The outbreak of Covid-19 remains a barrier to the implementation of an Africa-wide free trade agreement, but the political will remains to complete a deal that is key to the continent's economic revival, according to the secretary-general of African Continental Free Trade Agreement (AfCFTA).
“Covid-19 has been a barrier,” Wamkele Mene told a Bloomberg web event on Tuesday. “However, the political will remains, the political commitment remains and when the conditions are conducive, Africa will be back on track.”
Africa, which lacks the financial muscle to roll out trillion of dollars in fiscal stimulus, needs an agreement to reboot economic growth. The majority of the continent's 55 countries are either in full or partial lockdown to stem the spread of Covid-19, which has infected about 9 million people worldwide and killed more than 472,000, according to Johns Hopkins University.
The pandemic brought economic activity to a grinding halt as authorities closed borders and shut all-but essential businesses. The global economy is set to slide into the deepest recession since the Second World War. Earlier this month, the Organisation for Economic Cooperation and Development said global output will contract 7.6 per cent this year without a vaccine.
The World Bank expects global output to shrink by 5.2 per cent, while the IMF said last week that it expects to cut its April forecast of a 3 per cent contraction when it releases its latest projections on Wednesday.
Governments and central banks have poured about $10 trillion (Dh3.67tn) into global economies to stabilise financial markets and cut job losses. Individual African nations have rolled out their own stimulus packages, which are far smaller than those in larger economies.
“We will redouble our efforts to implementing the [free trade] agreement as unlike many other countries in the world, Africa desperately needs this agreement to be the driver for [economic] recovery,” Mr Mene said. “We don’t have stimulus packages of trillions of dollars. The economic recovery plan for us is to significantly boost intra-Africa trade from 2021 year-on-year.”
Mr Mene in April announced a delay to the implementation of AfCFTA, which was due on July 1. The agreement, the biggest free trade agreement in the world, aims to bring about 1.3 billion people into a single market and could pave the way for fresh foreign direct investment into the continent.
Asked if the implementation could be delayed beyond 2020, the secretary-general said governments across the continent were co-ordinating their response to the pandemic.
“We have managed it with a high degree of success, of course, we have the experience of dealing with infectious diseases,” he said. Policymakers will continue to work on the implementation framework, while governments adhere to advice from health experts, he added.
Africa, regarded as the world's last growth frontier, is home to major economies such as South Africa and Opec members Nigeria, Gabon, Algeria and Angola. African nations present huge investment opportunities in sectors including power, renewables, healthcare, education, agriculture, industries, logistics zones and infrastructure.
