Africa’s ambitious trade agreement kicks off
Finally, the African Continental Free Trade Agreement (AfCFTA) came into effect on January 1, 2021, reflecting African leaders’ determination to change the status quo as far as intra-trade relations are concerned. The agreement realizes the dreams and aspirations harboured by the continental body’s founding fathers to achieve greater unity, integrity, and solidarity.
Merits of the agreement
According to Brookings, AfCFTA commits member countries to remove tariffs on 90 percent of goods, liberalize trade in services, and address a host of other non-tariff barriers. If successfully implemented, the agreement will create a single African market of 1.2 billion consumers, with a total GDP of over $3 trillion. This agreement will make Africa the largest free trade area globally since the establishment of the World Trade Organization.
The agreement adopted in December
The decision to kickstart the trade agreement was adopted during a virtual meeting of the 13th Extra-Ordinary Session of the Assembly of the Union on the AfCFTA, held on Saturday 5 December 2020, under the Chairmanship of Cyril Ramaphosa, President of the Republic of South Africa and Chairperson of the African Union (AU). With this, African countries will remove all barriers and trade among themselves, build a strong bargaining power to negotiate better deals in the global market with a united front. According to President Cyril Ramaphosa, the AfCFTA will boost intra-African trade, promote industrialization and competitiveness and contribute to job creation. It will unleash regional value chains that will facilitate Africa’s meaningful integration into the global economy.
The AfCFTA will also improve the prospects of Africa as an attractive investment destination. It will help advance Africa’s women’s empowerment by enhancing women’s access to trade opportunities, facilitating economic freedom for women, and expanding countries’ productive capacity.
A great milestone
For his part, Mr. Moussa Faki Mahamat, Chairperson of the African Union Commission, expressed satisfaction with the milestone achieved in implementing the AfCFTA. He said it is the fulfilment of the dream long aspired by the founding fathers of the Organisation of African Unity (OAU), who have always wanted to create an African common market.
Determination to achieve economic integration
Moussa Faki noted that, for this dream to become a reality finally, this continental project had to go through several stages. It all started with the signing in 1991 of the Treaty establishing the African Economic Community, followed by the signing in March 2018 in Kigali, Rwanda, of the Agreement establishing the AfCFTA, during which 44 countries signed the Agreement. It is with great satisfaction that in record time, 34 countries have ratified the legal instrument on the AfCFTA. This, the AUC Chairperson said, shows the determination by a member state to quickly achieve the continent’s economic integration.
Speaking from the AfCFTA Secretariat headquarters in Accra, Ghana, the Secretary-General of AfCFTA, Wamkele Mene, stressed that integrating 55 markets will not be easy but giving up is not an option.
With the agreement coming into effect, hopes are high that Africa is destined for unprecedented transformation that will change the lives of millions of its citizens for generations to come.
The competitive advantage that Africa enjoys is being closely watched by other nations, including the developed world.