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“Upgrading Africa’s participation in global value chains requires international rules to evolve”

December 2015

Acyl, F.H., Ramdoo, I. 2015. Upgrading Africa's participation in global value chains requires international rules to evolve. GREAT Insights Magazine, Volume 4, Issue 6. December 2015/January 2016.

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H. E. Mrs. Fatima Haram Acyl, AU Commissioner for Trade and Industry speaks to ECDPM’s Isabelle Ramdoo, Deputy Head of Programme Economic Transformation and Trade.

Isabelle Ramdoo: As world trade leaders converge this week to Nairobi for the 10th WTO Ministerial Conference for the first time on the African continent, what are your expectations for this meeting? What are the key priorities that the African Union will put on the table and how do you see the multilateral system responding to this?

Fatima Haram Acyl: I think we have very high expectations for this meeting, being the first WTO Ministerial to be hosted by an AU member state. We expect the Ministerial to be a great success in all aspects. Substantively, we also expect a Ministerial that will deliver on some of the expectations of the Doha Development Round of negotiations. We believe that addressing how the multilateral trading system can contribute to development is critical to the long term success as well as the commitment of developing countries to the system. There are no viable alternatives to multilateralism in the long run, that is why African countries remain committed to seeing the WTO work and to ensuring that it delivers on its potential as a catalyst for development. The Doha Development Round of negotiations is very instrumental for this. Consequently, the 10th WTO Ministerial Conference comes at a pivotal time on the world stage, and we expect WTO members to rise up to the challenges with outcomes that are favourable to everyone.

The year 2017 will mark a key milestone for Africa’s trade agenda with the launch of the Continental Free Trade Area (CFTA). How do you assess the progress made so far by various Regional Economic Communities (RECs) building towards the CFTA and what is expected in 2016?

The RECs have made significant progress in their individual integration agenda, as building blocks for the continental integration agenda. Of course, we have celebrated examples like the East Africa Community (EAC), who is working on the establishment of their common market, having made great strides in the implementation of their customs union. You also have RECs like Economic Community Of West African States (ECOWAS) which offers an invaluable example of what can be done with regards to the free movement of people in a REC, as well as cooperation on a number of issues. But across the board, virtually every REC has made substantive progress over the past few years, giving the CFTA a firm foundation to stand upon. Last but not least, the recent signing of the Tripartite Free Trade Agreement between countries of The Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the EAC shows that these RECs are ready to scale up the successes made at the regional level. In 2016, we expect a gradual intensification of the negotiations towards the CFTA, as we continue to work to meet the 2017 deadline for the completion of the negotiations that has been laid down by African Heads of State. It will be a tough but doable process, and we are happy to acknowledge the commitment and desire of AU member states to seeing it done. 

Industrialisation is a major priority for the African continent to create business and employment opportunities, in particular for the rising youth. Where do you see major opportunities and what according to you, are the challenges that countries and regions need to overcome and achieve results?

I think the issues of challenges to Africa’s industrialisation have been over-flogged. We all know about our infrastructure gap, competitiveness challenges, capacity and innovation gaps as well as a number of other challenges to industrialisation on the continent. I will prefer therefore to focus rather on the opportunities for Africa’s industrialisation. First of all, it is important that African countries begin to see the continent as a priority market for their value added products. With the changes in the continent’s demography and the rising incomes across the continent, the African market can drive the continent’s growth and industrialisation. And that is why initiatives such as the CFTA are critical. There is also a renewed sense of purpose and confidence that it is indeed possible to have structural transformation on the continent. This confidence is reflected in the AU initiatives adopted, such as the Agenda 2063, which outlines long term visions and objectives for the continent’s structural transformation.

It is often said that many African countries have not been able to upgrade their participation in global value chains, despite the fact that they paradoxically are an important source of input for sophisticated products. What role do you see for international cooperation in trade and investment to address this weakness and what are your plans to drive such an agenda in a sustainable way?

Everybody accepts the importance of having African countries upgrade their participation in global value chains. The main challenge, as you have alluded to, is how this can be done. I believe that international cooperation in trade and investment is of particular importance in this regard. We believe that multilateral trading rules should recognise the imperatives for African and other developing countries for upgrading their participation in global value chains and that the rules should be evolved in such a way as to address this objective. In addition, initiatives such as the African Growth and Opportunity Act (AGOA) by the US and the Economic Partnership Agreements (EPAs) with the EU should be implemented in a flexible and targeted manner towards achieving this outcome. The AU continues to be a champion for this agenda, through the continental initiatives adopted by African leaders that address the issues, such as the Africa Mining Vision (AMV) and the Accelerated Industrial Development in Africa (AIDA), as well as the Action Plan for Boosting Intra-African Trade (BIAT) and CFTA. We will continue to advocate and champion engagement with our partners in this regard. The AU will also continue to be a platform for countries to collaborate and exchange best practices as they seek to add value to their raw materials and move up the global value chains.

This article was published in GREAT Insights Volume 4, Issue 6 (December 2015/January 2016).




Economic recovery and transformationTradeValue chainsAfrica