Non-tariff barriers remain threat to AfCFTA – World Bank Chief Economist

Chief Economist of the World Bank for Africa, Dr. Albert Zeufack

Although the African Continental Free Trade Agreement (AfCFTA)is touted to spur growth on the continent, a major challenge that will threaten the agreement is non-tariff barriers which include the infrastructural gap, Chief Economist of the World Bank for Africa, Dr. Albert Zeufack, has said.

The African Development Bank estimates that Africa’s infrastructure needs are between US$130 and US$170 billionper year. However, it adds, financing for this falls short by US$68billion and US$108billion per year.

It is for this reason that Dr. Zeufack is advising that even though the AfCFTA will do a lot to eliminate many tariffs to enhance trade, similar attention must be given to non-tariff barriers such as the infrastructural gap; or else the benefits cannot impact job creation on the continent.

“For the Africa Continental Free Trade Agreement to translate into future growth and job creation, there are at least three things that need to be done. The first is to ensure that we integrate or create regional value chains. The African market itself is 1.2 billion people, and can clearly be a huge source of growth within the continent.

“The second is for regional value chains to emerge…we need to address the issues of non-tariff barriers. The African Continental Free Trade Agreement has so far really made great strides in reducing tariffs barriers. But there are non-tariff barriers; there are infrastructure constraints that will prevent our countries from really reaping the benefits of that agreement and therefore creating the jobs,” he said during a media interaction via video conferencing to launch the 20th edition of the Africa’s Pulse report.

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He further stated that the third thing needed to be in place is for African governments to create systems which will enhance the free movement of people. This, he said, will drive growth in the services sector.

“Thirdly, the free movement of people is necessary for the agreement because that will drive growth in services. The service sector is one that will be creating a lot of jobs across Africa. But for that to happen, we need free movement of people,” he said.

The report

The Africa’s Pulse report says average growth in sub-Saharan Africa is expected to rise modestly, from 2.5 percent in 2018 to 2.6 percent in 2019 before improving to 3.1 percent in 2020 and 3.2 percent in 2021. On the demand side, the continued sluggish recovery in the region for 2019 reflects a slowdown in fixed investment amid heightened policy uncertainty.

On the supply side, it reflects a modest expansion in manufacturing and mining industries due to poor energy sector performance in some countries.

Regional growth is expected to pick up in 2020 as domestic demand strengthens, supported by a gradual recovery in investment. Stronger growth in non-resource-intensive countries is expected to offset a modest expansion among resource-intensive countries. Despite some improvements, the external environment is expected to remain difficult and uncertain for the region.

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