Egypt would benefit from setting up a monitoring and evaluation system to track the progress of implementation the African Continental Free Trade Area (AfCFTA) in relation to its Vision 2030 and the National Structural Reform Programme (NSRP 2021-24), and from continued efforts to facilitate trade and improve infrastructure for continental integration, a recent report by the Organisation for Economic Cooperation and Development (OECD) said.
AfCFTA is expected to add 32 new free trade agreement (FTA) partners for Egypt, providing opportunities to add scale to its exports and to connect Egypt to traditional partners in Europe and the Middle East as well as to the overall global market.
Egypt would benefit from setting up a monitoring and evaluation system to track the progress of implementation the African Continental Free Trade Area in relation to its Vision 2030 and the National Structural Reform Programme (2021-24), and from continued efforts to facilitate trade and improve infrastructure for continental integration, according to OECD.#
AfCFTA entered into force in 2019 and, when fully implemented, will create an integrated market of 1.2 billion people.
The agreement holds the promise of unleashing the continent’s industrialisation process, if targeted national strategies are put in place to benefit from it. Africa trades little within the continent and mostly exports commodities and raw materials to the rest of the world. So does Egypt, despite being among the continent’s few industrial heavyweights.
AfCFTA has substantial potential to facilitate Egypt’s and Africa’s integration into the world economy, according to the report, titled ‘Production Transformation Policy Review of Egypt’, which noted that the country’s private sector has demonstrated a readiness to exploit new competitiveness drivers and its government is committed to implementing reforms. A vibrant start-up scene is also taking root in Egypt.
Egypt’s current economic specialisation in oil and gas and agro-foods poses challenges for enabling innovation and for environmental sustainability.
“The existing specialisation and persistent duality of the economy where a myriad of micro and subsistence firms co-exist with pockets of modernised excellence, also explain why the country invests little in innovation,” the report says. Egypt invests 0.72 per cent of gross domestic product (GDP) in research and development, a third of the OECD average (2.37 per cent).
The country could also benefit more from trade as its trade openness has remained relatively stable since the 1990s.
To continue advancing on its development path, Egypt needs global uncertainty to return to acceptable levels and needs to address key structural challenges that hamper the country’s capacities to achieve its vision of a prosperous and inclusive economy, the report observes.
Egypt has a strong leadership, a vision for the future and an established system for co-ordination among institutions at the top level. In future, the country would benefit from updating the policy-making process by increasing co-ordination capacities also beyond the higher echelons and within institutions, it noted.
Egypt would also benefit from rationalising and strengthening implementation institutions, for example by building their capacities to operate across the whole country.
Egypt needs to modernise its quality infrastructure system as well to ensure it operates well in an Industry and Agro 4.0 landscape, the OECD report added.
Fibre2Fashion News Desk (DS)