González: Africa's potential remains untapped

In an address today to African trade ministers, Arancha González, the Executive Director of the International Trade Centre (ITC), outlined ITC’s work in support of regional trade integration and African governments’ pursuit of a continent-wide free trade agreement.

Speaking to the 9th Ordinary Session of the Conference of African Union Ministers of Trade in Addis Ababa, Ethiopia, Ms. Gonzalez applauded the AU’s decision to pursue a continental free trade area, saying that ‘the economic and development dividends of regional integration [in Africa] are substantial and largely untapped’.

Ms. González told ministers that ITC had kept its pledge to last year’s summit that Africa would be ‘at the heart of ITC’s interventions’. In 2014, ITC had hosted its annual flagship event, the World Export Development Forum, in Africa for the first time. Fully 67% of ITC interventions focused on sub-Saharan Africa, least-developed countries (LDCs) and small-island developing states (SIDS), in excess of the 60% target set at the beginning of the year.

ITC has worked to build strong relationships with individual African countries, the continent’s six regional economic communities and the African Union Commission, she said, developing projects and programmes to complement their plans for trade and investment integration.

Ms. González set out how ITC’s activities in Africa tied into the strategic plan guiding ITC’s work through 2017. For instance, work with the AU Commission to establish a Pan-African Trade Observatory would enhance access in Africa to trade and market intelligence, prerequisites for businesses to tap into new markets. Projects in the agri-food and services sectors would help build value chains in Africa, while support for women and youth entrepreneurs would deliver social dividends alongside economic ones.

Trade facilitation and tackling barriers to regional trade features prominently in the ITC chief’s address. She pointed out that recent ITC research had found that African countries applied higher tariffs to each other’s exports than countries elsewhere did, adding that non-tariff measures are ‘the chalk that clogs the trade pipes‘. Public-private dialogue was essential for identifying and reducing these measures, she said.

The new WTO Trade Facilitation Agreement would help tackle customs red tape, a major non-tariff barrier in Africa especially for small and medium-sized enterprises, Ms. González said. She highlighted ITC’s support for over forty countries to categorize their future WTO trade facilitation commitments, identify those requiring technical and financial assistance, and prepare bankable projects for implementation with donor backing. Implementing trade facilitation measures in a coherent manner at the level of the regional economic communities would yield the highest benefits in terms of fostering trade, she said.

In closing, Ms. González congratulated ministers for their plan to launch the Continental Free Trade Area, and pledged ITC’s cooperation and support in their endeavours. She reminded them that the private sector – especially the SMEs that account for 95% of all firms – would be the true drivers of increased prosperity through trade and investment.

‘Building SMEs and improving SME competitiveness, helping SMEs access finance and connect to markets will be essential to help them grow through trade,’ she said.