Addis Ababa, Ethiopia:
The ongoing COVID-19 pandemic has amplified the sense of urgency in Africa’s quest towards effective and timely implementation of intra-Africa trade and economic recovery, experts have argued.
AFRICA’S ECONOMIC RECOVERY
The United Nations Economic Commission for Africa (UNECA) anticipates the African economy to continue its recovery from the COVID-19 pandemic in 2022 by achieving a growth rate of 3 percent, similar to that recorded in 2019.
Africa’s recovery is reinforced by the increasing global demand for goods and the recovery of commodity prices, exceeding their pre-pandemic levels, which should stimulate exports from commodity-exporting African countries, economic experts from the UNECA said in a recent email interview with Xinhua.
The experts argued that the gradual easing of pandemic-related restrictions plays an important role in Africa’s economic recovery, which remains vulnerable especially if the spread of the Omicron variant leads to a significant increase in mobility restrictions.
They, however, stressed that the recovery process is still threatened by several factors such as inflationary pressures, difficult financial conditions, political instability, and low vaccination coverage rate.
Following significant increases in public spending due to measures taken by African governments to limit the impact of the pandemic on economic growth, experts expect public spending to decline in the near future, which could eventually reduce economic growth and inflation.
In this regard, the UNECA projections suggest that the inflation rate in Africa will decrease from 9 percent in 2021 to 6.4 percent in 2022 with double-digit inflation in several countries.
The expected decrease in inflation is expected to alleviate the debt vulnerability if accompanied by appropriate measures, including effective debt restructuring and management.
QUEST FOR STRONG INTRA-AFRICA TRADE
The historic continental free trade pact that entered into force in 2019 started implementation in January 2021. It envisages creating a single continental market for goods and services, with free movement of people and investments, enhancing competitiveness and supporting economic transformation.
The UNECA argued that although COVID-19 disrupted and to some extent delayed the realization of Africa’s vision of creating a single continental market for goods and services, with free movement of businesspersons and investments, and enhanced competitiveness of industry, it also gave Africa the opportunity to improve.
The pandemic heightened the sense of urgency for effective and timely implementation of the African Continental Free Trade Area, UNECA officials told Xinhua.
Noting that the disruption caused by the pandemic exposed Africa’s weaknesses, gaps and inequalities, experts argued that the major disruptions in global supply chains as a result of hard lockdowns and closure of borders constrained domestic production in African countries as supplies of imported inputs dried up.
The hard lockdown measures and closure of borders had further resulted in a decline in exports revenues as the production and movement of exports were also adversely affected.
“Most countries initially imposed hard lockdowns which meant that production temporarily ceased in sectors deemed to be non-essential, creating many economic and social challenges, which most are yet to fully recover from,” officials from the UNECA said.
Amid the economic brunt caused by the disruptions as a result of the pandemic, the UNECA said African countries have shown various commitments as part of their mitigation plan, which includes developing and implementing AfCFTA National Implementation Strategies at the country level.
They emphasized the crucial imperative of strengthening existing institutions and building new institutions where they do not exist at national, regional and continental levels both in the public and private sectors.
Strengthening and formalizing informal cross-border trade and upgrading African health systems, both public and private are also said to be crucial mitigation steps.
Of immediate concern is said to be the need to secure adequate vaccinations to support the recovery of travel and transport services in order to improve trade facilitation.
PARTNERSHIP WITH CHINA BOOSTS AFRICA EXPORTS
As Africa’s economic recovery is reinforced by the increasing global demand for goods and the recovery of commodity prices, the African continent has welcomed the “generous offer” China is set to provide members of the African Union (AU) to help augment exports in the coming years.
Smooth logistic routes between China and Africa during the COVID-19 pandemic have helped African countries fight the pandemic, promoted two-way exchanges of products and ensured that the continent’s economic recovery is on the right track.
Speaking to Xinhua recently, Wamkele Mene, the Secretary-General of the AfCFTA Secretariat, said Africa welcomes China’s investments and trade partnership based on mutual benefits.
“We welcome the generous offer of China to boost Africa’s export capacity. Individual countries and regions’ capacity to export to China is improving day by day,” Mene told Xinhua.
Mene mentioned China’s efforts to build a green channel for African agricultural exports and expand zero-tariff treatment for products imported from Africa, in a bid to import products worth 300 billion U.S. dollars from Africa in the next three years.
Mene said increasing African exports to China would benefit Africa’s industrialization.
Official data showed that China has been Africa’s largest trading partner for more than a decade. Over the past three years, China’s agricultural imports from Africa have grown at an average annual rate of 14 percent, making China the second-largest agricultural importer in Africa.
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