A greener African Continental Free Trade Area (AfCFTA) can be achieved if governments on the continent adopt proactive environment-friendly policies and enforce environmental standards, a trade economist said today at an event organized by The Economic Commission for Africa and the Overseas Development Institute (ODI).
Maximiliano Mendez-Parra, a senior researcher at the ODI gave the advice today during a webinar jointly organized by the African Trade Policy Centre (ATPC), a unit of the ECA, and the ODI on the sidelines of the annual Conference of African Ministers of Finance, Planning and Economic Development.
“Trade in Africa will play a decisive role in the continent’s transformation and climate change action should not restrict it,” Mendez-Parra said at the virtual event on building back better through greening the AfCFTA. Instead, in itself, “the AfCFTA can increase resilience to climate change,” he said.
Under the trading bloc which commenced transactions on 1 January this year, he said opportunities abounded to produce environment-friendly goods and services liberalization, harmonize and strengthen environmental standards, incentivize and facilitate the diffusion of green technologies as well as promote and facilitate green investment. Despite the opportunities, Mendez-Parra identified what he called “significant roadblocks” constituting barriers to climate action such as limited understanding of climate risks, lack of supportive policies, and finance.
While it contributesthe least amount to the global greenhouse gas emissions, Africa bearsthe largest impact, a fact not lost on panelists at the session, including Fatima Denton, Director of the Institute for Natural Resources in Africa at the United Nations University (UNU-INRA). Others were Juliette Koudenoukpo, Director and Regional Representative for Africa, United Nations Environment Programme (UNEP); Robert Hamwey, Economics Affairs Officer, UNCTAD; and Dominic McVey, an ODI Director. ATPC Coordinator David Luke moderated the event.
The webinar was part of a wider partnership between ECA and ODI to assess the trade and climate change nexus in the context of the AfCFTA. The partnership includes two dedicated research publications on “Mapping the climate and trade nexus in a context of economic fragility” and “African trade strategies in a climate constrained world”. This research is expected to help support advocacy efforts for mainstreaming climate change considerations within the remaining AfCFTA process, including phase II and III negotiations, national-level implementation, and inform a common African position on discussions at the World Trade Organization (WTO).
The AfCFTA provides an opportunity for Africa to create the world's largest free trade area with the potential to unite more than 1.2 billion people with a gross domestic product of more than $2.5 trillion which is expected to usher in a new era of development. Trading under the pact commenced on 1 January this year after a postponement for six months as a result of the COVID-19 pandemic. The ECA, through ATPC, works with the African Union Commission (AUC) and member states of the AU to deepen Africa's trade integration and effectively implement the agreement through policy advocacy and national strategy development, with the financial support of the European Union (EU).