Harare – A green African Continental Free Trade Area (AfCFTA) can be achieved if governments adopt proactive environment-friendly policies and enforce standards, a trade economist has said.
Senior researcher at the Overseas Development Institute (ODI) Maximiliano Mendez-Parra said this during a webinar jointly organised by the African Trade Policy Centre (ATPC), a unit of the ECA, and the ODI, as part 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.
Under the trading bloc – operationalised on January 1, 2021 – he said opportunities abounded to produce environment-friendly goods and services liberalisation, harmonise and strengthen environmental standards, incentivise and facilitate the diffusion of green technologies as well as promote and facilitate green investment.
Mendez-Parra identified what he called “significant roadblocks”, such as limited understanding of climate risks, lack of supportive policies, and finance.
While it contributes the least amount to the global greenhouse gas emissions, Africa bears the largest impact.
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 Organisation (WTO).
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 combined GDP of over US$2.5 trillion which is expected to usher in a new era of development.