The full implementation of Africa's free trade area will help regional countries including Kenya drive out the current global economic turmoil arising from the Russia-Ukraine crisis, the UN Economic Commission for Africa (Uneca) says.
Economic falling-out from the crisis which has disrupted global supply lines in Kenya and other African states is driving food and energy prices higher and putting the most vulnerable people in the continent at risk of hunger, the UN agency warns.
But the acting Executive Secretary of the UN Economic Commission for Africa Antonio Pedro says the speedy implementation of the African Continental Free Trade Area (AfCFTA) is an opportunity to create resilience within African countries like Kenya.
He noted the “persistent, compounding and deepening multiple crises” that Africa is facing, are “continuing to perpetuate and exacerbate levels of poverty and inequality that were already significant before these recent global shocks.”
“Recent crises have underscored the need for systemic change. Policymakers and experts worldwide are recognizing the importance of building resilient and sustainable systems, shifting away from a primary focus on efficiency that has dominated past decades,” said Mr Pedro in a statement.
“This represents a paradigm shift of historic significance, and it is our generation's responsibility to ensure that Africa embraces this change and harnesses the continent's potential.”
According to him, “(Africa) must ensure the necessary investments in sustainably building up capital in critical assets – including human, infrastructure, and natural – to provide us with the needed environment to achieve the ambitions of the 2030 Agenda and Agenda 2063.”
“Another opportunity is the aggressive pursuit of sustainable industrialization and economic diversification to transform Africa’s natural resources into tangible benefits for its people, the battery and electric value chain being a case in point,” said Mr Pedro.
He said the regional trade pact can help Kenya and other African countries to industrialise fast and grow jobs.
Kenya, which is also grappling with the effects of the Russia-Ukraine war, was the first country in the eastern Africa region to ratify the trade deal after the National Assembly adopted it.
The pan-African free trade zone aims to bring 1.3 billion people together in a $3.4 trillion (Sh435 trillion) economic bloc that supporters say will boost living standards, encourage development and make Africa less dependent on trade with other regions.
“This is where the African Continental Free Trade Area (AfCFTA) can deliver on its promise and provide the economies of scale to invest in manufacturing, leading to increased intra-Africa trade.
“This will bring supply chains closer to home and inject a degree of self-sufficiency in essential products such as medicines, food and fertilizers.”
The pact he said also provides the region with “a unique bargaining tool as we negotiate for fairness and equity in the utilization of our natural resources for development.”
He at the same time called for a “fairer and more just global financial architecture that responds to the needs of the most vulnerable.”
“Currently, many countries simply cannot access international financial markets because of rising interest rates, and existing debt relief mechanisms do not work well for us,” he said.
“To address this financing divide the (United Nations) Secretary-General has called for the SDG Stimulus of about $500 billion per year, focused on tackling the high cost of debt and rising risks of debt distress, scale up affordable long-term financing for development, and expand contingency financing to countries in need,” said Mr Pedro.