people and a combined gross domestic product (GDP) exceeding US$2.5 trillion, making the continent the largest free trade area created since the formation of the World Trade Organisation (WTO).
An integrated African market is likely to see enhanced flow of foreign direct investments (FDI) to participating economies and can shift FDI from natural resources to industry and manufacturing as investors seek to take advantage of economies of scale associated with increased market size. Implementation of the AfCFTA in the context of the broader Agenda 2063 will also enhance the integration of African economies into the global sphere and strengthen the process of engagement between Africa and its main trading partners, multilaterally within the World Trade Organization (WTO) framework and bilaterally with other trading partners, especially the developing South whose share of global trade has increased significantly over the last decades.
The AfCFTA Agreement also provides the framework for a comprehensive and mutually beneficial trade agreement among the member states of the African Union, covering trade in goods and services, investment, intellectual property rights and competition policy. Preliminary estimates and simulations suggest that the AfCFTA could significantly expand industrial production and intra-African trade, which at 15 percent today still compares unfavorably against the performance in other regions of the world, most notably Europe (68 percent), Asia (58 percent) and North America (37 percent).
Success at raising the scope of cross-border trade under the AfCFTA will depend on the commitment and ability of countries to address a number of challenges and supply-side constraints, including the development of regional value chains to produce more value added goods and services and increasing access to trade and market information.
The inaugural edition of the biennial Intra-African Trade Fair (IATF) being jointly organized by the African Export-Import Bank and the African Union and to be hosted by the Government of Egypt later this year is a continental response and an important step to sustainably addressing the gap in trade information. In effect, by creating a continental platform connecting buyers and sellers for business transactions the trade fair has as its primary focus, the promotion of intra-African trade and cross-border investment in support of the AfCFTA and the broader African Union Boosting Intra-African Trade (BIAT) Action plan. In addition to connecting African exporters and importers, the Trade Fair will bring together continental and global players to showcase and exhibit their goods and services and explore business and investment opportunities in Africa. It will also provide an opportunity for exhibitors to engage in Business-to-Business (B2B) exchanges and development of business opportunities. The Fair also promises to be a major platform for promoting Africa’s nascent creative industry.
The maiden edition of the Intra-African Trade Fair will take place in Cairo, Egypt, from 11- 17 December 2018. We encourage importers and exporters within the continent and foreign investors engaged in trade and other business transactions with African entities and corporations to attend the first-ever continental trade fair which will provide an unprecedented opportunity to enhance their presence in the continent at a time when the transition towards the African continental free trade area offers tremendous opportunities for trade and economic expansion in Africa.