Africa-wide free trade zone gets a boost

Plans for an Africa-wide free trade zone agreed to by the African Union in January this year have been given a boost through support from the United Nations Conference on Trade and Development (Unctad). The organisation will provide assistance relating to trade policy, trade facilitation, and productive capacity. “Productive capacity” is an economy’s ability to produce a broader range of goods, and goods of greater sophistication. The plan has seven areas of action in total. Speaking at the opening of the trade ministers’ meeting in Doha, Qatar, Unctad secretary-general Supachai Panitchpakdi said Africa had 16% of the world’s population, but accounted for only 2% of global Gross Domestic Product. “We are not proceeding as fast as we need to and much work lies ahead,” he said. Intra-regional trade is considered vital for spurring and sustaining economic growth. European countries, for example, carry out over 70% of their trade with other European nations. In Africa, by contrast, intra-regional trade accounts for only 11% of overall African trade. Increasing trade within the continent would provide such benefits as more rapid shipping, potentially lower transport costs, and the knock-on effect of the spread of technology, innovation, and business methods wellsuited to local conditions, according to Unctad. Experience also has shown that intra-regional trade is less vulnerable to international economic shocks – a matter of some importance after Africa was battered by the recent global recession.