Digitalisation imperative to trade competitiveness, cross border e-commerce participation – ECA 

The United Nations Economic Commission for Africa (UNECA) has said digitalisation is key in maintaining trade competitiveness and enabling effective participation in cross border e-commerce.

Mr Stephen Karingi, UNECA Director, Regional Integration and Trade Division, said this while presenting a report at the 39th Committee of Experts meeting.

The meeting was on the sidelines of the commission’s ongoing 53rd session of the Conference of African Ministers of Finance, Planning and Economic Development.

The report was on the assessment on the progress made on regional integration in the context of the COVID-19 pandemic.

Karingi said the report findings had revealed that COVID-19 had severely disrupted the implementation of regional integration initiatives.

This included the African Continental Free Trade Area (AfCFTA), particularly trade through national border closures.

“Implementation of regional integration continues to be hampered by governance, peace and security challenges.

“Digitalisation is key in maintaining trade competitiveness and enabling effective participation in cross border e-commerce.”

The director noted there was a rise in intra-African trade before the pandemic, but compared to other regions, it remained low.

“Trade, economic movement of people and services, infrastructure, governance, peace and security are the key pillars of regional integration.”

He added that many countries were doing a lot to implement the AfCFTA.

“Peace and security create environments conducive to the pursuit of regional integration and the attainment of broader continental development objectives.”

The report showed that in 2018, Africa accounted for only 2.6 per cent of global trade which is a slight increase from 0.2 per cent from 2017.

Also, it revealed that intra-African trade increased to 16.1 per cent in 2018 ($159.1 billion), up from 15.5 per cent in 2017.

It showed that though progress continued in the continent’s regional integration agenda throughout the eight Regional Economic Communities (RECs), challenges to the achievement of deeper integration remained.

It noted that most RECs and member states were struggling to achieve progress in the area of productive integration.

The director said that progress on integration was uneven, adding the free movement of people was critical for the realisation of the AfCFTA.

Karingi also said productive integration was the poorest performing dimension of regional integration in all the RECs.

“Most of the communities are lagging in terms of intra-regional intermediate exports and imports, and are recording a very low merchandise trade complementarity index.

He added that productive integration was central to enhancing industrialisation and trade.

“Productive integration is also critical to integrating African economies into regional value chains and global value chains, as envisioned in Agenda 2063.”

According to the report, the Arab Maghreb Union (AMU) and East African Community (EAC) are taking the lead in productive integration, with index scores of 0.449 and 0.434, respectively.

The report stated that ECOWAS, however, is the least integrated regional bloc in the productive integration dimension, with an index score of 0.220.

Economic Community of Central African States (ECCAS) and EAC are the highest-performing communities in terms of macroeconomic integration, with scores of 0.684 and 0.660, respectively, on the index.

The director, however, said the ECA would continue to support RECs in mainstreaming and boosting intra-African trade in its programmes and policies.

He noted that the commission would build on the collaborative work on regional industrialisation, as initiated in SADC and ECOWAS.

He added that the commission would broaden its capacity-building programme on the use of macroeconomic and forecasting models in economic planning and development, to empower member states and RECs.

According to him, the commission will support the AfCFTA ratification drive and implementation, including through awareness-raising programmes and developing national implementation strategies.