TradeMark Africa Chair urges coordinated reforms to overcome trade barriers and unlock Africa’s economic potential through the AfCFTA framework.
Reflecting on Five Years of AfCFTA
As the African Continental Free Trade Area (AfCFTA) commemorates its fifth anniversary, Hailemariam Dessalegn, Chair of TradeMark Africa and former Ethiopian Prime Minister, has called for a concerted effort among African nations to address persistent barriers hindering intra-African trade. Speaking at a public lecture in Accra, Dessalegn highlighted the necessity of collective action to tackle challenges such as inadequate infrastructure, complex regulations, and the lack of a unified trading currency.
Addressing Key Trade Barriers
Dessalegn emphasized that Africa’s financial systems currently do not support seamless currency convertibility or cross-border payments, impeding trade efficiency. He illustrated this with the example of a Kenyan business needing to convert its currency into US dollars before acquiring Ghanaian cedis, a process that increases costs and delays. To mitigate such issues, he advocated for the implementation of regional payment systems that enable businesses to trade using their local currencies.
Additionally, Dessalegn criticized the continent’s ongoing practice of exporting raw materials to Europe and importing finished goods made from those resources. He argued that this cycle hampers Africa’s economic growth and called for a shift towards value addition within the continent.
Progress and Persistent Challenges
Despite these challenges, Dessalegn acknowledged the progress made under AfCFTA, noting an increase in intra-African trade from US$140 billion in 2017 to US$190 billion in 2023. However, he pointed out that intra-African trade still constitutes only 15 percent of the continent’s total trade volume, compared to 50 percent in Asia.
Strategic Investments for Trade Enhancement
To unlock Africa’s trade potential, Dessalegn called for urgent investments in key transport corridors, such as the LAPSSET corridor in East Africa, the Abidjan-Lagos route in West Africa, and the North-South Corridor in Southern Africa. He also emphasized the role of public-private partnerships in financing infrastructure projects and the need to digitalize trade processes to streamline operations.
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