Page 25 - Nile Explorer Issue 12

Around Africa

AfCFTA, a

long way

to a single

market A woman outside the Secretariat of the African Continental Free Trade Area
(AfCFTA), in Accra, Ghana

outed as the world’s largest single lift 30 million Africans out of extreme development through diversification
Tmarket in terms of the number of poverty and 70 million from moderate and regional value chain development,
member nations, Africa’s ambitious poverty, according to World Bank and foster sustainable socio-
blueprint for free trade kicks into gear estimates. economic development and structural
on January 1, bringing together more Integrating over 50 markets that are at transformation.
than 50 economies from Algeria to very different levels of development will At the 13 Extra-Ordinary Session of
th
South Africa. be daunting task, particularly with mny the Assembly of the Union (AU) held
The African Continental Free Trade countries still favouring protectionism. on December 5, under the chairmanship
Area (AfCFTA) was supposed to become There is still a significant amount of of President Cyril Ramaphosa of South
technically operational in July, 2020, but negotiations that have to occur, as trade Africa, stressed the need to quickly
the launch was delayed by complications negotiations are incredibly complex operationalize trading under AfCFTA
blamed on the coronavirus pandemic because every individual tariff line needs to break the dominance of South Africa,
and the slow pace of negotiations. to be negotiated and agreed upon. Egypt and Nigeria that control 50 per
A brainchild of the African Union, Another problem is that the relationship cent of the African market.
as of 1 December 2020, 54 of the 55 between the AfCFTA and many of the African countries could rake in $20
AU Member States had signed the existing eight regional blocs, which exist, billion yearly by simply tackling non-
Agreement, and 33 had deposited some complete with a customs union. tariff barriers that slow the movement of
instruments of ratification. Other issues to be thrashed out are goods, according to the UN Conference
Africa’s 1.2 billion people and combined how to dovetail existing or future trade on Trade and Development, the UN
market worth of $2.5 trillion represents agreements between Africa or individual entity that deals with trade investment
enormous potential for traders, African countries with Europe, China and development issues.
exporters and businesses involved or and the United States.
interested in cross-border trade. Non-tariff and political barriers could The World Economic Forum signals
The AfCFTA is an AU Agenda 2063 prove tricky. Kenya for instance has that AfCFTA’s full and effective
flagship initiative established to create already entered into a post BREXIT implementation is what will lead to its
an integrated continental market for trade deal with UK, and other EAC transformative impacts, meaning that
goods and services and to support countries are expected to follow. its touted benefits are by no means
the movement of capital and natural Wamkele Mene, AfCFTA’s secretary guaranteed.
persons. This market will be actualized general, has said Africa “continues to be Experts observe that AfCFTA could
through the progressive elimination of trapped in a colonial economic model” for part of the solution to Africa’s
tariffs and removal of non-tariff barriers. and has to “aggressively” implement the post COVID-19 pandemic economic
Internal trade within the continent of new deal. recovery, with hope that the teething
1.2 billion people currently stands at Africa accounts for only three percent problems that arise will be tackled and
a meagre 16 percent, while 65 percent of the global economy, parceled into that AfCFTA will be a shot in the arm for
of their commerce is with European 55 different economies, which a huge Africa’s development.
countries. inhibitor to rapid continental economic Speaking from the headquarters of the
AfCFTA’s plan is to boost intra- growth. AfCFTA Secretariat in Accra, Ghana,
African trade by 60 percent by 2034 by With commencement having taken the Secretary General of AfCFTA,
eliminating almost all tariffs, creating an effect on January 2021, the AfCFTA is Wamkele Mene stressed that integrating
economic bloc of $3.4 trillion. expected that AfCFTA will enhance 55 markets will not be easy but giving up
If fully implemented, the AfCFTA will competitiveness, promote industrial is not an option.

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