African Economies: African Regional Trade needs to be strengthened to enhance the recovery agenda from multiple shocks
May 23, 2023PRESS RELEASE
Nairobi 23rd May 2023… The African Economic Research Consortium’s (AERC) 58th Biannual plenary session of the Biannual Research Workshop was held yesterday on a virtual platform, with calls to facilitate continent-wide unity on trade to accelerate the recovery agenda.
Speaking during the conference, Prof. Benedict Okey Oramah, President and Chairman of the Board of Directors, The African Export-Import Bank, noted that even after regional integration agreements and treaties, the African regional trade has not grown substantially as had been expected. Currently intra-Africa trade stands at 15.4%, and Africa’s share of global Gross Domestic Product (GDP) trade estimated at 2.6%, despite accounting for 16.3% of the world’s population.
“It is essential for countries to reduce today’s debt burden promptly through economic reform, lowering the cost of financing, and debt restructuring on a case-by-case basis. The international community should also step-up efforts to improve debt restructuring processes, including the G20 Common Framework, to ensure that debt relief is delivered in a timely and efficient manner where it is needed”, he said.
The plenary session also noted some notable progresses in some sub-regions where integration in trade, finance and labor mobility is improving fast and acknowledged that harnessing the full benefits of Africa Continental Free Trade Area (AfCFTA) agreements and strengthening the regional integration and regional trade prospects are new avenues for exploiting the limitless opportunities.
Referencing the need to leverage on education to produce excellent research as a future goal for more focused impact, the AERC Executive Director Prof. Théophile Azomahou, encouraged the need to ensure that research is selective and conducted within respective thematic areas.
“Whilst education is inclusive, research should be trained and taught in a manner that encourages our young and upcoming researchers to be more deliberate in their methods by narrowing down topics to be as thematic as possible. This will help build knowledge in different areas of focus for policy makers and help shape solutions to our everyday problems,” he said.
Some of the notable steps that were discussed as possible solutions for mitigating these multiple shocks were investing in the transformation of African economies to reduce the unhealthy and credit-rating negative correlation between price and commodity price cycles, investing in the development of capital markets , closing infrastructure deficit especially in the power sector to close the chronic electricity deficit which has been one of the greatest constraints to productivity growth and industrial output as well as increasing relevance and impact of AERC networks in the policy and development arenas, among others.
Other discussions touched on the fact that close to 60% of Africa’s GDP growth is explained by temporal, cyclical factors, but with large variance across countries. The recovery from the shock that is taking shape now runs the risk of being uneven, widening the differences within Africa itself and between Africa, and the rest of the world.
Additionally, in economic sense the productivity shocks on agriculture, food security and land productivity due to the climate change cannot be taken lightly. There is evidence that points to increasing poverty and inequality induced by climate change and this is beyond the argument of marginal areas. The commitments by international development partners to finance the climate change initiatives are not coming forth as fast as expected to provide a stopgap to resource challenges in Africa. There are areas that can be harnessed with domestic resources, like creating shallow water wells for pastoralist that would minimize conflicts in those marginal areas.
The plenary session featured four presentations by eminent economists including: Are We Heading for Another Debt Crisis in Low-Income Countries? Debt Vulnerabilities: Today vs the pre-HIPC Era by Dr. Chuku Chuku, Economist, International Monetary Fund, Washington D.C; The Political Economy of Economic Policy Advice by Prof. Stefan Dercon, Director, Center for the Study of African Economies and Blavatnik School of Government, University of Oxford; Debt Distress and Fiscal Space for Climate-Resilient Development in Sub-Saharan Africa by Prof. Kevin Gallagher, Director, Global Policy Center, Boston University; African Sovereign Debt: An Overview of the Challenges and Opportunities by Prof. Daniel Bradlow, Senior Research Fellow, Centre for Advancement of Scholarship (CAS), University of Pretoria.
Other distinguished panelist on the policy roundtable included: Dr. Hippolyte Fofack, Chief Economist and Director of Research, The Africa Export-Import Bank (Afrexim Bank); Prof. Pramila Krishnan, University of Oxford and Fellow, Pembroke College, United Kingdom; Dr. Selma Karuaihe, Head and Senior Lecturer, Department of Agricultural Economics, Extension and Rural Development, University of Pretoria, South Africa; Dr. Paul Mpuga, Country Chief Economist, African Development Bank Group; Prof. Amanda Guimbeau, Département d’économique, Université de Sherbrooke, Canada; and Dr. Hany Abdel-Latif, Economist, International Monetary Fund, Washington D.C.
The concurrent sessions and technical sessions of the workshop will start on Tuesday, 23 May 2023 to Monday, 29 May 2023. They will feature 80 presentations of research proposals, work in progress, final reports, and interim PhD thesis reports.
