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Thursday, 13 July 2017

Aid for Trade in Africa: What Are the Strategic Priorities?

Aid for trade (AfT) is explicitly addressed in the Sustainable Development Goals (SDGs) under Goal 8: “Promotesustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.” For AfT to deliver on the ambitions of this goal in Africa, along with the objectives contained in the African Union’s (AU) long-term development vision and action plan, Agenda 2063, it is important to ensure that it is well-targeted and aligned with the continent’s strategic priority of structural transformation. This article provides some suggestions on how to achieve this. Many characteristics of AfT flows to Africa have remained relatively unchanged over the last decade. The current picture of AfT in Africa is presented, before recommending three key strategic priorities: (1) refocusing AfT for enhanced intra-African trade, (2) making AfT work for all, and (3) strengthening human and institutional capacities for effective AfT.These proposals are not exhaustive, but they can go a long way towards ensuring that, through AfT, trade is more effectively used as a tool to transform African economies and achieve the 2030 Agenda in Africa. Aid for trade in Africa: A state of play In 2015, AfT disbursements to African countries reached a record high of US$14.1 billion, representing an increase of over 150 percent from 2006.[1] From the beginning of the Aid for Trade Initiative, Africa – together with Asia – has been one of the key destinations for AfT, with its share of global disbursements fluctuating between 30 and 40 percent. AfT therefore represents a significant and growing channel of aid for African countriesAfT flows to the continent are not evenly distributed, with a number of large economies dominating AfT funding. Since 2010, Egypt, Ethiopia, Kenya, Morocco, and Tanzania have attracted the largest disbursement flows. Together, these five countries have on average accounted for over 35 percent of the annual AfT disbursements to Africa. Both Morocco and Egypt alone have accounted for over 8 percent annually.

Source: ICTSD