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.