ITC emphasizes the importance of technology in implementing AfCFTA

Rédaction Africa Links 24 with Guardian Nigeria
Published on 2024-02-19 05:16:27

The International Trade Centre (ITC) has emphasized the crucial role that technology will play in fully implementing the African Continental Free Trade Area (AfCFTA) initiative. It has urged governments in the region to prioritize the integration of technology to ensure the success of the trade agreement. ITC has forecasted that the AfCFTA could significantly increase the size of Africa’s economy to $29 trillion by 2050. The organization has identified the digital sector as a key driver of intra-African trade, emphasizing that services such as digital trading platforms and cross-border digital payment services will be essential for the practical success of the AfCFTA.

In addition to the economic impact, ITC has also highlighted the potential social benefits of the AfCFTA, projecting that it could increase the earnings of nearly 68 million people who make less than $5.50 per day and lift 30 million Africans out of extreme poverty. The initiative is expected to increase Africa’s GDP by $450 billion by 2035, while also raising global GDP by $76 billion. Furthermore, it is anticipated to increase African exports by $560 billion, leading to an increase in wages for both skilled and unskilled workers. ITC has estimated that stronger trade facilitation would account for $292 billion of the $450 billion in economic gains expected from the AfCFTA.

Despite the potential benefits, ITC has identified challenges related to the adoption and use of digital technologies in Africa. It has pointed out that the continent lags behind other regions in terms of Internet penetration, with only 40% of Africans using the Internet, compared to rates of 64% in the Asia-Pacific region, 83% in the Americas, and 89% in Europe. This lower penetration has been attributed to factors such as the high cost of Internet service, limited reach in rural areas, connectivity disruptions, and a lack of digital skills and literacy.

However, ITC has noted that efforts are underway to address these challenges, including initiatives focused on infrastructure development, training, and digital connectivity. The organization has highlighted the rapid uptake of Internet and digital tools in Africa, emphasizing that this trend is supportive of the goals of the AfCFTA. It also pointed to specific examples of how digital technologies can facilitate the successful implementation of the AfCFTA, such as through the AfCFTA Hub and the Pan-African Payment and Settlement System (PAPSS). ITC has suggested that the adoption, knowledge, and use of these platforms can enable IT and business process outsourcing (BPO) companies to better engage in digital trade on the African continent.

In conclusion, ITC’s emphasis on the importance of technology in implementing the AfCFTA reflects the organization’s recognition of the transformative potential of the trade agreement. By addressing the challenges related to digital adoption and promoting the use of digital tools, ITC aims to support the realization of the AfCFTA’s goals, which include enhancing regional markets and economies and boosting productivity across various sectors. The organization’s recommendations for integrating technology into the AfCFTA underscore the significance of leveraging digital advancements to unlock the economic and social opportunities presented by the trade agreement.