The African Continental Free Trade Area (AfCFTA) Agreement is designed to drive African industrialization— defined as the shift towards greater production of high-value manufactured goods— through increased intra-African trade. This will be done through the elimination of tariff and non-tariff barriers facing trade among African countries. This is expected to stimulate higher demand for African-made goods and services, thus incentivizing investment in their increased production. However, all of this will be taking place within the context of a global economy that increasingly prioritizes sustainability. The increasing urgency is underscored in subsequent reports by the United Nations’ Intergovernmental Panel on Climate Change (IPCC). This, coupled with the reality of extreme weather events across the globe, have forced global leaders to contend with its gravity. For this reason, countries have been developing plans to reduce their emissions under the Paris Agreement implementation framework known as the Nationally Determined Contributions (NDCs).
Trade is responsible for approximately 20–30% of CO2 emissions worldwide, and industrialization is a significant contributor to carbon emissions. Africa is the least industrialized region globally and the current push for sustainability means that African nations have fewer environmental allowances towards structural transformation. Numerous African countries have already put forward ambitious plans to cut emissions, and these will inevitably influence the ways in which they develop their industries and trade their products. While the constraints may seem unjust, adopting sustainable methods in both production and trade could be pivotal for Africa’s future competitiveness. However, achieving sustainability comes with a financial burden, underlining the need for financing and investment solutions that bridge trade and climate concerns for a sustainable AfCFTA.
Read full article by Teniola Tayo published by the Africa Policy Research Institute: COP28: The Dual Imperatives of Africa’s Trade and Climate Goals
