On several occasions, former AU chairperson and Rwandan President Paul Kagame have reiterated how important this free trade area is for African countries. Imagine, a commercial area without trade tariffs, no closed borders, where there is free circulation of goods, services and people. That is the awesome vision leaders of the African Union strive to materialize in the pending months. Now the big question is how soon the African Continental Free Trade Agreement AfCFTA can exist more in practice than in theory.
The African Continent has embraced change and its leaders are en route to implementing reforms that will help them attain major objectives. Driving economic transformation is the major plight of these leaders. It is in this light that AU leaders brought to the limelight the continental free trade area. It has been the dream of the African Union leaders to have a unique African Market or a single trade zone. Thus materializing the African continental free trade area agreement would mean a great milestone for the leaders.
MINIMUM THRESHOLD ATTAINED
The recent ratification of the African Continental Free Trade area Agreement by The Gambia, consequentially fulfilled the required twenty-two (22) signatories for the giant project to go functional. The African Union Commissioner for Trade and Industry Albert Muchanga broke the news of the latest development after the Gambia’s parliament unanimously ratified the trade deal in April 2nd, 2019, is the 22nd member to succumb after Ethiopia endorsed in March. Thus, the desired threshold has been reached. As asserted by Albert Muchanga, the ‘’operational phase’’ of the project is projected to commence by July this year at the AU Summit. Out of the 49 AU member countries that inked the agreement, only 22 of these nations have ratified in their respective parliaments, giving light to the much talked African market. However, does this latest ratification mean an immediate commencement of the project?
Some analysts have in the meantime, highlighted very important points that need to be considered to perfectly deliver the continental free trade zone.
Concerned countries are yet to conclude on the matter of trade ‘’non-tariffs barriers, means of execution, schedule of concessions and tariff books’’. A compromise on the above points would foretell the tariffs to levy on goods. Also, income differences present another setback to the free trade area, its feasibility under the canopy of a single market. Political lines, raging conflicts on the continent are, some of the points that stand as obstacles to the dream single market. However, President Paul Kagame of Rwanda, a strong advocate of the free trade zone, has challenged African states to overlook every factor that presents as a setback to the African Continental Free trade area.
According to economist and stakeholders, the free trade area is expected to boost small and medium-sized enterprises SMEs. As per World Bank statistics, SMEs constitute 80% of Africa’s employment and contributes 50% of its Gross Domestic Product GDP.
If it comes into force, the CFTA would facilitate Intra-African trade, thus economic unity among AU member states. and will promote positive competition among growing industries on the continent.
IMPORTANT POINTS TO NOTE
- 52 out of 55 AU member states have signed Africa’s continental free trade area
- 22 nations have endorsed the agreement, the latest being the Gambia on April 2nd 2019.
- A total of 15 countries have already deposited their AfCFTA ratification instruments at the AU
- 7 states have received parliamentary approvals
- 3 countries including Nigeria, Eritrea and Benin are yet to sign the AfCFTA agreement.
It is worthy of note that the African free trade area would be the largest in the world. Talking about the AfCFTA is to talk about three trillion dollars of combined Gross Domestic Products, easy circulation of about 1.2 billion people, poverty reductive, and most importantly economic amalgamation. The African Continental Free Trade Area agreement was enacted in 2018. Hope remains high for the total practicality of the African trade zone that fits into the continent’s development agenda 2063.
Article from AFRIC Editorial
Credit image : google image/AfCFTA