Nigeria, the largest economy in Africa, has finally agreed to sign the African Continental Free Trade Area (AfCFTA) agreement that will allow freer movement of goods, services and people within the continent.
Nigeria, which had chosen not to join the zone due to concerns raised by local businesses, will now sign the agreement at an AU summit in Niger this week, according to the presidency.
The African Continental Free Trade Area (AfCFTA) agreement became a binding international legal instrument on May 30, 2019, and the market would be launched on July 7, 2019, the African Union said in a statement recently.
The AfCFTA is the single largest free trade market agreement in the world since the formation of the World Trade Organization. 52 out of the continent’s 55 countries have signed the free trade agreement with the exception of Benin, Eritrea, and Nigeria.
In March 2018, Nigeria’s Federal Executive Council headed by the Vice President approved that the country signs the agreement with fellow African countries. But few days into the major move, Nigeria’s organized labour union, the Nigeria Labour Congress (NLC), urged Buhari not to sign the deal.
“We at the Nigeria Labour Congress are shocked by the sheer impunity or blatant lack of consultation in the process that has led to this,” NLC President Ayuba Wabba said at the time.
“We have no doubt this policy initiative will spell the death knell of the Nigerian economy.”
Nigeria’s latest decision to join the bloc could make it one the biggest beneficiary, according to analysts.
“The unique continental market access combined with the increasing focus on industrialization as a catalyst for growth and priority of the government to shift away from over-reliance on volatile primary commodity exports will contribute to boosting Nigeria’s manufacturing sector and exports,” Landry Signé, a Brookings Institution fellow, was quoted by Quartz.
The continent now awaits the decision of the relatively small economy of Benin and the closed economy of Eritrea, which are yet to join the zone.
It’s been over a year since 44 countries first signed the consolidated text of the Agreement in the Rwandan capital Kigali to enable the long-awaited economic integration and movement of goods and persons across member states.
The AfCFTA will create a single continental market for goods and services; enhance free movement of business persons and investments; enhance competitiveness at the industry and enterprise level through exploiting opportunities for full-scale production.
It will also enforce the establishment of the Continental Customs Union and the African customs union, expedite the regional and continental integration processes and exploit opportunities for scale production, continental market access and better reallocation of resources.
With the commitment of all countries, the AfCFTA could bring together the 1.2 billion African population with a combined gross domestic product (GDP) of more than $2.5 trillion to remove tariffs on 90 per cent of goods, with 10 per cent of “sensitive items” to be phased in later.
This agreement was first introduced in January 2012 during the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union, held in Addis Ababa, Ethiopia. The member states adopted the decision to establish the Continental Free Trade Area by 2017.
The African Union has failed since the formation of the Organisation of African Unity (OAU) in 1963 to implement integration mechanisms and recommendations that will unite the continent.
Several meetings have been held over a long period of time to realize that dream but to no avail. 44 years after the attempt to create a Union Government during the founding of the OAU, the opportunity came up once again at the 9th Ordinary Session of the newly formed African Union (AU) in Accra, Ghana in 2007.
The agenda was to debate the creation of the Union Government that will lead to the formation of the United States of Africa as adopted by a 2006 study. The study proposed a single African military force, a single currency and a single passport for Africans.
The heated debate in Accra failed to institute the Union Government but the heads of state agreed to accelerate political and economic integration, strengthen the organs and institutions of the AU and then set a timeframe to establish a Union Government with the involvement of Africans and the diaspora.
Since then, teams have been set up in 2007, 2008 and 2009 to review the recommendations and give the green light for the transformation of the African Union Commission into the African Union Authority to pave way for the Union Government which will be led by a president, vice president and secretaries.
All the teams have since deferred their assignments and the dream of a United States of Africa still lingers. However, successful implementation of the African Continental Free Trade Area (AfCFTA) Agreement will be a step in the right direction.