Africa enters 2022 with a long and urgent to-do list. In this blog, Adedeji Adeniran joins other experts to outline key political, economic, security and health issues the continent must contend with as it maps its COVID-19 recovery and post-pandemic reality.
TRADE
Africa remains underrepresented in global trade, accounting for 2.19% of global exports and 2.85% of global imports in 2020. The African Continental Free Trade Area (AfCFTA) can reverse this trend if it is effectively implemented. Launched in January 2021, the agreement is a crucial step towards boosting regional trade and economic development, but full trading activity is yet to commence due to ongoing negotiations on various protocols.
Concluding negotiations on the agreement on rules of origin (the “legal provisions used to determine the nationality of a product in the context of international trade”) and protocols on trade in e-commence and services is a priority. While these are unavoidably complex, the strain on economic growth due to COVID-19 necessitates the acceleration of the AfCFTA.
The newly launched Pan-African Payment and Settlement System (PAPSS) holds potential: the platform, developed by Afreximbank and the AfCFTA Secretariat, is expected to bolster intra-African trade by facilitating simpler and secure cross-border payments and reducing payment transaction costs by $5 billion annually. The African Trade Gateway, AfCFTA Adjustment Facility and Trade Finance Facility are also expected to take off, making 2022 a promising year for the effective operation and success of regional economic initiatives. However, it will take much longer for the continent to fully recover from the economic shocks of the pandemic.
