1. Macroeconomic Policy questions, Trade and Regional Market Integration: Presentation to the 2nd Committee Dialogue
Ms. Vera Songwe,
Executive Secretary
Economic Commission for Africa

2. Regional Growth Rates Africa’s growth is expected to decline slightly to 3.6% in 2018
Africa’s growth trajectory has been a roller coaster in the past decade. However, supported by strong domestic demand and relatively strong commodity prices; growth prospects are brighter for the year 2018 and 2019
The slow growth in Africa’s largest economies of Angola, Nigeria and RSA has weighed significantly on the continent’s growth.
SOURCE: UNDESA 2018

3. Sub-regional Growth Rates East Africa is expected to achieve the highest growth
Supported by strong domestic demand and relatively strong commodity prices;
However, slow growth in Africa’s largest economies of Angola, Nigeria and RSA has weighed significantly on the continent’s growth.
SOURCE: UNDESA 2018

4. The savings – Investment gap is widening
SOURCE: Calculations based on World Bank 2018 data

5. Current account and fiscal balances have mainly been affected by external factors
The economic crisis and the decline in commodity prices seem to have a significant negative effect on the current account and fiscal deficits
SOURCE: Calculations based on EIU 2018 data

6. Total debt, external debt and debt service are on the rise again
Due to increased borrowing to fund some investments e.g. infrastructure.
SOURCE: Based on IMF 2018

7. But the debt story is not the same for all African countries (2015 – 2017 Averages)
30%
Due to increased borrowing to fund some investments e.g. infrastructure.
SOURCE: Based on IMF 2018

8. Tax-GDP has been declining: There is room to mobilise more domestic resources to address fiscal challenges, and to finance SDGs
African has an average Tax to GDP ratio of While a number of countries are closer to average, there are also significant disparities ranging from 4.6 percent in Nigeria to 34 percent in Lesotho. Average Tax-GDP-Ration on the continent has been declining and has generally not recovered to pre-2012 levels. The hardest hit countries have been mostly commodity exporters. Not withstanding, there is significant room for raising domestic revenue, especially for middle income countries.
SOURCE: IMF data REO Data

9. Opportunities in Trade and Regional Integration: Compared to other regions, Africa currently trades less with itself
Intra and extra-group merchandise for selected regions (percentage, average )
Eliminating tariffs and removing non-tariffs barriers, such as cumbersome border procedures and significant infrastructure bottlenecks is critical in critical to addressing this. This is precisely the overarching objective of the recently signed Agreement Establishing the African Continental Free Trade Area (AfCFTA), which is championed by the African Union Commission (AUC) and the eight Regional Economic Communities (RECs).
Source: Based on data from UNCTADStat ( accessed on 27/08/2018

10. Opportunities in Trade and Regional Integration: Africa trades with itself more on manufactured goods than on primary commodities
Intra-African Exports as a share of total exports: primary commodities and manufactured goods (percentage, 2012─2016)
Source: Based on data from UNCTADStat

11. Africa trades with itself more on Non-Extractive (mostly manufactured goods) than with the Rest of the World
Structure of Intra-African exports compared to exports to the Rest of the World

12. The importance of the AfCFTA for Africa’s growth, trade and regional integration
ECA has been and will continue to be strongly engaged in the AfCFTA processes.
It is estimated tariff elimination on goods under AfCFTA could increase the share of intra-African trade between 40% to over 50%.
The increase would be much larger if liberalization of trade in services and non-tariff barriers were to be tackled within Africa.

13. The importance of the AfCFTA for Africa’s growth, trade and regional integration
In 2015, African countries spent about US$63 billion on food imports, largely from outside the continent.
ECA projects that under AfCFTA, intra-African trade in agricultural products will be between 20% and 30% higher in 2040.

14. Inclusive Development
AfCFTA also offers a platform for continental cooperation and progress in other areas
Inclusive Development
Job creation
Infrastructure
Impetus of regional energy and infrastructure projects
Digital Economy
Opportunity for MSMEs who constitute 80% of African businesses

15. ECA is also leveraging AfCFTA momentum for Digital Identification on the continent
Continental
Digital ID Framework
E-commerce
Interoperability
Data Governance
Inclusion

16. Cooperation for Domestic Resource Mobilization
ECA will partner with OECD on the The Global Forum on Transparency and Exchange of Information for Tax Purposes where:
countries commit to tackle tax-related IFFs related through Exchange of Information (EOI) and improved international tax cooperation.
Only 27 African countries are members of the Global Forum
Only 20 have signed the related Yaoundé Declaration

17. THANK YOU!