NAIROBI, July 2 (Xinhua) -- Poor infrastructure and insufficient funding could be the biggest obstacles to the effective implementation of the African Continental Free Trade Area (AfCFTA) agreement, an expert told Xinhua in a recent interview.
Gerrishon Ikiara, senior economics lecturer at the University of Nairobi, said that lack of available financing and the continent's under-developed infrastructure are the major limitations for realizing the full impact of the free trade area in Africa.
Global ratings agency Moody's warned in a report in March 2018 that African continent's trade financing gap amounted to 90 billion U.S. dollars annually, limiting the trade potential in Africa.
Ikiara, who was also former permanent secretary in Kenya's Ministry of Transport, told Xinhua that infrastructure is the key to boosting African growth and China-proposed Belt and Road Initiative is thus very important to AfCFTA's accomplishments as the initiative aims to improve cross-border infrastructure.
"Getting alternative sources of financing is not easy for Africa", said Ikiara who undertook Kenya's several big transport projects while in the transport ministry. "China has helped to meet some of Africa's infrastructure financing needs.
Ikiara said Africa is to launch the operational phase of the AfCFTA on July 7 in Niamey, the capital of Niger where leaders of African Union (AU) states will hold an extraordinary summit on the AfCFTA.
In March 2018, 44 AU members in Kigali, Rwanda signed the landmark trade agreement AfCFTA, committing to remove tariffs on 90 percent of goods, progressively liberalize trade in services, and address a host of other non-tariff barriers.
According to the AU, the AfCFTA pact, which went into force on May 30, has laid the foundation for creating a single African market and the world's largest free trade zone by the number of participating members, covering more than 1.2 billion people with a combined gross domestic product of 2.5 trillion U.S. dollars. As of the end of June, there were 25 AU members who have already deposited instruments of ratification for the AfCFTA.
Data from the UNCTAD showed that the share of intra-African exports as a percentage of total African exports stood at 17 percent in 2017, far lower than the 69 percent in Europe and 59 percent in Asia.
AfCFTA is expected to be a game changer for stimulating intra-African trade. According to modeling results by the Economic Commission for Africa (ECA), through the sole removal of tariffs on goods, the AfCFTA is projected to increase the value of intra-African trade by between 15 percent (or 50 billion U.S. dollars) and 25 percent (or 70 billion U.S. dollars) in 2040, compared to a situation with no AfCFTA in place. (Contributed by Ding Lei)
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