Rabat, 13 October, 2019 (ECA) – Representatives of Algeria, Libya, Morocco, Mauritania and Tunisia took part this week in the joint ECA (Office for North Africa) – Arab Maghreb Union Seminar on the Potential Impact of the African Continental Free Trade Area on Maghreb Economies, stressing the urgent need to coordinate their countries’ AfCFTA implementation strategies to ensure national and regional interests and priorities are taken into account.
The representatives of the five countries also called on the Arab Maghreb Union (UMA) General Secretariat to provide them with enhanced support by facilitating joint discussions in preparation for the realization of the African single market.
The seminar on the Potential Impact of the AFCFTA on Maghreb Economies was held on 11-12 November in Rabat (Morocco) with the participation of UMA Secretary General Taïeb Baccouche, Mauritanian Minister of Commerce and Tourism Sid'Ahmed Ould Mohamed, AU Commissioner for Trade and Industry Albert Muchanga as well as the chief AfCFTA negotiators of the five Maghreb countries.
"Maghreb integration is a milestone in the regional integration process, and is now more relevant than ever in view of the similarity of development challenges, and the opportunities it represents in terms of growth and employment, given the subregion’s strategic position," said Lilia Hachem Naas, Director of the ECA Office for North Africa. According to Hachem Naas, real Maghreb integration would strengthen member State negotiating powers, encourage trade and investment, facilitate economies of scale by increasing the size of markets and making public policies more predictable by anchoring them in a regional perspective.
Recent ECA studies have revealed that Maghreb integration, one of the eight pillars of AfCFTA implementation and African integration, can enable Maghreb countries to diversify their economies, accelerate their structural transformation and generate employment.
North Africa enjoys an incredible geostrategic position: Given its position between two very different economic worlds; it has to play the role of a bridge within global industrial value chains, said Minister Sid'Ahmed Ould Mohamed of Mauritania. Ould Mohamed called upon UMA to facilitate intra-Maghreb consultations around the negotiations needed to enhance and catalyze the opportunities presently available to North Africa and asked that UMA organize a meeting of Maghreb trade ministers and an extraordinary summit on the theme of economic integration within the AfCFTA. The Mauritanian Minister of Trade and Tourism encouraged Maghreb countries to finalize their tariff concessions, trade in services offers and to complete the first implementation milestones.
"We do not have a Maghreb strategy at the moment but we are determined to move forward to build one. This must happen before the next African Union Summit scheduled to take place in Addis Ababa next February," insisted UMA Secretary General Taïeb Baccouche at the end of the meeting. Baccouche added that discussions are currently under way between UMA and Mauritania in preparation for the organization of a meeting of trade ministers and a high-level summit on the sidelines of the upcoming African Union Summit in February 2020, in accordance with recommendations emitted by the seminar.
The Seminar on the Potential Impact of the AfCFTA on Maghreb Economies was organized with the aim of encouraging a better positioning of Maghreb economies in the building of the African single market. Participants agreed on 1) the crucial role of the private sector in the regional integration process and the need for mechanisms enabling it to contribute to the AfCFTA’s success in the sub-region; 2) the need to strengthen financial systems’ support to import & export activities, and 3) the need pay greater attention to non-tariff barriers, which are the main obstacles to trade across the sub-region.
The AfCFTA came into force on 30 May 2019 with the aim of reducing tariff barriers and harmonizing trade rules between member countries with a view to reducing transaction costs and promoting intra-regional trade in goods and services. According to ECA estimates, AfCFTA implementation is expected to lead to an increase of more than 60% in intra-continental trade, particularly in manufactured industrial products.
Thanks to its numerous strategic advantages (economic complementarity, opportunities for the creation of sub regional value chains, quality of transport infrastructure, an educated and well-trained workforce, a common language, proximity to the Euro-Mediterranean area, etc.), North Africa could benefit even more from the AfCFTA if it implements it along with trade facilitation measures, as projections show that North African industrial trade could grow by up to 70% (about $ 7.1 billion worth of trade within North Africa, and about $ 6.5 billion worth of trade between North Africa and the rest of Africa).
Currently, however, the Maghreb is the least integrated sub-region of Africa. In 2018, for example, only 3.34% of UMA countries' exports were aimed at the Maghreb market.
The AfCFTA is a new lever which can enable us to make this long-awaited Maghreb integration a reality for our economic operators, said Moulay Hafid Elalamy, Minister of Industry, Trade and the Green and Digital Economy of Morocco in a speech delivered on his behalf. "Integrating our five Maghreb countries is the best choice to ensure socio-economic development and to preserve peace and stability within the region," he added.
Maghreb countries will however have to face many challenges as they do so. "The AfCFTA is a huge undertaking that has raised expectations across Africa. With this huge responsibility of not creating a crisis of expectations, Africa’s only choice is to succeed in implementing the AfCFTA Agreement", said the African Union Commissioner for Trade and Industry Albert Muchanga.
The AfCFTA project is also raising expectations beyond the African continent. Michaela Dodini from the EU Delegation in Rabat stressed that the EU and the AU both share the goal of promoting the well-being of their people and growth through trade and investment in Africa, as vectors of inclusive development and job creation. "Our vision is that once implemented, the AfCFTA could become the anchor for a region-to-region free trade area, which would create a vast area of integration and prosperity between Europe and Africa".