Regional economic integration essential for AfricaFollow @MadeItInAfrica
Global changes have been accompanied by significant improvement in Africa’s prospects for growth and development. Africa is already the second fastest growing region in the world, after Asia. There has been significant and sustained growth across the continent in retail, agriculture, transport and telecommunication to name but a few.
Further opportunities will open up as economies diversify, expand and reach more people. Africa’s growth and development prospects are good, and Africa is poised to become the next frontier for global trade and investment. Never before has investor interest been focused on Africa and not only in extractive industries, but other sectors as well.
In order for Africa to capitalise on these important developments, it needs to put a concerted effort in implementing regional economic integration. Individually, African economies are too small to attract the necessary investment that can spur growth. Regionalism offers opportunities that have profound political, economic and social implications for Africa and its people. This is the underlying reason that African countries and their regional economic communities are pursuing the process of economic integration. Regional economic integration would reduce costs for trade in goods and services, promote efficiency and economies of scale and most importantly, improve the quality and standard of living for Africans.
Trade is a major driving force behind economic development and is poised to improve the living standards and income of Africans. The South African Department of Trade and Industry (the dti) recognises the link between trade and economic development, and develops policies to promote economic development in South Africa and builds capacity to this extent on the African continent. the dti promotes trade within Africa both through its bilateral and multilateral work and through its commitment to NEPAD and regional economic integration.
The Tripartite Free Trade Area (TFTA) launched on 12 June 2011 represents opportunities of a larger market comprising 26 countries with a combined population of nearly 600 million people and a total Gross Domestic Product (GDP) of approximately US$1.0 trillion.
The Tripartite initiative is a decisive step to achieve the African vision of establishing the African Economic Community envisioned in the Lagos Plan of Action and the Abuja Treaty of 1991. These have facilitated the harmonisation and coordination of policies and programmes of Regional Economic Communities (RECs).
The main benefit of the TFTA is a much larger market, with a single economic space, than anyone of the three Regional Economic Communities (RECs) alone. An enlarged market would attract interest from investors to establish production capacity within the region resulting in increased market opportunities for the trade in goods and services produced within the Free Trade Area, thus stimulating increased industrialisation, production, employment, income generation and poverty reduction. Importantly, it also offers the opportunity to improve economies of scale and efficiency, thereby improving Africa’s competitiveness both in its own markets and globally.
Regional integration will bear fruits if market integration is combined with trade infrastructure and industrial development. Africa’s future lies in its ability to increase its production base, trade with itself, and its ability to integrate into the globally market.
For information contact:
Ms Bharti Daya
Tel: 012 394 3119