Pedro made these remarks at the recent conference of African Ministers of Finance, Planning, and Economic Development held in Addis Ababa. He emphasized that the AfCFTA not only serves as a development framework but also as a powerful political platform. He noted that a prosperous Africa offers a significant market for global businesses.
The conference, which was themed “Advancing the Implementation of the Agreement Establishing the African Continental Free Trade Area: Proposing Transformative Strategic Actions,” saw Pedro address Africa’s economic challenges. He underscored the need for the continent to overcome the limitations of small, fragmented economies inherited from colonial rule in order to realize its full economic potential. He further described the AfCFTA as the culmination of more than six decades of persistent efforts towards regional and continental economic integration.
Currently, about 85% of Africa’s total exports are directed to the global market, primarily consisting of primary commodities, which account for over 60% of the total. In contrast, intra-African trade, although still limited, is more diversified and dominated by industrial products. Pedro believes that the AfCFTA will be a transformative force in shifting these dynamics.
Pedro also shared findings from the ECA’s latest empirical assessment, which suggests that reducing tariffs and non-tariff barriers within the continent, as envisioned in AfCFTA’s framework, could increase intra-African trade by 45% by 2045. This growth is expected to be most significant in the agrifood and industrial sectors, offering new opportunities for Africa’s industrialization, food security, and product complementarity.
As part of AfCFTA’s implementation, the ECA has projected that $411 billion will be needed for transport infrastructure, including $4 billion for 135 vessels, $25 billion for 243 aircraft, $36 billion for 169,000 rail wagons, and a staggering $345 billion for over 2.2 million trucks. Pedro noted that investments in railway infrastructure and fleets could boost intra-African trade by rail from less than 1% today to nearly 7%, representing a 5.5% increase.
Despite the immense potential, Pedro pointed out that the lack of sufficient information and awareness about the AfCFTA remains a key obstacle. He stressed that realizing the full benefits of intra-African trade will require greater awareness and active engagement from the private sector.
