By Lilia Hachem Naas, Director, Office for North Africa, Economic Commission for Africa (ECA)
In Africa, the train of regional integration is now under way. On 21 March 2018 in Kigali (Rwanda), the majority of the continent signed the agreement for the establishment of the African Free Trade Area (ZLECA), the largest free market of goods and services since the creation of the WTO.
In North Africa, from Sudan to Mauritania, via Egypt, Libya, Tunisia, Algeria or Morocco, all the countries have responded: the ZLECA offers them an opening towards new markets in the world. time when trading partners such as the United States or the European Union are increasingly protectionist. The impact of the new free trade zone on job creation and diversification of economies is undeniable. These two dimensions will be at the heart of the discussions of the African Ministers of Finance, Planning and Development on the occasion of the 51st Annual Conference of the United Nations Economic Commission for Africa (ECA), scheduled for 11 as of May 15, in Addis Ababa (Ethiopia).
The CAFTA includes COMESA and ECOWAS, some of which have started to be closer to North African countries. Its stake is all the more important as the area is – without a doubt – a unique opportunity for openness and economic integration for stable and sustainable growth …
Missing the ZLECA’s running train is no longer an option
While much remains to be done before the establishment of an African Customs Union (in four years) or an African Economic Community (in ten years), the implications of the ZLECA are massive enough to allow African countries to determine their terms in relation to trade.
ZLECA represents today a market of 1.2 billion consumers, with a potential GDP of 2500 billion Dollars, characterized by a young and growing active population as well as a growing middle class and urbanization. According to estimates by the African Development Bank (ADB), by 2025, in seven years, consumption of African households is expected to reach $ 2.5 trillion. According to ECA, by 2030, in twelve years, the agricultural and agri-food market alone would cost $ 1 trillion. By 2050, a little over thirty years, the continent’s population would be 2.5 billion and its active population, today marked by the annual arrival of some 11 million young people on the continent. labor markets, at that time would represent 26% of the world’s working-age population.
To this immense potential are added the opportunities: only 16% of the trade of the African countries is done today inside the continent whereas the intra-regional trade amounts to 70% in Europe, 54% in North America. North and 51% in Southeast Asia. ECA, the African Development Bank and UNCTAD agree that the ZLECA can increase intra-African trade to more than 52% by 2022, and even more so if this process incorporates a reduction in barriers at the same time non-tariff.
