Enhanced trade flows between Africa and the Arab World could significantly elevate their share of the global market, said ECA Deputy Executive Secretary and Chief Economist Abdalla Hamdok recently Cairo at the 100th session of the League of Arab States Economic and Social Council.
“Deepening regional integration between Africa and the Arab world, beyond their own mega-regional trade agreements (CFTA and GAFTA), looks very promising, as far as supporting their countries’ diversification and structural transformation efforts are concerned, [and] could contribute to elevating the standing of Africa and the Arab world on the world trade landscape”, said Hamdok.
Presently, 6.5% of Africa’s exports benefit the Arab world and 5.3% of the Arab World’s target African markets. Trade between African and Arab economies has increased considerably over the past decade and is expected to keep growing. When looking at the composition of traded goods and exchanges, we realise that trade between both regions tends to be more diversified and have stronger industrial content than their exports to the rest of the world, added Hamdok.
In a global context characterized by slow economic recovery, growing protectionism and uncertainties that can weaken recovering economies and impact global development-friendly trade agreements, it appears that trade between Africa and the Arab word offers many opportunities.
“While regional integration and trade alone do not provide a solution to current economic challenges, these undoubtedly offer means and opportunities to unlock progress, industrialization and better integration into regional and international markets. Unleashing the potential of African and Arab countries, diversifying economies and providing women and men with decent economic opportunities will lead to building improved lives and to more inclusive and resilient societies”, said Hamdok.
Africa, which had to diversify its economies following the collapse of commodity prices, has become a driver of global growth and home to four of the ten best performing economies in the world (Côte d’Ivoire, Tanzania, Rwanda and Djibouti). According to ECA studies, the successful establishment of a Continental Free Trade Agreement in Africa would see intra-regional trade rise to 22 per cent of total African trade and would add approximately USD 1 trillion to the global economy.