THE African Continental Free Trade Area (AfCFTA) Agreement will boost intra-African trade by around 40 percent with substantial benefits to the transport sectors, according to a latest estimate by the United Nations Economic Commission for Africa (UNECA).
‘If fully implemented, the AfCFTA is expected to significantly increase traffic flows on all transport modes: road, rail, maritime and air,’ the UNECA said in its newly published report that assessed the nexus between the AfCFTA and Africa’s transport sector on Friday.
The report was officially released by the UNECA’s African Centre for Statistics and Private Sector Development and Finance Division at a webinar that brought together African finance ministers.
Presenting the report findings, Robert Lisinge, Chief of UNECA’s Energy Infrastructure and Services Section in the Private Sector Development and Finance Division, emphasised the crucial importance of fully implementing the AfCFTA so as to significantly boost intra-African trade, in which the transport sector would play a critical role.
According to the UNECA’s projection, the historic continental free trade pact will increase the continent’s transport equipment needs significantly for all modes of transport.
The cost of equipment required by different transport modes to cope with AfCFTA is estimated at $411bn. However, fluctuations in transportation and construction prices may hamper renewal of Africa’s transport fleet and upgrading of critical infrastructure links.
The report indicated that Africa’s aviation industry, which recorded revenue loss of $8.2bn in 2021, requires financial support.
The report underscored that the current perception of the transportation sector as a major constraint may repel investors from African countries, while fluctuation in transport prices across the continent may also affect demand for vehicles and increase trade costs.
Oliver Chinganya, Director of Africa Centre for Statistics at the UNECA, said the ongoing Ukraine crisis is likely to have an adverse effect on fuel prices across Africa, which will in turn increase the cost of transport on the continent for both people and commodities.
Based on the findings, the UNECA called on African countries to mobilise resources for the transport sector; stabilise transport services and construction prices; implement priority infrastructure projects; implement the Inter-Governmental Agreement on the Trans-African Highways; and finance road safety.