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Intra-regional trade that is more diversified and industrial in nature creates opportunities for value addition and the development of regional value chains, according to a report jointly launched by the UN Economic Commission for Africa and the World Trade Organization (WTO). It emphasizes the importance of developing regional value chains, decent jobs and improving livelihoods. Aid for Trade is an initiative launched by the WTO in 2005 to help the least developed countries build the trade capacity and infrastructure they need to benefit from trade.
The initiative also encourages developing country governments and donors to recognize the role trade can play in development. In particular, the initiative seeks to mobilize resources to address the trade-related constraints identified by developing and least-developed countries.
The report titled “Promoting connectivity in Africa: The role of Aid for Trade for boosting intra-Africa trade” looks at the Continental Free Trade Area (CFTA), which is currently under negotiation, and that is expected to be an important milestone in enhancing trade on the continent.
For the agreement to deliver on its developmental potential, it will need to address connectivity challenges on the continent in a comprehensive way, it underlines. Furthermore, it states that Aid for Trade can act as a powerful tool to boost intra-African trade and subsequently, meet the CFTA objectives.
According to Capacity Development Division (CDD) Director, Stephen Karingi, intra-African trade is a key instrument for achieving the much-needed structural transformation of the continent. He stated during the report launching that the current flows of Aid for Trade and priorities indicated in the responses from Africa suggest that there is good alignment of Aid for Trade to Africa’s trade agenda as presented in the Action Plan for Boosting Intra-African Trade (BIAT), a program run by the African Union.
“To ensure that this alignment is maintained and improved upon by increasing focus on intra-African trade, the various continental program and frameworks, such as the Program for Infrastructure Development in Africa (PIDA) should be used,” said Karingi, adding more needs to be done to support the development of productive capacity in industry in Africa.
In 2015, Aid for Trade disbursements to African countries reached a record high USD 14.1 billion, representing some 34 per cent of global disbursements. Within Africa, the largest share of Aid for Trade goes to the east African countries of Kenya and Tanzania.