The United Nations Economic Commission for Africa (UNECA) has argued, in its report, that the envisioned AfCFTA Investment Protocol be simplified to attract needed foreign direct investments.
To attract new FDI during the post-pandemic recovery and rebuilding stage, he said upcoming AfCFTA negotiations should serve as a platform to harmonize investment rules and create a level playing field for investors.
While presenting the report titled “Towards a Common Investment Area in the African Continental Free Trade Area: Levelling the Playing Field for Intra-African Investment,” Stephen Karingi, Director, Regional Integration and Trade Division of UNECA stated that “as Africa faces a steep decline in foreign direct investment (FDI) during and in the aftermath of the COVID-19 pandemic, the opportunities presented by a continental common investment area could hardly have arrived at a better time.”
Achieving the gains from AfCFTA is especially important due to the COVID-19 pandemic, which is expected to cause up to $79 billion in output losses in Africa in 2020 alone
Amidst a sharp drop in global FDI due to COVID-19, Karingi stated that Africa’s FDI inflows fell 18 percent from $46 billion in 2019 to $38 billion in 2020, a level not seen for at least a decade, and deeper than that in developing economies where they declined 12 percent.
Mr. Karingi appealed to policymakers to “use the Investment Protocol to simplify current entanglement of investment rules and clarify linkages with other AfCFTA protocols, international law, and domestic legislations.’’
The AfCFTA, the world’s largest free trade area, aims to form a single continent-wide market for goods and services, stimulating more trade and investment.
We were exhausted after a long day of travel, so we headed back to the hotel and crashed.
The agreement is expected to expand intra-African trade, boost industrialization, increase job opportunities, and enhance the global competitiveness of African industries.
COVID-19 has caused major disruptions to trade across the continent, including in critical goods such as medical supplies and food.