Africa Trade Competitiveness and Market Access: the EU partners with Africa to boost industrialization and economic integration on the continent
Building the blocks of a strategic EU-Africa economic partnership for growth
The European Union (EU) and the African Union (AU) are long-standing partners in the area of economic integration and trade. The launch of the African Continental Free Trade Area (AfCFTA) in 2018 represented a crucial milestone in the process of continental integration in Africa according to the objectives of the Agenda 2063. The AfCFTA is expected to create an integrated Africa market of 1.3 billion people across 55 countries with a combined GDP of about €3.18 trillion, making it the world’s largest single market for goods and services by number of countries.
To accelerate Africa’s structural and economic transformation under the AfCFTA, the continent needs to close an annual financing gap of $402.2 billion, according to the African Economic Outlook 2024. In this context, mobilizing finance at scale is key. This is why in 2021 the EU launched the Global Gateway, a value-based offer aiming to mobilize worldwide up to €300 billion of public and private investments in strategic sectors by 2027, half of which in Africa. It is the EU’s contribution to accelerate progress towards achieving the SDGs as well as the Agenda 2063 priorities.
Heads of State and Governments of the two Continents adopted the Joint Vision 2030 at the 2022 6th EU-AU Summit and committed to implement the Global Gateway Africa- Europe Investment Package along eleven priority areas such as transport infrastructure, renewable energy, connectivity, as well as health, education and skills. Economic integration is the cornerstone of this investment package.
The current process of economic integration in Africa brings ample opportunities to spur the continent’s industrialization by harmonizing trade policies, increasing cross-border flows and creating regional value chains. The EU is a staunch supporter of its implementation with a large-scale and comprehensive Team Europe Initiative, or TEI (€1.1 billion). This initiative includes more than 70 regional projects designed together with African partners which cover the relevant areas of trade integration.
The Africa Trade Competitiveness and Market Access (ATCMA) programme is central to this TEI. With a total amount of with €205 million and implemented by the International Trade Centre (ITC) and the United Nations Industrial Development Organization (UNIDO), it aims to boost market access, trade competitiveness and quality infrastructure for selected regional value chains in Africa.
The programme follows a holistic value chain approach that includes joint work with key continental and regional stakeholders, such as the African Union Commission (AUC), the AfCFTA Secretariat, and the African regional economic communities (RECs). The five regional economic communities involved in ATCMA are the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), the Economic Community of Central African States (ECCAS) and that of West African States (ECOWAS) and the Southern African Development Community (SADC). Therefore, ATCMA emphasizes the importance of coordination among different stakeholders and pays a particular attention to the central role of the RECs towards achieving continental integration.
ATCMA promotes green and sustainable growth in Africa, while creating economic opportunities especially for women and youth.
It builds on the joint EU-AU cooperation in the framework of the ‘Made by Africa – Creating value through integration’ diagnostic implemented by ITC. The ‘Made by Africa’ diagnostic identifies three priority value chains with high development potential on the continent: the battery ecosystem (which includes e-vehicles), formulated complementary foods, and pharmaceuticals. The aim is to develop operational roadmaps for the creation of pilot projects for these three regional value chains.
The EU is actively collaborating with UN partners, including ITC, to implement the Global Gateway Africa-Europe Investment Package in line with the needs of African partners with tangible, inclusive and high-return impact.
To date, working together with ITC and through the AU, the EU has supported over 25,000 small businesses to trade in Africa, the Caribbean and the Pacific.
The ambition of ATCMA is to boost the capacities of African micro, small and medium-sized enterprises (MSMEs) to be competitive in key value chains, and to strengthen and connect business support organizations (BSOs) across the continent. The operationalization of continental and regional value chains in Africa should foster the pivotal role played by the African private sector, with many opportunities arising for European businesses and EU-Africa trade as well.
Through key initiatives such as ATCMA, the EU is actively supporting Africa in developing its trade potential and growth opportunities through innovation, value-addition and job creation.
