The implementation of the AfCFTA Agreement is by necessity, a complex and highly collaborative undertaking, drawing on the expertise and experience of all. For the AfCFTA to be a successful and to increase the attractiveness of the African market for trade and investment, it must be complemented by similar progress of other AU Flagship projects, such as the African Integrated High Speed Network; African Commodities Strategy; Pan-African E University; the African Passport and Free Movement of People; Silencing the Guns; Implementation of the Grand Inga Dam Project; Creation of an Annual Consultative Platform for policy dialogue; Single African Air Transport Market; Pan-African Virtual University; and the Continental Financial Institutions.
The interlinkages with other critical economic sectors, the AfCFTA will similarly advance the progress in the implementation of the other sectors such as:
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CREATION OF OPPORTUNITIES AND PRIVATE SECTOR ENGAGEMENTS
The AfCFTA presents a unique opportunity for the continent to attain economic emancipation, which will lead to job creation, poverty alleviation, improved welfare and sustainable development. Beyond the policy transformation and reforms, the AfCFTA seeks to ensure inclusivity of women and youth, including youth in the rural areas, development of Small and Medium Enterprises (SMEs) and overall industrialization of the Continent. This will be guided by the Framework of the Agenda 2063, which among others calls for project development, structuring, marketing, financial collaboration and enhancing Public-Private Investment (PPP) and the AfCFTA Private Sector Engagement Strategy. Engagement with private and Public stakeholders is expected to generate support and awareness, direct support to responsible implementing stakeholders, evaluate and monitoring data, and access to collaborators.
Through various platforms the AfCFTA has been engaging with the Private Sector. This includes the Intra-Africa Trade Fair (IATF), where its 3rd edition will take place in the Republic of Cote d’Ivoire in 2023. The AfCFTA Business Forum is also expected to take place in 2023 with the view to further enhance fund mobilization and private sector engagement.
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REGIONAL VALUE CHAIN DEVELOPMENT AND FOSTERINGINDUSTRIALISATION
Africa’s dependence on trade with the outside world, with heavy concentration on export of primary commodities, has made the Continent particularly vulnerable to external macroeconomic shocks and protectionist trade policies. It is important for Africa to promote intra‐continental trade to reduce its vulnerability to external shocks and improve trade and economic performance and use the Theme of the Year to advocate for these causes. The AfCFTA is a key driver for Africa to realize the structural transformation and industrialization of the continent as envisaged in the AU Agenda 2063.
With the AfCFTA, regional value chains are being developed, under the AfCFTA Private Sector Engagement Plan, to offer African countries an opportunity to use regional advantages to boost competitiveness, diversify product supply, and export products with higher value-addition, to help bolster the continent from future economic shocks. This will also help lower our import dependency on goods that can be produced and traded within the continent.
The strategy focuses on four initial priority sectors or value chains, namely agro-processing, automotive, pharmaceuticals, and transportation and logistics, based on the potential for import substitution and existing production capabilities on the continent.
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TRADE FACILITATION AND INFRASTRUCTURE
Implementation of trade facilitation measures is critical for the successful implementation of the AfCFTA. Trade facilitation measures address major challenges such as increased trade costs arising from NTBs; inadequate, inefficient transportation and weak logistics infrastructure; cumbersome regulatory procedures; lengthy customs processes; and incoherent documentation, thereby placing Africa’s private sector at a competitively disadvantaged position.
There is need to augment industrial capacity to produce the goods and services that would be traded in the AfCFTA, to boost intra-African trade. Towards this end, it is important to accelerate work on improving the supply-side constraints such as the lack of good transport and logistic infrastructure, information and communications technology (ICT), and energy infrastructure by aggressively implementing the African Union’s Programme for Infrastructure Development in Africa (PIDA) to ensure a successful and sustainable industrialisation agenda and thus a successful AfCFTA.
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HARMONISATION OF STANDARDS AND REGULATIONS
Effective collaboration is also required for harmonized standards and regulations. This is to be achieved through standards development, mutual recognition, harmonisation that fosters increased rate of diversification, industrialisation and transformation of Africa’s economy and boosts the continent’s ability to supply its import needs from its own resources. It is also aimed to integrate systems so as to benefit from an increasingly connected global marketplace. This will include promotion, identification of the African Standardisation priorities activities through development, harmonisation and implementation of standards for identified priority products; promotion and coordinate technical competence of the African Quality Infrastructure bodies and related legislations to enhance the competitiveness of products of African origin and African Small and mid-size enterprises (SMEs) to facilitate the intra-Africa Trade.
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MAINSTREAMING TRADE AND CLIMATE RESILIENT DEVELOPMENT IN AFRICA
Climate change has underscored the need for Africa to build greater resilience, transforming her economies towards higher value-added production while preserving the environment. By collaborating with relevant stakeholders, there is need to mainstream climate change issues, including land degradation, into the AfCFTA implementation by advancing: climate resilient development, through several pathways, including; renewable energy and transformative green industrialization; agriculture, food and nutrition security and climate change adaptation; strengthening its development finance institutions; engaging in multilateral forums and; contributing to a compact on a global green new deal that advances Africa’s interests on climate resilient development.
Furthermore, climate change continues to be an increasing threat to Africa with most agriculture in Africa mainly rain fed. Africa also suffers from the cumulative effects of multi perils and hazards including repeated droughts, flooding, cyclones, etc. For instance, repeated droughts force rural households to deplete assets and engage in negative coping strategies including creating a continual state of food insecurity for the most vulnerable households. In addition to the ex-post impacts of drought, the risk of a drought event also has significant impacts on the growth of the agricultural sector by slowing on-farm investment and participation in higher-risk, higher-return productive activities. Drought risk further stifles investment by farmers in higher-value crops because households cannot access credit to purchase such inputs as seed and fertilizer. Also, Banks carry the same risks as their agricultural clients, so they hesitate to invest in agriculture because of potential default during a weather event or losses of revenue associated with low prices.
Therefore, policy innovations to unlock climate finance for resilient Food Systems in Africa is critical. That is why the African Risk Capacity (ARC) was established, as a Specialized Agency of the African Union, to capacitate African governments to better plan, prepare and respond to effects of extreme weather events and natural disasters and build a more resilient Africa that is adaptable to climate change towards building resilience in Africa which was positive ripple effects on the Agricultural sector and economic growth by unlocking critical climate and DRR finance. Scaling up in all facets of ARC will be critical on the way forward to actualizing the benefits of the AfCFTA.
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MAINSTREAMING THE ROLE OF EDUCATION SYSTEM IN THE IMPLEMENTATION OF THE AFCFTA
Beyond negotiations, capacity development to ensure the implementation of the Agreement is a critical element to the overall economic development of the continent. The importance of skills development, employability and opportunity driven entrepreneurship in helping Africa realize its continental trade objectives cannot be overemphasized.
Although Africa continues to experience a youth bulge, there is a mismatch between existing education and training and the skills needs of enterprises. Critically important is the need to foster not only the skills needed by enterprises today but also the skills of the future. To strengthen African businesses' competitiveness in the context of the AfCFTA, the priority is to invest in human capital to equip Africans with the skills needed to engage in skill-intensive manufacturing industries such as apparel and machinery.
To this end, there is need to work closely on the improvement of Education system, innovation and technology in supporting the AfCFTA market and to encourage start-ups towards job creation.
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MAINSTREAMING HEALTH INTO THE IMPLEMENTATION OF THE AFCFTA
More than 90 % of the global public health emergency events reported annually are from Africa. The continent has the lowest health workforce to population ratio in the world while carrying majority of the disease burden. In addition, 90% of vaccines, therapeutics and diagnostics are imported to Africa making the continent dependent on the rest of the world, even during crucial pandemic periods.
The COVID-19 Pandemic and the preceding 2014 Ebola Disease Outbreak demonstrated that trade within Member States of the African Union and between Africa and the rest of the world can be significantly affected by public health emergencies. Without careful consideration of health security in the continent the realization of AfCFTA will not be attained. This requires establishing and maintaining the trade and health nexus in the continent.
Accordingly, the Theme of the Year 2023 will consider health security as a critical component of the operationalization process. The second phase operationalization of Africa Centres for Disease Control and Prevention (Africa CDC) and the decision to establish and operationalize the Africa Medicines Authority (AMA) are considered as golden opportunities to mainstream health into AfCFTA.
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MAINSTREAMING THE ROLE OF WOMEN AND YOUTH IN TRADE
Africa has the youngest population in the world, with 70% of the population under the age of 30. Women make significant contributions to cross border trade in many African countries. However, women and young people face challenges such as underemployment, lack of opportunities and other structural and financial challenges that hinder their ability to trade. The AfCFTA seeks to enable women and young people to seize the opportunities it offers by advancing gender equality in Africa through increased employment opportunities and by helping to lower the gender wage gap. In line with Aspirations 1 and 6 of Agenda 2063 and African Women’s Decade on Financial Inclusion and Economic Inclusion 2020 to 2030, it is imperative for the AfCFTA to promote an inclusive socio-economic development of the continent anchored on women and youth through the AfCFTA Protocol on Women and Youth in Trade.
By capitalising on the Theme of the Year, a focused approach should be taken towards the alleviation of the rural population is a critical matter in the promotion of Women and Youth in Trade. This will ensure implementation takes place at the grass root and that no one is left behind in the implementation of the AfCFTA.
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MAINSTREAMING THE ROLE OF THE AFRICAN DIASPORA, PEOPLE OF AFRICAN DESCENT
Diaspora constitutes an important economic, social, political and cultural power, which cannot leave indifferent the African countries in the implementation of the AfCFTA. In February 2021, the Assembly also declared 2021-2031 as Decade of African Roots and Diasporas. The 2023 Theme of the Year should therefore bring together initiative aimed at bringing together, supporting projects, events and other initiatives to strengthen the role of these group in advancing the economic integration of the AfCFTA.
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MAINSTREAMING THE ROLE OF STATE PARTIES AND AFCFTA NATIONAL COORDINATION OFFICES
The key to the implementation of the AfCFTA is related to the role of the national government. It is critical local stakeholders; policy makers promote specific advantages and address important bottlenecks in the implementation of the AfCFTA. Accordingly, the AfCFTA Secretariat shall closely fast track the implementation of the AfCFTA Guided Trade, the use of the AfCFTA tools such as the Pan African Payment System, the AfCFTA Adjustment Fund and continue its work on ratification and domestication of AfCFTA.
In collaboration with Member States, the AfCFTA Secretariat, in collaboration with relevant stakeholders shall also endeavour to increase the support to State Parties on the operationalisation of the AfCFTA Coordination Offices. This coordination shall amongst other focus on the dissemination of the AfCFTA and all relevant document in African Languages so as to guarantee accessibility to the local community.
As the Building block of the AfCFTA, the Regional Economic Communities shall in this regard harness their role to coordinate the positions and approaches of their respective Member States in the implementation of the AfCFTA. The Indicative Action Plan developed with CEOs of RECs shall also serve as the basis for continued discussions between the Secretariats of the AfCFTA and the RECs in the implementation of the AfCFTA.
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MONITORING AND EVALUATION OF THE AFCFTA AGREEMENT AND THE DECISIONS OF AU POLICY ORGANS
The implementation of AU Policy Organs decisions on the AfCFTA is critical to the efficient and impactful operationalization of the AfCFTA and to achieving the objectives of the AfCFTA as stipulated in the AfCFTA. The implementation of legally binding decisions and commitments is one of the key priority areas of reforms of the African Union.
Within the framework of institutional reforms of the African Union, the AU Assembly decisions relating to the AfCFTA since 2017 emphasise the challenge of timely implementation of decision which result in delays in the start of trading under the AfCFTA by all AfCFTA State Parties. AU Assembly decisions on the AfCFTA broadly focus on the following areas: the finalization of outstanding phase I negotiations especially Rules of Origin, Schedules of Tariff Concessions and Schedules of Specific Commitments; completion of phase II negotiations that cover investment, competition policy and intellectual property rights; operationalization of AfCFTA supporting tools; framework of collaboration between the AfCFTA Secretariat and RECs; the institutional operationalization of the AfCFTA Secretariat; and engagement and collaboration with strategic partners and the private sector to ensure the effective implementation of the AfCFTA.
The Theme of the year for 2023 will provide the needed impetus for timely implementation of AfCFTA related decisions by AfCFTA State Parties and be instrumental to monitoring and evaluating such implementation to identify gaps, challenges as well as the support needed.
A key activity of the AfCFTA Secretariat envisages for 2023 is also the finalisation of the five- year implementation strategy of the AfCFTA. This strategy shall consider existing structures of the African Union and work closely with the Private Sector to ensure the implementation of the AfCFTA and overall, the set objectives of Agenda 2063 – the Africa We Want.