Staff Writer
According to the International Monetary Fund, the success of intra-African trade depends on a robust policy environment that guarantees macroeconomic stability and fosters a favorable business environment.
This information was presented in a report by the IMF titled “Trade Integration in Africa: Unleashing the Continent’s Potential in a Changing World.”
The report states that empirical analysis reveals that, in conjunction with significant improvements in the trade environment, a reform agenda aimed at implementing AfCFTA plans to reduce both tariffs and Non Tariff Measures has the potential to significantly increase Africa’s intraregional and overall merchandise trade.
According to the paper, the improvement of the overall business climate would stimulate services trade, which would then benefit from services trade liberalization.
According to the report, integration into GVCs would be supported by the AfCFTA’s implementation and an improved business climate.
It was further stated that it will present chances for enhancing manufacturing and obtaining economies of scale, fostering economic diversification, and enhancing economic dynamism.
Part of what it said was, “Furthermore, progress toward the objective of making the AfCFTA a deep trade agreement, including through regulatory alignment on the provision of goods and services, would open up new opportunities for trade.”
“All of these actions should be included in larger initiatives to remove long-standing integration obstacles, such as the use of import tariffs as import substitution or a significant source of revenue. These initiatives must be supported by a solid policy framework that guarantees macroeconomic stability and fosters an environment that is conducive to business.
The IMF stated that policymakers would need to go forward with the negotiation and implementation of Phase II of the agreement in order to establish the AfCFTA as a deep trade deal.
