Aid for Trade: African Perspectives

Aid for Trade: African Perspectives by Dr. Cornelius T. Mwalwanda Principal Advisor and head United Nations Economic Commission for Africa (ECA) Geneva Advisory Services

Outline of Presentation
Background
Aid for Trade Africa Regional Review
Priorities from regional breakout sessions.
Cross-cutting issues with respect to Africa
Roadmap for Africa in Aid for Trade

Background
Africa as a region remains at the margins of the world economy and global trade
Africa’s share of world output is still marginal and it’s share of world trade still below 2%
Millions of Africans still live below the poverty line (at less than $1.00 per day)
Achieving the Millennium Development Goals (MDGs) could up lift millions from poverty

Background (Continued)
Despite recent impressive growth rates, the continent still lags behind other regions
The need to integrate African economies into the global economy and trading system becomes an imperative
Raising Africa’s competitiveness and reducing transactions costs are essential for integration in the global economy
Africa can benefit from globalization and the opportunities generated
Aid for Trade an be an important catalyst

Aid for trade Africa Regional Review
The Dar review was organised by UNECA, ADB, WTO and Government of Tanzania.
Broad participation.
34 African Ministers of Finance and Trade.
Key donors and international agencies.
Private sector.
More than 400 participants.

Key issues Discussed
Integration to global economy a central objective.
Will generate necessary resources for social priorities.
Small size of national and even sub-regional markets make international trade indispensable.
While indispensable, openness not sufficient.
Stronger supply-side capacities; lower trade “costs”; improved connectivity to markets needed.
“ Internal barriers” such as poor infrastructure, inefficient customs, unreliable supply chains; high energy costs impede competitiveness at the factory floor.

Key Issues Discussed (continued)
Africa needs access to modern “infrastructure” for transport; customs; and standards testing labs.
Regional approaches critical to optimal results.
Political leadership and commitment the key.
International community should play supporting role

Regional Breakout Sessions
Regional integration critical to Africa trade growth.
Discussions centered on case studies from 6 RECs (COMESA, EAC, SADC, ECOWAS, ECCAS, UMA) .
That supply-side constraints were regional in nature was underscored due to smallness and landlockness.
Benefits of regional approaches identified in:
infrastructure, capacity projects, planning mechanisms and financing.

Regional Breakout Sessions West and Central Africa Selected Issues
High trade costs, weak institutions and fragmented infrastructure key obstacles.
But region has on-going liberalisation and integration initiatives including in NEPAD context.
Investment climate not optimal for business – dialogue needed between gov’t and private sector.

Regional Breakout Sessions: West and Central Africa Priorities
Human and institutional capacity building including of RECs.
Infrastructure development especially transport and utilities.
AFT should build on what has been identified already as much as possible.
Assistance with adjustment costs of liberalisation.

Regional Breakout Sessions: Eastern and Southern Africa Selected Issues
Region has comprehensive programs e.g. the North-South Corridor Initiative encompassing trade facilitation, and connectivity infrastructure.
Challenge: Mobilizing adequate implementation resources.
Private sector needs to be more involved in prioritization.

Regional Breakout Sessions: Eastern and Southern Africa Priorities
Trade facilitation.
Transport infrastructure.
Deepening of regional integration to overcome constraints of small and landlocked markets.

Regional Breakout Sessions: North Africa Selected Issues
Regional integration not deep enough – low intra-UMA trade for instance.
Connectivity between members in terms of infrastructure and utilities unexploited.
Need to use more regional approach to cross-border projects.

Regional Breakout Sessions: North Africa Priorities
Trade facilitation.
Optimization of energy resources
Improvement of telecommunications and transport infrastructure.
Strengthen UMA human and institutional capacity.

Cross cutting themes
Country leadership.
Focus on regional projects.
Identify few key priorities.
Improve trade logistics.
Mobilize private sector.
Harness public private partnerships.
Leverage regional development banks.
Increase and improve financing.
Ensure coherence and cooperation.

Recommendations and Way Forward
ECA and ADB with WTO continue to raise awareness and understanding of AFT.
Africa should move to the next stage of prioritizing its trade needs emphasizing on regional.
Building on current RECs plans, countries and sub-regions develop AFT action plans.
ECA & AfDB lead in creation of an African Aid for Trade Network to help in developing action plans.
ECA and ADB to report regularly on progress in Africa with first report in autumn of 2008.

Concluding Remarks
Africa as a region needs Aid for Trade even more than any other region because of its capacity constraints
The burden of adjusting to trade reforms is more severe and pervasive in Africa, due to already existing low levels of income
African countries have identifies their priorities and the Aid for Trade should focus in supporting them

Concluding Remarks
The challenges ahead include how to transform what has so far been “goodwill” into concrete action
How to proceed to implement the Aid for Trade Initiative and mobilize resources
How to coordinate activities of various participating agencies and organizations
How to ensure “ownership” by the recipient countries of the Aid for Trade
ECA is committed to working with all those involved in the AFT for its success

Concluding Remarks
THANK YOU FOR YOUR ATTENTION

Aid for Trade: African Perspectives

by Euforic Services on Dec 10, 2007

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