The United Nations Economic Commission for Africa (UNECA) says African countries continue to do more business with the outside world than among themselves, according to findings of an assessment report on the progress of regional integration in a Covid-19 context.
According to the document, presented at the 39th Committee of Experts of the Conference of African Ministers of Finance, Planning and Economic Development, the European Union is the largest trading partner in Africa with a total volume of 29.8 percent in 2018. China-Africa trade and the UK’s exit from the EU (‘Brexit’), would be changing this trend.
Presenting the report, Director of Regional Integration and Business Division at UNECA, Stephen Karingi blamed Covid-19 restrictions for the severe halt in the implementation of regional integration initiatives such as the African Continental Free Trade Area (AfCFTA). The expert said that “integration continues to be hampered by the challenges of governance, peace and security as key pillars that also include economic movement of people and services, and infrastructure.
For him, the achievement of continental development goals are disassociable from peace and security.
Productive integration is also key to linking African economies in a regional and global value chain
“Inter-African trade registered a high before the pandemic, although it remained low compared to other regions,” Karingi noted, adding that “digitalization is key to maintaining competitiveness by enabling effective participation in e-commerce.”
In 2018, Africa accounted for only 2.6% of global trade, business between the continent’s countries rose from 15.5% in 2017 to 16.1% in 2018, equivalent to $159.1 billion (11.4 trillion meticals).
The report reviews the progress of regional integration in Africa, placing particular emphasis on the progress made by the Regional Economic Communities (RECs). Macroeconomics, production, trade, and infrastructure were some dimensions of integration studied.
The others are free movement of people, governance, peace and security.
The AfCFTA came into effect last January 1st after almost six months of postponement due to Covid-19.