Zambia and other African countries have been cautioned not to fall into more debt as they participate in the African Continental Free Trade Area (AfCFTA) meant to boost Africa’s trading position in the global market.
Much as the AfCFTA presents numerous trade opportunities for countries, it also has potential to push African countries into more debt as they need more resources for industrialisation.
This is according to the African Forum and Network on Debt and Development (AFRODAD) Policy, Advocacy & Research Manager, Theophilus Yungong Jong.
The AfCFTA agreement is expected to create the largest free trade area in the world measured by the number of countries participating.
The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion.
Jong, however indicated that the agreement had potential to push African countries into more debt as they struggled to be part of it.
He said this during a presentation on “Africa’s Evolving Debt Landscape: From Heavily Indebted Poor Countries (HIPC) to G20 Common Framework” at the third edition of the AFRODAD media workshop in Accra, Ghana on Thursday.
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“Trade provides us with an opportunity, the agreement has a debt implication. Countries will have to mobilise resources and trade with each other, but let us also take note of the fact that for us to have this agreement we will need more resources,” he said.
Jong therefore, emphasised the need for African countries to be cautious as they became part of the AfCFTA while pushing for the transformation agenda.
“Africa must come up [ with] resources to drive such transformation, we need a coordinated approach to overcome this. For us to have this AfCFTA , we need more resources and this might push the countries into more debt,” he said.
The AfCFTA is a free trade area encompassing most of Africa, with 43 parties and 11 signatories to the agreement that established it in 2018.
It is one of the flagship projects of Agenda 2063, Africa’s development framework, approved by the African Union (AU).
The AfCFTA aims to accelerate intra-African trade, boost Africa’s trading position in the global market, and bring millions of people out of poverty.
Meanwhile, Jong regretted that negotiations for G20 framework by African countries had stalled.
So far, only for African countries which are: Zambia, Chad, Ethiopia and Ghana had made progress on the G20 framework.
“We are now at the G20 common framework and so far only four African countries have signed up for that and these are Zambia, Chad, Ethiopia and Ghana. So the progress has really been slow. The process is supposed to be expedited to made faster but I think we are in the fourth month and there has not been much progress,” he said.
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