IMF unveils Trade Integration in Africa paper

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has attended an event in Kenya on Friday, to launch a paper that highlights the potential benefits of the African Continental Free Trade Area for the region.

The launched paper titled Trade Integration in Africa: Unleashing the Continent’s Potential in a Changing World, also explores the policies and reforms needed to achieve them.

The event included a discussion panel with Ngozi Okonjo Iweala, Director-General of World Trade Organisation, Njuguna Ndung’u, Cabinet Secretary, National Treasury and Economic Planning, Republic of Kenya, and Ryad Mezzour, Minister of Industry and Trade of Kingdom of Morocco, alongside Georgieva.

Since 2018, African countries have embraced a free trade area in Africa, 54 out of 55 countries have signed the African Continental Free Trade Area agreement (AfCFTA), Georgieva stated.

“Legislating is only the beginning, what matters is what policies are put in place so Africa can capture the advantages of trade, and they are enormous for Africa. The disadvantages of limited intra continental trade can be turned around into opportunities,” said Georgieva.

“If the AfCFTA is implemented, trade barriers removed, non-trade barriers removed and logistics transportation improved, intra continental trade can grow by 53 percent, trade outside of the continent can grow by 15 percent and that can lead to tremendous benefits in terms of an increase in income by 10 percent,” Georgieva added.

Reducing trade barriers from six percent to one percent can be a great step towards growing intra continental trade, outside trade and real income, as well as bringing non-trade barriers, which can convert to tariffs, to 18 percent, Georgieva highlighted.

Georgieva also stressed on using trade as an engine for integration for global supply chains and making regional supply chains more vibrant, as well as rediversiying the economy.

“What Africa needs is vibrant, youthful population at jobs. Trade is a massive generator of jobs. Getting 800 million jobs would be necessary, needing trade to be an engine for jobs,” Georgieva mentioned.

“It is good to take advantage of this opportunity in building more resilience to attract investment into the continent. The AfCFTA is an instrument for launching the 2063 agenda of the African Union, which aims to industrialize the continent,” said Ngozi Okonjo Iweala.

The Minister of Industry and Trade of Kingdom of Morocco has stressed on the importance of trust in the ability and deep resilience of Africa, countries have to trust each other, and to have trust in the private sector.

“Morocco is the seventh African investor in Africa, we contribute to the development of the financial sector. We contribute to food security, we are finishing the biggest African plant for vaccines, to ensure this regional integration,” Mezzour added.

Mezzour concluded with a statement from Moroccan King, Mohammed VI: “Wherever we look at it, from the angle of the continent’s dynamic forces, its resources or it potential, Africa is a great continent. It therefore has to take its destiny in its own hands, Africa is no longer a colonized continent, this is why Africa should learn to trust Africa.”