Trade and Industrial Development
Agenda 2063 places great import in the role that trade plays in developing economies and recognises that trade is a powerful engine for economic growth and development. In Africa barriers to trade have resulted in a fragmented regional economy that has overtime positioned Africa’s role in the global trade market as fundamentally being a raw material (commodities) suppliers in exchange for manufactured goods, and rendering the continent’s share in global trade insignificant. The challenges arising from continually fluctuating commodities prices and Africa’s limited value addition to its natural resources renders Africa vulnerable to the external shocks derived from export dependency.
Within framework of Agenda 2063, the AU has developed continental frameworks and flagship projects aimed at adding value to Africa’s commodities, reducing and removing barriers to intra-African trade and creating a larger market for African goods and services amongst its population of over one billion people. The AU initiatives in the trade sector are seen as key to inducing investments and pooling of African resources to enhance structural transformation and the development of regional value chains, boosting employment opportunities; increasing food security through reduction of trade barriers on agricultural products and increasing the competitiveness of African industrial products through harnessing the economies of scale of a continental wide market.
The Agenda 2063 flagship initiative the African Continental Free Trade Area (AfCFTA) refers to a continental geographic zone where goods and services move among member states of the AU with no restrictions. The AfCFTA aims to boost intra-African trade by providing a comprehensive and mutually beneficial trade agreement among the member states, covering trade in goods and services, investment, intellectual property rights and competition policy. Other continental frameworks include Boosting Intra African Trade (BIAT) which aims to deepen Africa’s market integration and significantly increasing the volume of trade that African countries undertake amongst themselves from the current levels of about 10-13% to 25% or more within the next decade and The Action Plan for the Accelerated Industrial Development of Africa (AIDA), which aims to mobilise both financial and nonfinancial resources and enhance Africa’s industrial performance.
To ensure better management of its commodities and natural resources for the benefit of Africa’s people and to drive economic growth the Agenda 2063 continental Commodities Strategy aims to identify, formulate and drive the implementation of policies and programmes that will enable African countries to add value, extract higher rents from their commodities, integrate into global value chains and promote vertical and horizontal diversification anchored in value addition and local content development. The strategy envisions a commodity-led industrialisation which focuses on developing Africa’s commodities as a driver for achieving the structural, social and economic transformation of the continent.
The African Mining Vision (AMV) is the AU framework which aims to promote transparency, social responsibility and tax compliance in the extractive industry. The AMV calls for the “Transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development.”
The Department of Trade and Industry leads the efforts to promote trade within Africa and enhance its contribution to global economy.