A Continental Free Trade Area to support Africa’s industrial development objectives? tralac Roundtable, 17-18 November 2016
tralac hosted a roundtable in Cape Town to consider Africa’s quest for industrial development and diversification, and the implications for the continent’s integration agenda. The aim was to facilitate a frank conversation about Africa in a complex 21st century global economic reality; with the aim of prompting new thinking about policy interventions that can support Africa’s industrialization.
Industrial development has again become an important feature of Africa’s regional integration agenda and discourse; this is true at regional economic community (REC) level as well as at the continental level. African leaders adopted an Action Plan for Accelerated Industrial Development for Africa (AIDA), in 2008. Specifically, AIDA is expected to contribute to developing and diversifying Africa’s industrial capacity, supporting connected value addition on the continent and enhancing competitiveness of enterprises. The importance of inclusive capital and financial market development, and investment in this process, is recognized too, especially to improve access to finance for small-scale and rural enterprises.
The increasing role of new technologies in, and the servicification of production across all sectors of the economy, as well as the demand for specialized, technical as well as soft skills in complex 21st century production environments, require careful consideration of interventions that are expected to guide resource allocation choices, investment location decisions, decisions about production methods, production organization and trade.
In January 2012, African Union member states adopted a decision to Boost Intra-African Trade (BIAT) and to expeditiously establish a Continental Free Trade Area (CFTA). The aim of the CFTA to ‘enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better allocation of resources,’ reminds us that fundamental competitiveness challenges still constrain Africa’s capacity to produce tradables competitively.
How can the CFTA contribute to addressing these challenges? The CFTA agenda covers trade in goods and services, scheduled for the first phase of the negotiations, and then investment, competition and intellectual property to be negotiated in a second phase. The connections among these substantive negotiating issues are particularly important when viewed from an industrial development and competitiveness perspective. It will be detail of this agenda, the particular choices of member states as regards negotiating modalities, sequencing of the negotiations, and the level of ambition that they commit to, that will determine the contribution of the CFTA to Africa’s industrialization and development.
This was the first in a series of roundtables on Africa’s industrialization; our aim is to support a critical and creative discourse on options for Africa’s industrialization and implications for its regional integration agenda. The second roundtable, to be held in February 2017 in Cape Town, will include perspectives from the private sector across the continent.
Further information on the negotiations towards the Continental Free Trade Area can be found on tralac’s CFTA resources page.
Although the resources pages are constantly updated as new information becomes available, the negotiation, ratification, implementation and/or modification of legal instruments and policy documents is an ongoing process and not always well-reported or updated by the relevant authorities.