When outgoing AU Chair Paul Kagame assumed the leadership of the African Union, one of his objectives was to make the entire continent a trade free area among African nations. According to Kagame, this was very imperative and presented as a catalyst to boost Africa’s economic growth and development (Africa’s agenda 2030 and 2063).
African Continental Free Trade Area (AfCFTA)
From its name, the African Continental Free Trade Area is an economic initiative of African leaders (African Union) to establish a free trade zone among Africa’s 55 nations. This project came to light in 2018, when Presidents and heads of governments assembled in Kigali Rwanda. Lamenting on the fact that less than 20% of Africa’s trade is within, Kagame underlined that if leaders can prioritise and sign the free trade area agreement, making a tariff-free zone between nations, then doing business won’t be an issue of contention in Africa. As anticipated by the AU stakeholders, member states are obliged to remove tariffs from 90% goods. This new dispensation seeks to ensure easy circulation of goods and services across African territories. The AU believes that the AfCFTA if materialized, will present a leading free trade area since the realization of the World Trade Organisation, citing membership. AU leaders forecast an African commercial platform of over 1.2 billion people with a GDP of 2.5 trillion U.S. dollars. As per the UN Economic Commission for Africa, the AFCFTA will enhance intra-African trade by 52% by 2022
Signatories of the African Continental Free Trade Area
After series of deliberations which begun in 2013, the year 2018 was remarkable as 49 out of the 55 countries have signed the African Continental Free trade area agreement. However, countries like Nigeria, Zambia, Benin, Guinea-Bissau, Botswana and Eritrea are yet to sign the accord. For Nigeria, a strong economic giant to sign the deal, its business class needs to be fully concerned.
Before the AU can boast of a milestone concerning Afcfta, a total of at least 22 member states need to ratify the agreement for it to go operational or materialized. As of January 2019, about 18 out of the 49 signatories had ratified the deal including, Rwanda, Guinea, eSwatini (Swaziland), Kenya, Niger, Ghana, Chad, Ivory Coast, South Africa, Sierra Leone among others.
In one of his speeches, President Kagame said the African Continental Free Trade Area won’t deprive member states of commercialising with international business partners, but a boost to continental trade. Lately, one of Africa’s renowned C.E.O and business magnate Tony Elumelu reiterated the need for Africa to emulate the ‘’other world’’ and enhance trade deals among member states to promote real economic development. Even though the leaders have not undermined the challenges that come with free trade or trade liberalisation, where already made nations benefit more at the expense of emerging states, a more concerted and well-managed trade among African states is a great milestone towards achieving its development agendas and giving the continent a good economic position in the world.
Article from AFRIC Editorial