South Africa has been identified by the United Nations (UN) as the most connected country in terms of cross-border relations with other countries on the continent, according to the world body’s recently released Africa Regional Integration Index. Compiled by the UN’s Economic Commission for Africa, the index looks at three key areas of integration: trade, production and macroeconomic achievements. It also analyses regional infrastructure and the free movement of people. The latest index found that generally, the continent performed poorly in terms of co-operation and overall economic integration, with a large infrastructure deficit impeding intra-African trade.
However, despite concluding that integration across the continent isn’t what it should be, and that investors shouldn’t hold their breath about anticipated benefits of the African Continental Free Trade Agreement (AfCFTA) – which aims to create a single market for goods and services, followed by free movement of people and a single-currency union – the UN lauded the Southern African Development Community (SADC) for being the most integrated region on the continent in terms of trade. Moreover, researchers
found that the most important contributor to cross-border integration across the SADC was South Africa. They noted the positive spinoffs that could emanate from AfCFTA, saying it had the potential to become the world’s biggest free trade zone, incorporating 55 countries with a combined consumer potential of 1.2 billion people. However, for the trade agreement to come into force, 22 countries need to sign on. Currently, there are 21 signatories. Almost half of the countries that have signed on have
delivered their instruments of ratification to the chairperson of the African Union Commission. But sign-on is still too low, warns the UN, leaving the continent hamstrung at the moment. Signing the trade pact does not yet establish the African free trade area, although it does give effect to the trade zone’s protocols and annexes. Only once the agreement is ratified by 22 states will the free trade area be ready for rollout and formally exist. The UN has also expressed concern at what it terms the “continent’s large infrastructure deficit”, saying that without the necessary enabling structures, intra-regional trade will be unable to progress at desired levels.
CAPTION:
The most important contributor to cross-border integration across the SADC was South Africa. – UN
